5 reasons why blockchain-based gaming economy is the future
5 reasons why blockchain-based gaming economy is the future. Anyone who has never lived under a rock before probably knows that the gaming industry is on the verge of absolute growth. This is one of the industries that is benefiting from the COVID-19 pandemic.
However, the following growth metrics may not be known to the average investor:
- The global gaming market is now worth $ 180 billion – the fastest growing form of entertainment in the world. By comparison, the global film industry is worth $ 100 billion, and all of the sports in North America add up to annual sales of $ 73 billion.
- Experts predict that the number of people streaming online games will grow to one billion by 2025 – one in nine today.
- Three of the four most watched U.S. sporting events in 2018 weren’t even traditional sporting events. They are eSports events. For example, the League of Legends Championship has 30 million more views than the AFC Championship and 45 million more views than the NCAA Soccer Championship.
- Travis Scott performed live on the popular Fortnite gaming platform last April. It has received over 12.3 million views and Scott grossed over $ 20 million per TechCrunch and GamesIndustry.biz.
What is happening here and where does this growth come from?
We can for the most part simply attribute this to the advancement of technology and the exponential growth rate. Technology continues to transform the way we communicate, how we collect and use information, how we deliver value, and how we form online communities.
Howard Shultz, the former CEO of Starbucks, popularized the idea of a “third physical room” with his coffee shop concept. He believes that people need a “third room” to meet outside of the office and at home. Starbucks is the answer.
Today we see that this concept is coming to fruition with younger generations. Except that the new shared space is digital and called a metaverse. More and more children go out here these days. They go there to meet with their friends. Listen to music or play video games. We can think of this as the next iteration of digital communities: AOL chat rooms, then Myspace. Facebook and finally the Metaverse.
We now have concerts in the Metaverse. Burning Man has been digitized. And we’re just getting started.
The first video games came out in the late 1950s – a simple tennis game similar to pong. Then Atari was invented in 1977. Nintendo started releasing popular games with Mario Bros, The Legend of Zelda, Donkey Kong, etc. in the early 80’s.
It’s important to note that the business model has changed dramatically over the years. We used to pay $ 60 for a game like GameStop, and there we were. It’s a one-time fee with unlimited games. The game was released in much the same way that Hollywood movies were advertised and released. 90% of sales will be in the first two weeks.
This model is out now. There is a freemium model. Users can play for free and are encouraged to make in-game purchases to upgrade skills, buy avatar skins, buy weapons, upgrade animations, etc. We are seeing this today on Roblox, Fortnite, and other popular games.
This is a more profitable model for game makers as it keeps their users busy and constantly updated to compete with their friends. We’re moving into a world where social cues occurs among the younger generations in the metaverse through the avatars in the game, the weapons they use, and the skins they own. Welcome in the future.
Why gaming will move to blockchain
- Today’s game takes place in wallless data networks. This means that users cannot own their in-game content (skins, avatars, skills, etc.). The platform owns them. Axie Infinity disrupts this model as users own their assets like unusable tokens (NFTs) on Axie and can sell them in the free market / gaming economy for profit. Here’s a look at the revenue Axie Infinity users have made since May of this year:
Annual turnover per token terminal transferred $ 2.7 billion for this permissionless and open pay-to-play blockchain game. Important note: Blockchain technology is the medium through which users can own their in-game assets. This is not possible with the technology used today.
- Blockchains enable the gaming economy to take shape naturally. Users can be paid to play. Again, Axie Infinity leads the attack. Axie users invest to get Axie NFT and AXS native tokens to start playing. From there, they can earn SLP tokens through gaming / competition as the tokens earned can then be exchanged for other crypto assets or fiat etc. economic hard times that COVID-19 brought with it which is pretty cool. Let me ask you this, if you could get paid to play a blockchain game as opposed to a non-blockchain game, which one would you choose? As Charlie Munger said, “Show me the deals and I’ll show you the results.”
- Public blockchains are open to everyone and do not require permission. Do you have a cell phone and internet connection? Great, you are welcome to participate. This really doesn’t work in today’s closed data architecture, especially if you live outside of the United States. Not only can you participate in blockchain, but you can also generate income. As smartphone usage continues to grow with the advent of 4G and 5G technologies in emerging markets, we should expect more and more users to access crypto-based games and blockchain in the near future.
- Open protocols reduce and compress the costs of existing technologies. Public blockchains are open protocols. Ethereum is an open protocol. Anyone can build games on Ethereum. This way, you’re essentially outsourcing most of your operating and capital costs to the basic Ethereum blockchain, which means it’s much easier for entrepreneurs to start a game. Low entry barriers increase competition. Ultimately, the end consumer benefits from this. We have seen this over and over again in history. Blockchains are simply the next iteration of open source technology.
- decentralization. Since blockchains are open and without permission, anyone can build on them. This means that we should expect a future in which blockchain games are built on the basis of many different Layer-One blockchains such as Ethereum, Solana, Cosmos etc. in the form of skins, avatars or weapons. This is something that is not available today. Additionally, will users be able to trade their NFT assets for profit, or might they want to build NFTs? Go ahead – you don’t need to own a gaming platform to do this.
Game economies are the future and they will take place on blockchains.