How a decentralized blockchain platform will drive liquidity for digital gaming goods
Globally, gamers spend over $100 billion each year on digital goods. However, within the industry’s existing infrastructure, gamers cannot transact these items safely, or across games. Simply put, there’s no current platform that gives gamers true ownership of these goods — and the platforms that do exist often cause gamers to be scammed when they attempt to buy, sell or trade their hard-earned digital goods.
There is a surprising lack of liquidity for in-game items. And it’s not only an issue for players, but also for the industry, which as of yet has not found a clear way to derive revenue from the tremendous amount of goods that gamers earn in-game. But thanks to blockchain technology, Gameflip is on the verge of changing that.
Gameflip has already built one of the world’s leading digital goods marketplaces, with more than 2 million gamers. Now, we’ve set our sights on the power of the blockchain with FLIP, our digital currency and blockchain ecosystem. By leveraging the Ethereum blockchain and ERC-20 Token interface, we’ve created a safe, liquid marketplace for all digital goods.
Digital goods liquidity will transform the gaming industry as we know it. Here’s how.
Current challenges (and potential) for transacting digital goods
Digital gaming is already generating $94.4 billion annually. This year, more than 2.2 billion gamers will generate $108.9 billion in game revenue — 87% of which will come from digital games. And that number is only expected to grow.
However, most digital goods are currently locked within a single game. What this means is that gamers might have spent hundreds of thousands of dollars, and untold hours of playing time, to earn digital goods, only to find that the value of their investment is zero when they stop playing the game. Gamers often turn to third-party platforms like Reddit to buy, trade or sell their digital goods, but this often leads to scams. (As a former game publisher, I can tell you that many of our best players suffered this fate, and often ended up leaving the game because of it.)
Yet even without a secure trading ecosystem, the market for gamer-earned goods has been growing. As the CEO of Gameflip, I can attest to the huge demand for selling gamer-earned digital goods. These goods are typically more valuable than ones purchased through publishers, and they tend to hold that value over time. Our 2 million gamers have shown that there’s a consistent, unmet demand for selling all their digital goods online.
Keep in mind that the annual digital gaming revenue figure I referenced earlier only includes goods purchased directly from the publisher — not items that gamers earn as they play through the game. That’s yet another reason why our team of gaming veterans sees digital good liquidity as a trillion-dollar opportunity. Through blockchain technology and cryptocurrency, we’re driving liquidity, and benefitting both gamers and publishers.
The case for FLIP and blockchain technology
Several platforms have already tried to enable the sale of gamer-earned goods. However, most of these marketplaces are short on transparency and fraught with fraud. Forums, for instance, do not offer buyers and sellers any protection, which often leads to scams. The Steam Community Market is an existing option for trading digital goods in the game space. But it is useful only if you want to trade for other purchases within the Steam platform, as it doesn’t allow you to convert anything to real cash. One of the key reasons for their failure? They left publishers out of the equation.
Enter FLIP. Through FLIP, gamers will finally have a safe, transparent marketplace for buying, selling and trading all their digital goods (both publisher-purchased and gamer-earned). Our smart contracts will protect gamers from fraud, and blockchain technology will empower people from all over the world to make trades, no matter their game of choice. And here’s the best part: gamers will be able to trade universally on all marketplaces, not just Gameflip.
To foster integration with FLIP, we will give game developers and publishers open-sourced plug-ins and software development kits (SDKs).
A win-win for gamers and publishers
Publishers are vital to the success of a blockchain-based digital goods marketplace — a fact that none of our competitors seem to realize. Incentivizing publishers to join our platform will place more digital goods on the blockchain, and enable the safe and secure transaction of them. With digital goods liquidity, we’re on the cusp of a huge opportunity for both gamers and publishers. Through FLIP, gamers will have the flexibility to buy, sell and trade their hard-earned digital goods in exchange for real value. This will encourage them to purchase more digital goods, confident that they can recoup their investments in a secure, liquid marketplace, which is great for publishers. Game publishers will also benefit by receiving a commission each time one of their game’s players makes a transaction using FLIP’s smart contract.