Blockchain Blog 17: Roots of Metaverse —Gaming Industry

Aakash S
Coinmonks

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The history of video games began in the 1950s and 1960s as computer scientists began designing simple games and simulations on mainframe computers, with MIT’s Spacewar! in 1962 as one of the first such games to be played with a video display. By the mid-1970s, low-cost programmable microprocessors replaced the discrete transistor, transistor logic circuitry of the early hardware, and the first ROM cartridge-based home consoles arrived, including the Atari Video Computer System (VCS). The early 1990s saw two major shifts in technology, the introduction of optical media via CD-ROMs, and the ability to perform real-time polygonal 3D graphic rendering from further advancements in computer microprocessors. Both aspects were readily incorporated into personal computers and created a market for graphics cards. Sony’s introduction of the first PlayStation in 1994 had hampered both Nintendo and Sega’s console war, as well as made it difficult for new companies to enter the market. The PlayStation brought in not only the revolution in CD-ROM media but built-in support for polygonal 3D graphics rendering.

Sony’s dominance of the console market at the start of 2000s caused a major shift in the market. The new decade saw the rising interest in the possibility of the next generation of consoles being developed in keeping with the traditional industry model of a five-year console life cycle. However, in the industry, there was believed to be a lack of desire for another race to produce such a console. Microsoft and Sony both released their next console generations, the Xbox One and PlayStation 4, in 2013. Both expanded on features from their previous consoles with the added support for high-resolution graphics, and more support for digital distribution of content with additional storage space.

In personal computers, the graphics card market centered on the progress made by industry leaders NVidia and AMD, who also supplied GPUs for the new consoles. Starting in the late 2010s, the power of these GPU cards were being used by cryptocurrency “miners”, as they were comparatively lower cost than other computing hardware for the same purposes.

AMD vs NVidia

From the 2000s and into the 2010s, the industry has seen a shift of demographics as mobile gaming on smartphones and tablets displaced handheld consoles, and casual gaming had become an increasingly larger sector of the market. Until the 2010s, online play for most platforms was limited to players on that same platform. The first cloud gaming services emerged in 2009. These services allowed players to play games where the processing power was performed on a computer system at a hosted location, while the game’s output and player’s input were sent to that system over the Internet, using the power of cloud computing. This eliminated the need for a costly console or dedicated gaming computer for players. Early services like OnLive and Gaikai showed that cloud gaming was possible but was very much tied to the player’s latency, as a slow network could easily stall the game’s performance.

New revenue models for video games

With game development budgets for triple-A games growing larger, developers and publishers looking for ways to gain additional revenue for games beyond the first sale of the game. Multiple factors from the prior decade including the growth of the mobile game market and the introduction of in-app purchases, subscription-based games such as MMOs, and the digital distribution market, led to new avenues for recurring revenue by treating games as a service (GaaS).

Mixed, virtual, and augmented reality games

Virtual reality (VR) systems for video games had long been seen as a target for VR technology and had been in development as early as the 1990s, but had been hampered by their high cost and impractical for consumer sales.

Breakthroughs in consumer-ready VR hardware came in the early 2010s with the development of the Oculus Rift. The Rift was demonstrated at trade shows in 2013, and proved popular enough to lead Facebook to purchase the company and technology for $2 billion in 2014. Shortly afterward, Valve and HTC announced the HTC Vive, first released in 2015, while Sony released its PlayStation VR in 2016.

Augmented reality (AR) games, where the game takes a real-time video game image and renders additional graphics atop it, had also existed before the 2010s. Some PlayStation console games used the EyeToy, PlayStation Eye, or PlayStation Camera as part of the gameplay, as well as Xbox 360 and Xbox One games using the Kinect. Most of the games were more experimental since cameras were fixed and limited what interactions could be made. AR-based games took off with the release of Pokémon Go in 2016, which combined AR with location-based games. Players would use their mobile device to guide them to where a virtual Pokémon may be found, which they searched for and attempted to capture using AR atop their device’s camera.

Ray-tracing and photorealistic graphics

NVidia and AMD introduced graphics cards in 2020 with hardware support for real-time ray tracing, the Xbox Series X/S and PlayStation 5, both released in November 2020.

Significant improvements in technology also furthered the ability to display highly detailed textures, allowing for photorealism in rendered video game scenes at high resolutions and high frame rates. These changes necessitated larger storage space for texture memory on the hardware and greater bandwidth between the storage memory and graphic processor. Both new consoles included specialized SSD options designed to provide high-bandwidth storage options, which had the added benefit of virtually eliminating loading times in many games particularly those featuring in-game streaming for open-world games.

Metaverse and Gameing

Moving into the 2020s, the concept of the metaverse grew in popularity. Similar in nature to the social spaces of Second Life, the concept of a metaverse is based on using more advanced technology like virtual and augmented reality to create immersive worlds that not only can be used for social and entertainment functions but as well as for personal and business purposes, giving the user the ability to earn from participation in the metaverse.

The metaverse in the early 2020s was yet well defined but those developing the nascent technologies recognized that a financial system would be tied to these systems. Avoiding the pitfalls of prior game currency systems, the development of cryptocurrency-based games and systems that used decentralized blockchain technologies started to grow in popularity. These blockchain games were frequently based on the trading of non-fungible tokens that players created and improved through the game, mimicking how metaverse content would function. Gaming has always been a prime candidate for virtual reality (VR). Even early immersive games in 2D like Minecraft and Second Life incorporated elements of the now-WIP metaverse — such as 3D avatars, world-building, and observation as gameplay.

When we talk about the Metaverse now, it’s like talking and discussing what the internet was back in the 90s. Since Facebook rebranded as Meta in late October 2021, we hear about the Metaverse everywhere. Now, as companies like Meta(Facebook) and Epic Games attempt to build a connected universe of virtual realities, gaming has a new home.

What Does Gaming in the Metaverse Look Like?

The metaverse can be defined as a unified and interoperable VR space where users can interact with each other and the digital world around them through advanced human-computer interaction (HCI) hardware and software.

This takes VR gaming to incredible new heights.

Currently, VR gameplay is available as standalone applications that you can install on your desktop, VR gear, or mobile phones to engage in an immersive rendition of traditional video games.

The main difference is that the in-game universe now appears as a three-dimensional VR world that you can view in 360-degrees and almost “touch” through a realistic sense of perception.

The metaverse (first coined in the 1992 science fiction novel, Snow Crash) expands this concept further. It posits that you could connect multiple VR games — and, indeed, any VR application or space — to create a single interoperable environment for users.

They would be able to navigate in and out of gaming applications, interact with the same players in multiple spaces, and even port their wins without having to take off the VR headset.

In this context, gaming will have the following characteristics:

  • Games-as-platforms — The gaming experience will become much more flexible. Users can add to the virtual world, create their own content, build sub-games within a game, and essentially treat the gaming environment as a platform-like space for other activities.
  • Social gaming — The metaverse is inherently social, a trait that sets it apart from the traditional solitary VR experience. Multi-player gaming will take on an additional dimension as players are able to invite friends from the real world, interact with other players, build relationships, etc.
  • Play to earn — This will be a crucial element of gaming in the metaverse. Apart from following linear storytelling and rules, players can engage in profitable activities. A simple example: they might be able to sell the assets they have won inside the game to other users for crypto.
  • The possibility of portable game assets — The interoperable architecture of the metaverse could allow for asset portability. Weapons or avatar enhancements acquired in one game could be portable to a different environment, and NFT rules would govern persistent ownership.
  • Mixed reality experience — The metaverse leverages AR and MR to provide a more organic experience. Gaming in the metaverse could incorporate mixed reality, where users move from group text in AR to an MR board game to a full-fledged VR world in a seamless workflow.

Companies Shaping the Future of Gaming in the Metaverse

Still, in its early stages, the metaverse has attracted significant investments from gaming companies, tech giants, and VCs alike. There is very little doubt that the metaverse is the future of gaming.

Companies like Decentraland, Sandbox, Epic Games, and Meta are some of the key early movers you should note:

Decentraland

Decentraland is among the first companies to explicitly try and build a metaverse. It has a 3D VR platform with measurable real estate, a cryptocurrency based on Ethereum, and discrete spaces for multiplayer gaming.

Decentraland has also invested in a company called Decentral Games to further develop its gameplay capabilities.

Sandbox

Sandbox is another metaverse-native video game that allows you to play, create, own, and govern a virtual space. Sandbox’s economy is based on user-generated crypto and NFT assets, and it partners with global brands to deliver unique and enriching experiences.

The Sandbox marketplace has 20,000+ NFTs that you can buy and incorporate in your VR world.

Epic Games

Epics Games is best known for Fortnite, a VR game and event destination bundled into one. With Fortnite’s rise in popularity, artists from around the world have delivered concerts using the game’s metaverse-like capabilities.

Recently, Epic Games announced that it would invest $1 billion to build its own metaverse centered on gaming.

Meta (formerly Facebook)

Meta is relatively new to the metaverse segment, but it has an impressive track record of VR innovation. Facebook built a robust experiential world around its Oculus family of products, and these innovations will continue to inform the company’s vision for the metaverse.

Developers can leverage Horizon Worlds by Meta to create games and publish them inside the metaverse.

Of course, VR and video games, in general, have always had to counter legal and ethical issues, and the same will apply in the metaverse.

There are three primary concerns to navigate:

  • Child-appropriate services and controls — It can be difficult to monitor children’s activity and also to tell children apart from adults if there is heavy avatar customisation. Games must come with sufficient controls to ensure age-appropriate experiences.
  • NFT ownership rights — Laws governing the right to own in-game assets are still fuzzy. NFTs won inside a game may not be universally portable. Also, the scope of ownership rights has to be defined so that users know exactly how they can interact with, trade, and profit off of NFTs.
  • Infrastructure shortcomings — The massive scale of interoperability required to build a gaming metaverse is yet to be achieved. Tech giants and patent holders will have to work together, different countries must collaborate on a singular body of metaverse laws, and our sheer technology has a long way to evolve.

Keeping these factors in mind, we can estimate that we are 5 to 10 years from gaming in the metaverse. We will further explore more about the Metaverse in upcoming blogs.

I will leave you with one of the informative videos about the gaming industry:

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