Games and Blockchain - What is about to change in the gaming industry.

It is nothing new to have a lot of items in modern games. Be it characters, weapons, modifications and skins, or loot of any kind you can get by defeating enemies or bosses and completing quests and milestones.

The most prominent ways to aquire said items in games nowadays are money and playtime. Both require the player to make an investment into the game to some extend. I will break this down further for you if you are not familiar with these concepts present in games today:

  • Money - We see this in a lot of games wether it is free to play, a medium or fully priced game: Lootboxes, Skins, Passes and Upgrades as paid items. This items are mostly in the range from 1–10 USD and often use a special ingame currency like coins or gems trying to achieve a disconnection between the item price and their real monetary value.
  • Time - These items can also be aquired by playing the game most of the time. They require you to invest a lot of time and effort into getting them though, often referred to as grinding. This has been pretty common in many games for decades, but not the extend it is today. The grind nowadays seem to be really tedious, tempting you to spend money on the “free” items.

Since you either invest a lot of time or money into getting these items it would be only fair to actually own them and have the option to do whatever you want with them. You should be able to sell or trade it with other players or just gift it to a friend or someone else if you want to.

This is impossible in many games though and if possible it can be pretty restricted. So let’s see how everything works at the moment and what could change in the near future.

Ownership

Up until now ownership of ingame items has been pretty one-sided. With any modern game you need an account on some platform. You use this account to log in to the game and save your progress, but all items you own are linked to this account too. The data for your account is stored on a server belonging to the company whose service you are using. The only thing you actually own are your login details you can use to log into their service.

Since everything is running on their servers these companies have complete control over your items and the market around them. They can decide if trading or selling is a possibilty and if it is possible they are able to restrict you in how you can sell or trade your ingame assets.

Losing your items, you hard-workingly earned or paid for with money you hard-workingly earned, could also be a possibilty. If your account would get banned or the company decides to shut down the game for whatever reason your access to the items would dissappear the moment the servers shut down. Even if these items would only be of nostalgic value at this point, it would still be great to keep them.

All this could be subject to change though as storing information on the blockchain becomes more widespread. In this particular case we store our game items on the blockchain. There are some games which utilize the blockchain for storing their ingame assets already. I will focus on some games i am playing myself in a later part and in my upcoming articles. With these games your items are not stored on the company server. Your items are stored in your wallet as NFTs which is an abbreviation for non-fungible tokens.

If you are familiar with blockchains you sure know what a wallet is. If not you can read through this Blockgeeks guide about cryptocurrency wallets to get the grasp on it and here is another article from Cointelegraph on non fungible tokens. Explaining blockchains and the underlying topics deserve their own articles, but there should be enough material around the internet explaining all these concepts already if you want to dive in further.

Due to nature of the blockchain data can not be deleted once it has been stored. It is immutable. So if all our items for a game are stored on the blockchain and the game would shut down we would still have complete access to our item stored in our wallet.

Through using the blockchain we can use this concept of true ownership to our advantage in several ways.

Open Market

If we have full control over our assets we can access open markets. But before we look at some open markets existing on Ethereum today, lets look at some data about the markets that exist in and around games and the current situation of them. There is a huge market for game items and the prices for them can get pretty crazy. Let us look at two example cases.

  1. A trading card for Magic the Gathering, the Black Lotus which is one of the rarest cards in existence, was sold for more than $87,000 on eBay. Magic the Gathering is a physical card game released in 1993.
  2. Multiple skins for Dota 2 are sold frequently on the Steam Marketplace. In the case of the article above we look at some of the more pricy items in the range of about 800–1800$. Dota 2 is a PC game released in 2013. This items are for cosmetic use only, meaning they offer no benefits ingame. You can only change your appearance with them.

Our first example represents an open market scenario pretty well. Since we are the actual owner of the asset and have access to it completely we can sell it on any market we want for real money. In this case eBay was used to sell the trading card.

In the second example we are bound to the Steam Marketplace to sell our items because we need to log into the platform our items are stored on. In this case you do not earn real money from selling your items. You get a special Steam Currency based on your countries currency which you can spend on their platform for more games or items. Henceforth the money spent is always staying in their own ecosystem.

As for selling items for real money there is the possibilty to send the item to a buyer using the steam trading system in exchange for no other items. Then the counterparty sends the money via some service like PayPal. As you can imagine this method is prone to scamming because no side can be sure to recieve either the item or the money. So the option is there but basically non-existent because it is so risky.

In the case of blockchain assets everything behaves as in our first example. We own our assets completely and can therefore use markets which are built on the underlying blockchain the assets are living on. These markets exist as applications built on the blockchain, often refered to as an dApp. dApp is an abbreviation for decentralized application. We can sell, trade and gift our items using these dApps. The highest crypto asset sold i am aware of is a CryptoKitty for 170,000$ paid in Ether which you can exchange for USD at an exchange. Ether (ETH) is the “fuel” for the Ethereum network, which was used as a currency in this specific case.

There are some market and trading dApps running on the Ethereum blockchain already. You can check out eMoon and OpenSea if you are interested in seing one of these marketplaces in person and for trading your tokens you can check out BoxSwap, which is in beta at the moment. BoxSwap and eMoon are built on the 0x Protocol, which is an open protocol built for purchasing and trading Ethereum tokens. This protocol alone helps keeping the market open because there is the possbility to create new markets which are secured by the blockchain from the get-go.

You can also transfer these tokenized items using the underlying smart contract as long as they are based on the ERC-721 standard, which all of the games i know so far use. You can check out the full standard here but here are some snippets from the webpage:

ERC-721 is a free, open standard that describes how to build non-fungible or unique tokens on the Ethereum blockchain. ERC-721 defines a minimum interface a smart contract must implement to allow unique tokens to be managed, owned, and traded.

Reusabilty

Since items are not directly bound to the games anymore there is the option to use existing blockchain items for other games.

This has been done already with KittyRace. Here you can use your CryptoKitties which are non-fungible tokens to race other cryptokitties and win some ETH. As of recently you can also use your cryptokitties in Gods Unchained to make statues from your kitties, which you will be able to use in Gods Unchained. Gods Unchained is a digital Trading Card Game where you own your cards on the blockchain. Another example that comes to mind is Axie Infinity. Axies are cute battle monsters you can collect, breed and fight with. There is the option to find three hidden Axie mascots in Decentraland. Successful players will be able to earn tokenized rewards from the Axie universe!

Another project called Enjin is building a so called Gaming Multiverse on Ethereum at the moment where you can use your items in multiple games too, if interested you can read about it here:

The data persistance offered from the blockchain also enables us to build a new game upon a game that is not being developed anymore or has shut down. The data of the items that live on the blockchain will be readable forever, and we could use this data as a foundation for a new game or keep using these items in any other game that allows it. The only thing that may be restricted will be using artwork, and other stuff that may be under a copyright.

Earning by gaming

If all ingame items would be tokenized and markets around those games would thrive earning money from gaming could be a possibility. Even if you may not earn a fortune you may get some beer money out of playing some games in your leasure time. If you are a hardcore gamer it may be possible to sell your game characters and loot for some more serious money if you stop playing someday or are just selling items you have no use for anymore. After all you earned them!


All in all i am certain blockchains will change the gaming sector. It may be the first big adoption wave happening.

What is a big plus in my opinion, is that a lot of gamers are pretty tech savy in general, so gaining access to the blockchain is not that much of a struggle as it is for the average person. Blockchains user experience is one of the biggest factors detering people from using it, and i think it will take some more time until fixing this will be a priority in the blockchain sector.

Building the protocol underlying everything seems to be the best choise for now. We need a solid foundation to build upon.