LIFE IN THE METAVERSE: HOW BLOCKCHAIN-BASED GAMING MAY LEAD US THERE
The video gaming industry is evolving across several dimensions.
It’s no secret that all user experiences are morphing. In-person split-screen play has given way to massively distributed online games with global reach. Immersive virtual and augmented realities are allowing gamers to play in alternative digital realms that are more real than reality.
Basically, games are no longer confined to the bedroom. They can be played anywhere and anytime via a smartphone.
Also, business models are evolving. The days of selling games in stores are over and are now being replaced by a “free-to-play” model monetized through in-game purchases and advertising. Gamers are invested with more power than before with all the eSports tournaments and streaming services such as Twitch that give them a “slice” of the gaming industry revenues for the first time.
But a new trend is emerging.
Ten years after the launch of Bitcoin, blockchain technology is being leveraged to redefine gaming experiences for developers and players alike. Innovations such as NFTs and smart contracts have given developers a whole new set of tools for crafting gaming experiences including their related economies.
Like we didn’t have enough existential questions, with the introduction of blockchain technology come new ones. What are the incentive structures that align the interests of game developers, players, and spectators? Does the introduction of digital assets merely provide developers with a new avenue for extracting rents from gamers? Or does it deliver gamers more enjoyable and valuable gaming experiences?
In my opinion, all signs point to the most popular blockchain-based games being the biggest proof of concept in the gaming industry today. Understanding how technology is now being embedded in and influencing games will help us better understand how this emerging industry could evolve. And it’s only a matter of time before blockchain technology becomes pervasive across the gaming industry.
So hop on board while the tide is low. Let’s have a quick look at how blockchain-based gaming may take us into the future.
WTF IS UP WITH “THE METAVERSE”, RIGHT?
You’ve probably heard the terms “blockchain gaming” and “the metaverse” used together. But what do they mean, and where do they fit in this digital universe? And where does blockchain-based gaming reside within it?
I won’t try to define the metaverse, cause it’s tricky and there are plenty of descriptions around. The thing is that it’s already here. With each passing day, people are spending more and more of their waking hours online. Consequently, the numbers and depth of the digital experiences that humans have daily are increasing due to all these new forms of digital media entertainment, and immersive UX.
From another perspective, it’s a faraway reality. Unlike the virtual worlds imagined in movies such as Ready Player One and The Matrix, traditional open-world gaming examples such as Minecraft and blockchain-enabled digital worlds like Decentraland are more akin to playgrounds than fully immersive environments.
While there is no set definition of the metaverse, thought leaders in gaming and investing provide context-rich definitions of the metaverse:
“Realtime 3D social medium where people can create and engage in shared experiences as equal participants in an economy with societal impact.” Tim Sweeney · CEO of Epic Games
“A persistent, infinitely scaling virtual space with its own economy and identity system.” Jonathan Lai · Partner at a16z
“A sort of successor state to the mobile internet…[There] will be no clean ‘Before Metaverse’ and ‘After Metaverse’. Instead, it will slowly emerge over time as different products, services and capabilities integrate and meld together.” Matthew Ball · Venture Capitalist at Epyllion Co, Makers Fund
Blockchain gaming’s metaverse tendencies will only get stronger as more people realize what it means for their games. And if you’ve been following trends lately, you won’t be surprised by anything that comes out next.
METAVERSE TRENDS TODAY
I know, I know, the exhaustive version of the metaverse is years away and might be kinda challenging to envision. Though, if you’re good at speculating, there is some solid data in these following trends on how the metaverse is emerging. By examining the attendance at eSports competitions and virtual gatherings we can find one way of quantifying its rise.
Source: The Block Research, ESPN, Nielsen, CNBC, Forbes, The Verge, BBC, Hollywood Reporter, WSJ, FIFA
The data doesn’t surprise me. Outperforming the Game of Thrones finale, the extensive crowds that the League of Legends draws for its World Championships, demonstrate just how mainstream digitally native events have already become. These large gatherings in fully digital environments with shared experiences and interactions are just the propaedeutics of how metaverse events would look like.
Artists are taking advantage of this technology and now we witness virtual concerts that draw massive crowds, delivering highly immersive experiences.
Take a look at American rapper Travis Scott who in April 2020 performed to a crowd of over 12 million (~100x the size of the largest NFL stadium) in a virtual concert hosted in Fortnite. For several days leading up to the concert, Fortnite players could see a stage being constructed at the beach concert venue, Sweaty Sands Beach, and the event kicked off with a pre-show where players battled it out before Scott came on. During the show, players flew around the planet beneath a gargantuan digital representation of Scott that turned into a cyborg at one point during the concert.
This is just the peak of the iceberg. More and more immersive experiences will arise, enabled by this versatile blockchain technology.
One of the best examples of the metaverse showing us what it’s got was Metapalooza, a fully virtual event that took place in January 2021. It was a pretty unique experience, involving participants wearing VR headsets, a live art marketplace selling fractionalized NFTs, and a live DJ. Attendees also participated in a scavenger hunt where they answered questions and performed tasks to find items hidden around the virtual museum.
But the main attraction was a live auction of art pieces put on by Metapurse, a venture capital firm. The company purchased 20 art pieces created by Beeple, the American digital artist whose digital artwork called “Everyday’s — The First 5000 Days” sold for a record $69 million at Christie’s auction house. What else happened there? Metapurse bought premium land plots in three virtual venues Decentraland, Somnium Space, and Cryptovoxels, and constructed virtual museums to display the art pieces.
That’s not all. Ownership of these 20 art pieces and the virtual art museums were bundled into an NFT called B.20 which was then fractionalized into 10 million tokens. 25% of these tokens sold out in a matter of seconds in a live auction hosted at the event.
All this while DJ 3LAU, played music throughout the event while interacting with fans through Discord. Virtuality is not so virtual anymore.
CATALYSTS FOR ADOPTION
If you’re thinking about implementing blockchain into your games, you have to keep in mind that there are some challenges.
Things like managing wallet infrastructure, account recovery services, regulatory uncertainties, and reputational risks are all key considerations for large game studios and enterprises building applications for a mass market audience.
You might wonder how to increase the adoption of blockchain gaming. One natural catalyst would be reducing the friction that comes with implementing blockchain technology for both gamers and developers. Also, if you’re an infrastructure provider, I find it imperative to leave the complex and obscure concepts that come with blockchain technology (wallet services, compliance services, etc.) to make it easier for game developers to build out blockchain-based games or potentially incorporate blockchain technology into their existing gaming platforms.
For example, Josh Williams, CEO of Forte, a blockchain game development platform states:
“We set out to create a platform that makes it easy for game developers of any size, including the world’s largest publishers, to incorporate blockchain technology into their games, to enable players to own digital goods and currencies, and trade with each other, have true property rights and, create thriving economies that both players and publishers can benefit from.”
THE GAMING MARKET SIZE
It’s no secret that gaming has a massive user base. This year video game players are projected to surpass ~3BN. Blockchain-based games are starting to emerge, and according to DappRadar are an estimated 1,000 of them. Yes, compared to the over 1 million individual video games that exist today, this is just a small fraction, but bear with me, it’s good news, in the sense that it’s still a young market (literally and metaphorically). Still plenty of room to explore. And even small levels of adoption of blockchain technology on a percentage basis could represent massive growth in users from current levels.
Source: NewZoo, DappRadar, GamingShift
THE WINDS OF CHANGE
“Boomers thought “good service” meant white-glove high touch service. Gen Z thinks “good service” means not having to interact with a human at all.”
Ari Paul · BlockTower Capital
Source: The Block Research
The intuition tells us and the data shows us that the adoption of blockchain-based gaming, and more broadly, the growth of the metaverse will be driven by younger generations. Millennials and Gen Z are your BFFs, because they’re by far the largest consumers of video gaming and more broadly, modern “metaverse-like” forms of entertainment.
It would be a shame to undermine the younger generations’ potential. Why? Well, their familiarity with digital mediums and moreover, their willingness and desire to experiment with new technologies such as blockchain technology could catalyze the adoption of blockchain gaming.
BLOCKCHAIN-BASED GAMING IS THE METAFUTURE
According to Financial Express, blockchain-based games still account for over 50% of usage in the industry, averaging 847,000 daily active wallets (UAWs). From an NFT perspective, total trading volume related to games saw an increase of 13.25% in August, and turnover increased by 83.36% to over 1.3 million traded NFTs. Fantastic news also comes from a ChainPlay survey, which states that 75% of GameFi investors entered the cryptocurrency sector solely for game-based projects, and 81% prioritized positive gaming experiences beyond making a profit.
Gaming will drive crypto adoption in a big way, and this will slowly but surely open the gates for the Metaverse. Since the word metaverse was coined in 1987, we have been able to make science fiction a reality.
First, we imagined, then we played, and lastly, technology followed.
Daniel Tamas is the CEO and co-founder of WAM app, the world’s first hyper-casual gaming platform, and internationally validated play-to-earn social gaming platform, reaching 1st place in the Top Charts of the App Stores. He’s also an entrepreneur, investor, and founder of various companies, but most importantly a Frenchie lover and a hot sauce enthusiast
