Hi, friends! Today, we will talk about one of the most promising areas for blockchain application – games. Crypto gaming is a very broad theme, so we will give only a general understanding of why blockchain is needed in games and why crypto game projects will be the most lucrative for investors and players in future. Let’s roll! It’s known that the video game industry, especially its mobile segment, is growing very fast. For example, revenue from the mobile game sector in 2017 grew by more than 23% against that of 2016.
At the same time, free-to-play games accounted for the lion’s share of the revenue. According to various estimates, they generated about 75%. Free-2-play is the most profitable payback game model. Such games are free, but they offer the player to buy premium currency or hard currency, such as gem stones, gold, crystals and even donuts.
There are so many examples of free2play games – the famous Clash of clans, Candy crush, Clash royale, Mobile strike, Game of war and so on. So, why do we highlight this game category? We do so because f2p games are the perfect medium for tokenization – replace hard currency in the game with tokens and you will get ideal symbiosis. Let’s assume that the “hard currency” of a game is a cryptocurrency emitted in limited quantity and sold for use in the game. The more popular the game is, the greater the liquidity acquired by that crypto currency. For a player, getting a game cryptocurrency as a prize is an opportunity to earn real money by playing the game without being a professional cyberathlete.
Yulia, but what’s the attitude of mobile platforms towards cryptocurrencies in a game? That’s a good question! For now, it’s negative)) We will certainly invite to our studio representatives of app stores to hear their official position. But for now, in order to comply with platform rules, game developers have introduced tokens only in desktop (Windows, MacOS) computers and web versions of games.
The tokens themselves are typically purchased during game ICOs, on cryptocurrency exchanges that support the listing of such tokens. They can also be purchased directly from the game site. We all know that blockchain technology is not limited to cryptocurrencies alone. So, how else is blockchain used in games? First, the emergence of smart contracts has made it possible to use blockchain to create and securely exchange unique digital assets.
Blockchain also ensures reliable storage of such assets because they are not kept in a separate private server, but in a publicly accessible register. Secondly, blockchain guarantees the so-called Proof of Asset Scarcity. As a public distributed register, blockchain will enable game developers to prove the rarity of virtual objects created by them. Players will always be able to check the exact amount of a particular virtual item released.
Roma, since you’ve touched the topic of rare game objects, let me mention the Ethereum ERC721 token that is unusual to us. This token is ideal for creating crypto collectibles. The notorious virtual cats CryptoKitties, which have unique attributes such as breed, color and age, are the same very ERC-721 tokens. Let’s compare them with the ERC-20 standard widely used in many ICOs. ERC-20 tokens are “interchangeable”.
This means that each ERC20 token is a complete copy of another ERC20 token. This interchangeability property is not suitable for “crypto- collectibles” because collectible items must have permanent unique attributes. Such attributes make collectible items not only very popular but also extremely valuable. Secondly, ERC-20 markers can be divided, which means that users can split the token into small parts for purchase or sale. This property is again not suitable for collectibles, because they are valuable only as an integral whole. Thus, ERC-721 tokens are non- interchangeable and indivisible.
This token standard is increasingly gaining popularity. The first cryptogaming project with Russian roots, which uses the ERC-721 standard, is the Ethernal Heroes project from the Game Garden studio – a blockchain-based collectible card battler. Its target audience are fans of hardcore card games, such as Hearthstone and Magic: The Gathering. In Ethernal Heroes, there are several types of card rarity, including ultra-rare and legendary. These cards are issued in a strictly limited quantity and are traded only at a gaming auction.
Developers from Game Garden used the ERC-721 standard to create and guarantee the uniqueness of such auction cards. If you want to know more about ERC-721, please follow the link below. I would like to touch on another problem in the game industry, which can be solved using the blockchain. I’m talking about the draconian commissions charged by stores such as Steam, Apple, and Google.
As you know, Google and Apple charge up to 30% of the revenue received by game developers from user’s expenses both in paid and in free games with in-game purchases. In the meantime, store killers are being developed in the crypto world. These are special crypto-payment systems for online games. They are powered by smart contracts with a single accounting token.
The primary advantages of such alternative crypto stores for developers is that they charge low commissions (up to 10% of revenue on the game) and they are fast in paying out compensation to developers for the sale of their game apps. As you know, Google and Apple pay such a reward within a period of up to 60 days. But these alternative crypto stores promise to do it within 3 days. So, friends, you can see that blockchain technology will create an entire alternative economy for the game industry, with minimal transaction and intermediary costs. It would also guarantee safety of your virtual assets. As I already mentioned, this was the first introductory topic on the theme of blockchain games.
Later on, we will analyze specific game cases and invite developers and advisers of the most successful crypto- gaming projects to our studio for an interview. On the studio today were Roman Kaufman and Julia Plavnik.