The Curious Case of how Blockchain and Crypto are Enhancing the Gaming Industry like Never Before

The gaming industry is a multi-billion-dollar industry. Whether you have fond memories of playing GTA, DOTA, or Mario Kart – online games take us back to our childhoods. However, make no mistake. A majority of the 3 billion gamers worldwide are adults. And online games and the platforms they are built on have come a long way. A CAGR of 10.2% highlights that the gaming industry is not a niche anymore.

Another industry that has been growing steadily in the past decade is the crypto industry. A combination of the two was inevitable. Crypto adoption is transforming various industries. Let us take a look at how blockchains and cryptocurrencies have an impact on the gaming industry.

Evolution of the Gaming Industry

Many industries like manufacturing, medical, education, and hospitality adopt new and emerging technologies to create better products and enhance processes. On the other hand, the gaming industry itself was built because of new technology. The ‘Brown Box’ by Ralph Baer was the first instance of a video-game system for the commercial market.

And as technology has evolved, so have video games. Along with better programming languages, technologies like LAN, Ethernet cards, and mobile phones have played a great role in bringing the gaming industry mainstream. This has been even more evident in the last couple of years. Further advancements in AI, AR, VR, and blockchain technology have had a significant impact on the creation of games.

Benefits of Blockchain in the Gaming Industry

As discussed in a previous article, a blockchain is a decentralized digital ledger. Various industries benefit from blockchain technology, and so does the gaming industry. Think about an ice cream sundae. Ice creams are nice, and so are brownies, but a combination of the two is simply perfect. Similarly, adding blockchain technology to the gaming industry will enhance the gaming experience for users.

Just like all other fields involving transactions, the gaming industry can benefit from the secure transactions that blockchains offer. Transactions of blockchain are transparent and immutable, thereby eliminating fraud and double-spends.

Similarly, blockchains can also provide an additional level of protection for game progress, player information, and in-game assets.

Most games have their own in-game currency, which is virtually useless elsewhere. However, games on blockchain have their native tokens. You can even buy or sell these tokens on any cryptocurrency exchange. Perhaps another reason to invest in cryptocurrency?

Besides this, blockchain can also enable the trading of customized avatars, rare weapons or supplies, and other in-game assets in the form of NFTs. This allows gamers to profit from their achievements on a much larger scale.

DAOs, which make use of blockchains will ensure that the in-game community decides the future of a game. This eliminates the power lying exclusively in the hands of game developers.

SocialFi is another by-product of blockchain technology. It opens up another avenue that would help gamers to earn revenue.

Despite these advantages, there are a few drawbacks as well. For example, some games may have higher costs to start playing, the gameplay may be basic and more focused on earning, while some have concerns with regulations.

Blockchain Games in the Current Market

CryptoKitties was the first-ever cryptocurrency game launched in the market, in 2017. It became so popular after its launch, that it congested the Ethereum network. The highest number of transactions on the Ethereum network coincided with this launch. Today, there are over 400 blockchain-based games available. Among these, Axie Infinity, Plant vs Undead, Cryptokitties, Decentraland, and Lucky Block are the most popular ones.

Despite the bear market, 52% of cryptocurrency activity revolved around the gaming sector in the first quarter of 2022. As a result, there has been no significant change in GameFi adoption.

End Note

Apart from online gaming enthusiasts, it seems like cryptocurrencies have also entered the sports sector. While Coinbase ran their ad during the Superbowl, football, UFC, and basketball companies are using fan tokens on their platforms. Crypto adoption in gaming and sports is on the rise.

The Blockchain Game Alliance does a great job at raising awareness regarding the use of blockchain in the gaming industry. Their 2021 survey report claims that around 86% of their respondents believe that some of the gaming industry will be using blockchain within the next two years. Only time can tell whether or not cryptocurrencies will eventually disrupt the gaming industry. However, game-based NFTs and gaming tokens are proving to be popular among gaming enthusiasts. This, in essence, will further boost the adoption of cryptocurrencies.

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