Blockchain-based game economy is the 5 reasons for the future


Anyone who has not lived under a rock may know that the gaming industry is already in a state of absolute tearing. It is one of the industries that has benefited a lot from the COVID-19 pandemic.

In other words, ordinary investors may not know the following growth data:

  • The global gaming market is currently worth 180 billion U.S. dollars-the fastest growing form of entertainment in the world. For reference, the global film industry is worth 100 billion U.S. dollars, and the total annual income of all sports in North America is 73 billion U.S. dollars.
Global gaming market revenue. Source: Bloomberg, Pelham Smithers, GamingScan.com
  • expert predict By 2025, the number of online streaming of online games will increase to 1 billion-today it is one-ninth.
  • Of the four highest-rated sports events in the United States in 2018, three were not even traditional sports events. They are e-sports events. For example, the League of Legends champion has 30 million more views than the Football League champion, and 45 million more views than the NCAA football champion.
U.S. e-sports audience. Source: [email protected]
  • Travis Scott performed live on the popular gaming platform Fortnite in April last year. It has received more than 12.3 million views and has brought in more than $20 million in revenue for each of TechCrunch and GamesIndustry.biz for Scott.

So what happened here and where did this growth come from?

We can attribute most of this to the rise of technology and exponential growth. Technology continues to change the way we communicate, the way we assemble, the way we create and consume information, the way we deliver value, and the way we form online communities.

Former Starbucks CEO Howard Shultz promoted the concept of “third physical space” with his coffee shop concept. He believes that humans need a “third space” to gather outside the office and at home. Starbucks is the answer.

Today, we see the same concept being played out among the younger generation. Except that the new shared space is digital, it is called metaverse. This is where children are going out to play more and more nowadays. They go there to interact with their friends. Listen to music or play video games. We can think of it as the next iteration of the digital community: AOL chat rooms, and then Myspace. Facebook, the last is Metaverse.

We are now holding a concert in the meta universe. Burning Man Festival has been digitized. And we are just getting started.

Game history

The first video game appeared in the late 1950s-a simple tennis game similar to Pong. Later, Atari was invented in 1977. Nintendo has released popular games since the early 1980s, including Mario Brothers, The Legend of Zelda, Donkey Kong, etc.

It is worth noting that the business model has undergone major changes over the years. For example, we used to pay $60 for a game on GameStop, and then we went. This is a one-time fee for unlimited play. The distribution method of the game is similar to the promotion and distribution method of Hollywood movies. 90% of revenue will be realized within the first two weeks.

This model is out. The freemium model has emerged. Users play games for free and are induced to make in-game purchases to upgrade skills, dress up avatars, purchase weapons, enhance animations, etc. We saw this in Roblox, Fortnite, and other popular games today.

For game makers, this is a more profitable model because it allows their users to stay engaged and constantly upgrade to compete with their friends. We are entering a world in which the young generation in the meta-universe transmits social signals through the avatars in the game, the weapons they use, and the skins they own. Welcome to the future.

Why games will move to blockchain

  • Today’s game takes place on a closed data network. This means that users cannot own their game assets (skins, avatars, abilities, etc.). The platform owns them. Axie Infinity is subverting this model because users own their assets on Axie, such as non-fungible tokens (NFT), and can sell them in the free market/gaming economy for profit. The following is a view of the revenue received by Axie Infinity users since May of this year:
Axie Infinity total revenue.Source: Token Terminal

The annualized revenue of each token terminal is shaken to US$2.7 billion For this open and permissionless paid blockchain game. Important note: Blockchain technology is a tool through which users can own their game assets. This is impossible with the technology used today.

  • Blockchain allows the game economy to form organically. Users can pay to play. Again, Axie Infinity leads here. Axie users invest to get Axie NFT and AXS native tokens to start the game. From there, they can earn SLP tokens through playing/competition, because the tokens obtained can be exchanged for other encrypted assets or fiat currencies, etc. Many users in the Philippines can earn several times their usual monthly salary just by playing Axie Infinity. This is all very cool during the economic hardship caused by COVID-19. Let me ask you: If you can get paid for playing games on the blockchain, but you are not paid for playing games in non-blockchain games, which one would you choose? As Charlie Munger said: “Show me incentives and I will show you the results.”
  • Public blockchain is open to everyone without permission. Do you have a mobile phone and internet connection? Cool, your participation is welcome. In today’s closed data architecture, this is not really the way to work, especially if you live outside the United States.Not only can participate in the blockchain, but also earn income. With the development of 4G and 5G technologies in emerging markets, the adoption rate of smartphones continues to expand. We should expect that in the near future, more and more users will access games based on encryption and blockchain.
  • Open protocols collapse and compress the cost of existing technologies. The public blockchain is an open protocol. Ethereum is an open protocol. Anyone can build games on Ethereum. By doing this, people fundamentally outsource most of their operations and capital costs to the Ethereum base layer blockchain, which means that it is easier for entrepreneurs to start the game. The barriers to entry are low and competition is intensifying. This ultimately benefits the end user. We have seen this situation time and time again in history. Blockchain is just the next iteration of open source technology.
  • Decentralization. Since the blockchain is open and permissionless, anyone can build on it. This means that we should expect future blockchain games to be built on various first-layer blockchains, such as Ethereum, Solana, Cosmos, etc. Users will be able to switch games easily, and they will be able to bring their assets, such as NFTs in the form of skins, avatars or weapons. This is impossible today. In addition, if users are willing, they will be able to trade their NFT assets for profit, or they may want to establish an NFT? Come on-you don’t have to have a gaming platform to do this.

The game economy is the future, and they will happen on the blockchain.

The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.