The Growing Gaming Industry Could Flood the Blockchain as Well
Anyone who doesn’t live under the stone is probably aware that the gaming industry has been on a massive rise in recent years, and is one of the industries that has benefited greatly from the pandemic.
However, the average investor may not be familiar with the following growth data:
So what is happening here and where is this growth coming from?
Much of this can be attributed to the rise of technology and exponential growth. Technology continues to transform the way we communicate, how we create and consume information, how we transmit values, and how we form online communities.
Howard Shultz, a former CEO of Starbucks, popularized the idea of a ‘third physical space’ with his cafe concept. His belief was that people need a ‘third space’ to gather outside the office and at home.
Starbucks was the answer.
We see that the same concept is unfolding today among the younger generations, except that the new common space is digital, and it is called the Metaverse.
Children are hanging out more and more here these days. They go there to socialize with their friends, listen to music or play video games. We can consider this the next iteration of digital communities. From AOL chat rooms, then Myspace, Facebook and, finally, the Metaverse.
History of Video Games
The first video game was created in the late 50’s, a simple tennis game similar to Pong. Later, the successful Atari 2600 home video game console was released in 1977. Nintendo began releasing popular arcade games in the early 1980s with Donkey Kong, Mario Bros…
It is important to note that the business model has changed significantly over the years. Previously, games were mostly bought at retail outlets. The games were released in a similar way as Hollywood movies were promoted and released. 90 percent of revenue was generated mostly in the first two weeks of the release of the game.
This model is now completely obsolete. So called freemium model is in.Users play for free and are encouraged to buy in-game to upgrade skills, disguise avatars, buy weapons, improve animations, etc. We see this today on Roblox, Fortnite and other popular games.
This is a much more profitable model for game makers as it keeps their users engaged and forces them to upgrade to compete with their friends.
We are moving into a world where social signaling (digital flex) takes place among the younger generations in the metaverse through in-game avatars, weapons they handle and skins they possess. Welcome to the future.
Why will Gaming move to Blockchain?
Gaming today mostly takes place on fenced data networks. This means that users cannot own their in-game items (skins, avatars, abilities, etc.). The platform owns them. Axie Infinity disrupts this model because users own their assets, in the form of non fungible tokens (NFT), and can sell them on the open market for profit.
Blockchain Enables the Organic Formation of the Game Economy
Users can also be paid to play. Again, Axie Infinity takes the lead here. Axie users are investing in acquiring Axie NFTs and AXS source tokens to start gaming. From there, they can earn a Smooth Love Potion (SLP) token by playing and competing, as the earned tokens can be exchanged for another crypto asset or fiat currency.
Many users in the Philippines earn several times the average monthly salary simply by playing Axie Infinity, all during the economic hardships caused by the pandemic, which is pretty positive news.
If you could be paid to play a game on a blockchain compared to unpaid playing a non-blockchain game, what would you choose? As Charlie Munger says, ‘Show me the incentives and I’ll show you the outcome’.
Blockchain is Open to all and is Free Access
Having a cell phone and internet connection is enough to participate. As smartphone adoption continues to evolve with the growth of 4G and 5G technology in emerging markets, we should expect more and more users to access cryptocurrencies and blockchain-based games in the near future.
Open Protocols Summarize and Compress the Costs of Existing Technologies
Public blockchains are open protocols. Ethereum is an open protocol. Anyone can build games on Ethereum. In this way, developers basically outsource most of their operating and capital costs to Ethereum’s core layer of the blockchain, which means it’s much easier to run the game for entrepreneurs.
Low entry barriers increase competition, which ultimately benefits end users. We have watched this play over and over again in history. Blockchains are simply the next iteration of open source technology.
Decentralization
Because blockchains are open and free to access, anyone can build on them. This means that we should expect a future in which there are blockchain games built on top of different blockchains such as Ethereum, Solana, Cosmos …
Users will be able to easily change games and be able to transfer their assets, such as NFTs in the form of skins, avatars, or weapons. That is something that is not possible today.
Furthermore, users will be able to trade their NFT assets for profit if they wish. Gaming economies are the future, and they will happen on the blockchain too.
Originally published at http://cryptoversechain.wordpress.com on April 25, 2022.
