The blockchain gaming industry is something that never ceases to amaze me. The innovations and advancements that happen in the space are astonishing and the creativity and vision behind some of the teams, not just in terms of tech, but storylines, use cases and functionality is a marvel and I often find myself in awe at the teams behind some of these constructs. In one of my previous articles I cover 8 blockchain gaming projects with serious potential and briefly discuss how the blockchain gaming industry is nowhere near its full potential with many people underestimating or not even being able to fathom how far this industry is going to go. The reason I am more bullish on blockchain gaming than any other industry is quite simple – the sheer volume of users that can be attracted with endless use cases as blockchain gaming interconnects multiple different technologies, industries, companies and end-users leaving limitless potential and eventual global adoption similar to the adoption we have seen with the internet and mobile phones.
Allow me to expand on this point and discuss the power behind the blockchain gaming phenomenon. According to recent statistics from Finances Online, there is said to be 2.69 billion people who frequently enjoy video games, with the gaming industry being worth an estimated $545 billion dollars, a trend that has been increasing over the past 40 years.
That means that one-third of the entire planet are already playing video games with very few incentives to play other than just entertainment, no NFTs, no DeFi, mainly just the fact that games are fun is enough to bring in a third of the planet. Gaming is now also the largest sport in the world, while many people do not consider video gaming a “sport,” Esports is watched by more fans than any other sporting event in the world combined with the most recent Esport Dota2 tournament being tuned in by more viewers than any other major league sporting event in history. All this is just talking about plain old vanilla style gaming without all the exciting the blockchain components.
One of the largest attractions to blockchain gaming are the financial incentives, so let’s talk about DeFi. Nearly everyone on the planet utilizes some form of monetary system whether it be traditional banks or DeFi. Decentralized Finance is growing and being adopted at an astonishing rate with total users nearing 4 million and funds locked up in DeFi continually hitting all-time highs with the total DeFi value locked in at $108 billion dollars at the time of writing. Decentralized Finance is making an impact, changing and challenging the very financial system that our world runs on and is revolutionizing the way in which people are able to earn an income and invest money.
We also can’t talk about blockchain gaming without bringing up NFTs as they have become such an integrated part of the blockchain gaming industry. The use cases, value, and interest in NFTs have increased exponentially, rising faster in value and being adopted by the mainstream faster than any other asset class in history as multiple musicians, pro athletes, and celebrities such as Tom Brady, Jay-Z, Tony Hawk, Eminem, Paris Hilton and Snoop Dogg getting involved and massive companies like McDonald’s, Disney, Nike and Warner Brothers also integrating this technology into their business models.
NFTs are rising in their adoption and use cases not just from celebrities and companies looking to capitalize on their popularity but even the average person is becoming increasingly interested in NFTs as we can see from the growth in Google search trends. With the coveted Christies auction house now selling NFTs, and sites such as Opensea and Rarible being easily accessible to everyone, it is easy for people to “ape in” buying, collecting or selling sort all sorts of NFTs. If you are looking to get into the NFT scene, be sure to check out our article on the top NFT platforms.
NFTs are an interesting asset class as they bridge the gap between the real world and digital world, and even connect digital worlds as some in-game items will be able to be transplanted between games and virtual worlds. While their value in the real world as collectable forms of media has seen explosive growth, they are also seeing their popularity grow alongside the rising growth of metaverses and digital worlds as NFTs are perfectly suited to be utilized in metaverse ecosystems.
Metaverses have been all the hype lately with Microsoft, Sony, and Facebook all getting into metaverses in a big way, with both Microsoft and Facebook launching and announcing plans for their transition into a digital world. With companies pouring billions of dollars into their research and development of these metaverses, not to mention the massively popular decentralized metaverses of Decentraland and the Sandbox already being available to everyone, there is no surprise that metaverse adoption is on the rise becoming very popular among companies, gamers and metaverse enthusiasts.
So, I’ve touched briefly on the traditional gaming industry, NFTs, Metaverses, and DeFi all in an article about the future of blockchain gaming. Bear with me here as I am bringing these all up for a reason and painting a picture for the future potential of blockchain games. Each one of those industries is unique in their own right with their own purposes, use cases, solving different real-world problems and on separate trajectories, yet they all work together harmoniously in the blockchain gaming ecosystem.
DeFi, the concept of a metaverse, the gaming industry and NFTs are all massively growing ecosystems, rising at exponential rates and reaching mainstream adoption faster than the internet did in the early ’90s. Let that sink in, each of these industries alone is reaching astronomical milestones, rising in value and adoption quicker than the internet. The potential value and growth of blockchain gaming is unfathomable as it combines each of these separate industries and brings them together. Many blockchain games contain aspects of DeFi with play-to-earn models and staking features that are transforming societies and economies. Metaverses where these blockchain games can be played, where crypto can be earned and NFTs can be displayed, used, bought or earned and sold for millions of dollars is creating a digital paradise for gamers, collectors, artists, musicians, investors and entrepreneurs. Before we get into what the future might look like, let’s look into the brief history of blockchain games.
History of Blockchain Games
If you are old enough, you remember the days when the only way you could play a video game was to go out and buy or rent a physical copy. I remember renting games from a shop halfway across town and feeling the anticipation and the agonizing minutes I needed to wait as I rushed home to play it; kids today will never know that struggle. Then as the Internet became more popular, there was no longer a need to purchase physical copies of games as now we can just buy them and download them directly to our devices and be gaming within minutes.
At some point, a quiet revolution happened that seemed to go by nearly unnoticed, though it played a massive role in the rapid expansion of gaming adoption into the mainstream, and that was the introduction of the free to play gaming model. With the rising adoption of smartphones and mobile devices allowing gamers the ability to game on the go, we saw a rise of games being released that were completely free to play. Anyone can go onto Google Play, The App Store, or the Nintendo Switch store and download hundreds of games for free. Gone are the days where I drop half my paycheque at places like GameStop.
While the free to play gaming evolution was great as it allowed a lot of people to enjoy games for free, further gaming development and bringing more gamers into the space, blockchain gaming would “one-up” free to play and would introduce the concept of play-to-earn. Many blockchain games are not only free to play but also reward players with tokens, coins or NFTs that have real-world value. One of the earliest blockchain games was Cryptokitties, which was launched in 2017 and allowed players to breed virtual cats then sell the NFTs for crypto, with some cats being sold for over 100k.
Impact of Play to Earn Games
The play to earn gaming model has fundamentally changed the gaming landscape and has not only shaken up the world of traditional gaming but finance and economics as well. I don’t think anyone was ready for, nor would have predicted the impact that the 2018’s release of Axie Infinity would have on the world, opening up everyone’s eyes for the first time to how powerful and disruptive the play-to-earn gaming model can be. The play-to-earn model in Axie Infinity turned out to be so lucrative that fortunes were made by many players in a very short period of time, paying people so much that they were able to purchase homes outright in places like the Philippines and people were actually quitting their jobs as they could earn more by playing Axie Infinity than they could earn at their jobs.
This gaming model also provided a living salary to many people in parts of the world where work is scarce and has had such an impact that the Philippine government is now looking to introduce a specific tax for wealth generated in games as they also want their cut. The introduction of the play-to-earn model has changed the ways in which we think about traditional finance and economics.
Evolution of In-Game Assets
It is not uncommon for traditional games to have in-game currencies, look no further than Grand Theft Auto where my bank account is in the multi-millions and I have sports cars, mansions and I have no idea where I parked my helicopter. It always causes me to second guess my life’s decisions when my video game character reaches a level of success beyond what I’ve accomplished in real life, but let’s not think about that. Traditionally, in-game currencies were only useable locally within that game, nobody in the real world cared about how many gold shillings your level 12 wizard had.
While gamers have been able to earn money trading gaming assets for real-world wealth for years by selling items like World of Warcraft characters to other players, it wasn’t until the creation of blockchain gaming where users could earn tokens or NFTs with real-world monetary value that could be sold easily and immediately for cash or other digital assets. Blockchain-powered gaming gives the ability to break open digital asset’s marketplaces, making them accessible on a global scale and freely exchange value on NFT platforms, crypto exchanges, and even peer-to-peer ecosystems without having to trust third-party intermediaries.
Aside from being able to transfer in-game wealth to real-world value, another way that blockchain gaming revolutionized the traditional gaming industry is by introducing the ability to tokenize in-game assets. Blockchain technology provides a system for recording and securing virtual property rights to verify ownership and authenticity, with verified authentic items that can then be bought and sold on open marketplaces. By tokenizing assets, this will also enable users the ability to transfer some of these assets around to other metaverses and games.
The Future of Blockchain Gaming
I am going to use a little artistic leeway here and cover an extreme case for what is possible for the future of blockchain gaming. While the future landscape is impossible to traverse without a crystal ball, I am going to draw up a possible future for consideration with regards to where blockchain gaming could go. To really consider the grand scale of the impact that blockchain gaming can have, we need to think in terms outside of the realm of just gaming.
Blockchain games are going to become more than just a place where players go to kick a ball around or shoot zombies for fun, the future of blockchain gaming utilizing play-to-earn mechanics has the power to disrupt entire financial systems and economies as we have already seen a glimpse of this happening. The economic and financial landscape of the Philippines has already been altered so much due to the mass amount of wealth being collected by players located there that the government needed to impose an entirely new tax scheme for in-game earnings. One game alone had the power to pour so much wealth into the Philippine economy, that the people now have opportunities that they likely would have never had before which can have a hugely beneficial ripple effect on the nation as a whole.
There are so many blockchain games on the horizon, being released at a faster pace than before with titles being more complex. Games like Star Atlas will contain an entire universe that runs on its own economic and financial system, where players will be able to earn an income doing almost anything they can imagine, or just earn a salary performing a multitude of virtual jobs. A recent review covered how the game will have jobs available ranging from mining workers to space pilots and soldiers, imagine a world where people quit their actual world jobs in droves to pursue careers in metaverses such as Star Atlas. This is a realistic possibility, and I would say even a likely probability, as it isn’t a stretch to consider that people would rather zip around the galaxy and fight aliens while earning money instead of being tied to a desk and staring at Excel spreadsheets all day.
With real-world jobs disappearing due to automation, I can see a future similar to Ready Player One, with expansive and interoperable metaverses where people spend the majority of their time not just gaming, but essentially living a digital life. Blockchain gaming is likely to be the key feature that will be shared by the metaverse as people will need something entertaining to do that will entice them to visit. While having fun and playing videos games is a motivating enough reason for most people, nothing motivates quite like money and when you can earn money while having fun at the same time, to me that sounds like heaven on Earth…Or a virtual heaven on a virtual Earth anyway.
As the blockchain gaming industry grows, many of these games will only be accessible via a metaverse which will cause these metaverses to grow and many of the jobs that exist in real life will need to be performed in the virtual world. As there is land for sale, that means there will also be jobs going for things like builders who will build on the land, digital real estate agents and managers, event organizers, artists and musicians will be performing in these digital lands so there will be a need for things like band managers and merch creators. I would imagine that there will be people we will be able to hire to play games for us as well. Being a “professional gamer for hire” is likely to become an in-demand job as we will need to hire pros to beat those difficult levels to earn some NFT or valuable assets when the games become too difficult for the average player. It is too early to know all the ways in which the metaverse will shape our lives, but the limit is only humanity’s imagination for what these metaverses will become.
It isn’t going to be all sunshine and rainbows for blockchain games though as there are likely going to be legislations and legal hurdles that the play-to-earn model will need to contend with for them to reach mass adoption. We have already seen world governments step in to regulate tax on crypto holdings and we are watching them struggle like one-legged ducks swimming in circles as they try and navigate how to regulate stablecoins and DeFi. They will also likely need to take further action to regulate the world of play-to-earn gaming models as the government can’t stand to see people prosper without them taking their cut. In an extreme case, they may even need to step in and do something to squash the play-to-earn gaming model altogether should they need to prevent a mass exodus of people from leaving the workforce to pursue virtual careers.
What The Future of Blockchain Gaming Means for NFTs, the Metaverse and DeFi
It has been often said that gaming will be the cornerstone, if not the foundation in which metaverses will be built. After all, there needs to be something going on in a metaverse that is exciting enough to make people want to visit, and games are the logical attraction. Blockchain gaming is likely to continue to expand and attract not only gamers but also those who would not typically consider themselves gamers if the rewards provided in the play to earn system are lucrative enough.
Blockchain gaming has the unique ability to span beyond the interests of just gamers who want to play or earn money, as blockchain games also have the ability to incorporate and reward players with NFTs. Fans of music, art, fashion and collectors in general who may not be into games can be encouraged to get involved if gaming is the only way they can get their hands on an NFT collectable. With luxury clothing brands such as Gucci, Burberry and Louis Vuitton minting NFTs, this could bring an entirely new market for players who may need to interact with a game if they want those fancy Gucci sneakers.
There is no limit to what rewards can be offered in blockchain games meaning there will likely be something to entice almost everybody. I believe that blockchain gaming is going to span across multiple interests, use cases and genres becoming more attractive to a wider audience and bringing more people into the world of blockchain gaming, DeFi and metaverses. I believe that the entire industry is going to grow at an exponential rate and continue to reach milestones never before reached in human history with advancements in user adoption, technology and innovation. The entire space will eventually become a self-fueling fire with many individual self-sustaining ecosystems and as more games develop, they will attract more users, which will attract more businesses who will offer more rewards, attracting more users and so on with the entire blockchain gaming, NFT, DeFi and metaverse space becoming an inextinguishable inferno that will be incorporated into the average person’s daily life.
While all these considerations are interesting to ponder and consider when thinking about what the future of this space will look like, I guess only time will tell. There is already an interesting and plausible theory, similar to the film The Matrix that states that we are already all living inside of a computer simulation with people like Elon Musk and Neil deGrasse Tyson even giving credibility to that theory, with Tyson going as far as stating that there’s about a 50/50 chance we are living in a simulation. Maybe we are already just simulations inside of a metaverse and will all eventually be playing play-to-earn blockchain games inside of another simulated metaverse and someday our metaverse avatars will also create their own little simulations and all “life” will basically be metaverses within metaverses, Rick and Morty style. With that thought, I better call this article to a close before my tin-foil hat falls off and my head explodes.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.