The real state of blockchain gaming.
Desire Omunakwe
Web3 Community Builder | Digital Art Enthusiast | Empowering Creatives Through Innovation
Blockchain Gaming
A video game that utilizes blockchain technology, such as cryptocurrencies and non-fungible tokens, is referred to as a blockchain game. These games let players purchase, sell, or trade in-game assets with other players. The game publisher takes a cut of each transaction, as a method of monetization. Due to the technologies they contain that let players earn crypto through gaming, they are also referred to as “play-to-earn” games. Cryptocurrencies and NFTs, which use blockchain technology, are prospective revenue streams for video games. Many online games allow players to customize their characters in-game using skins or other in-game accessories, which they can acquire and exchange with other players for in-game or real world cash.
In certain games, you may trade virtual assets for real-world money, however this may be against the law in some nations where people view video games as related to gambling. Since this has given rise to problems in the gray market like skin gambling, publishers have traditionally been reluctant to permit players to make money from games using real money. A common feature of blockchain games is the possibility for players to swap in-game currency for real money, perhaps avoiding certain issues with gray markets owing to the traceability of the blockchain.
Traction and Acceptance
Blockchain-based video games have become more popular in the gaming market over the past several years.
Although there were early instances like the 2017 introduction of CryptoKitties, the trend has really taken off, with well-known game companies even looking at the technology.
The market value of blockchain games was approximately $25 billion at the start of 2022, and even in the midst of a bear market, it doesn’t appear to be declining anytime soon. Blockchain games and non-fungible tokens (NFT), which have lately been very tightly entwined, are the two most stable segments of the cryptocurrency market this year, according to the analytical firm DappRadar. This has led to the emergence of a new economic phenomena.
Acceptance Stories
The Blockchain Game Alliance was established in 2018 by a number of top blockchain businesses such as Ubisoft, Fig, Gimli, Alto, and Ultra. Leading gaming and blockchain businesses have joined forces to form the association, which seeks to democratize blockchain in the gaming sector.
Together, the group aims to provide a public platform for debate and cooperation on the best methods to use blockchain technology into gaming, including the creation of standards and best practices.
People in Cabanatuan City, which is north of Manila, have discovered a novel approach to lessen the misery caused by lockdowns as the Covid-19 outbreak has affected the Philippines. They achieve this by playing blockchain video games. But gaming isn’t only for entertainment for these folks. The SkyMavis-developed game Axie Infinity enables users to make money using non-fungible tokens (NFTS) and cryptocurrencies by breeding, battling, and selling virtual creatures called Axies.
Some in the business have high hopes for blockchain-based games like Axie as a work alternative for the large, already-existing outsourcing businesses in the Philippines.
Square Enix president Yosuke Matsuda mentioned NTFs, the metaverse (a word used to represent a fictitious, online virtual world), cloud technology, and cryptocurrencies as significant themes he sees in the games industry that the publisher would follow in his 2022 new year letter. By promoting the “play to earn” idea, the president claimed that he thought blockchain games “have the potential to enable self-sustaining game growth.” He also recognized that there was some skepticism about blockchain, but he insisted that it may draw in new users.
Matsuda said that Square Enix may launch a coin to support such games.Square Enix president Yosuke Matsuda mentioned NTFs, the metaverse (a word used to represent a fictitious, online virtual world), cloud technology, and cryptocurrencies as significant themes he sees in the games industry that the publisher would follow in his 2022 new year letter. By promoting the “play to earn” idea, the president claimed that he thought blockchain games “have the potential to enable self-sustaining game growth.” He also recognized that there was some skepticism about blockchain, but he insisted that it may draw in new users. Matsuda said that Square Enix may launch a coin to support such games.
Contrary to its rival Valve, Epic told The Verge that it is “open to titles that enable cryptocurrencies or blockchain-based assets” on its game store. There will be certain restrictions, but Epic said it was open to working with “early developers” in the “new sector.”
According to Epic, the games must adhere to financial regulations, be age-appropriate, and explain how the blockchain works. Additionally, it states that developers must utilize their own payment methods instead of using Epic’s payment service to take cryptocurrency.
The next game from 22 Cans, Legacy, according to English game designer and programmer Peter Douglas Molyneux, would use the blockchain and let players purchase NFTs in a business simulation setting. In this business simulation game, you assemble items from tens of thousands of pieces, which a “army of workers” will later assemble and make available for sale on the open market. On this free market, anything and everything may be traded with the aim of dominating the marketplace. However, you must first purchase a Land NFT on which to establish your business. All transactions are made using LegacyCoin, a cryptocurrency running on the Ethereum network.
Hall of fame game designer, Will Wright is making a blockchain video game, he told Axios. The initiative by Wright is named VoxVerse. Players should be able to own property, develop attractions, mine for resources, and socialize in this virtual environment. He imagines a game that will draw in three different demographics: a small number of wealthy virtual landowners who will pay for plots with cryptocurrency; a middle demographic of creative players who will be tapped by the landowners to create things (and share any sale proceeds); and a large demographic of free-to-play players who will hang out and play in the world. He envisions the ability for users to repeatedly click on and change a basic object (a vehicle, coffee cup, etc.) to customize it, make it their own, or even “copyright” it via the blockchain for re-use that generates income.
Bottlenecks
A report according to gamesradar, states the growing issues with the NFT game Axie Infinity game as it is currently struggling with a lack of “play to earn” workers after suffering a hack that resulted in the theft of over $600 million in cryptocurrencies. This has basically left the virtual version of landlords with a scarcity of renters for their axies. Dan Olson, the creator of the YouTube channel Folding Ideas, recently tweeted a concise summary of the problem. Olson said, “The Axie Infinity creators’ remarks are full of angry digital landlords who are upset that all of their “scholars” are departing the game and failing to meet their weekly quotas.
Minecraft will not allow non-fungible tokens (NFTs) to be used on the popular gaming platform, with the company describing them as antithetical to Minecraft’s “values of creative inclusion and playing together”. Minecraft, which allows users to build whole virtual worlds, is highly customisable. Over the more than 10 years the game has existed it has built a huge community of users who design skins, mods and maps for the game. And finally the announcement was made In a blog post, the developers said blockchain technology was not permitted, stating it was antithetical to Minecraft’s values.
Ubisoft announced it is no longer making content for Tom Clancy’s Ghost Recon: Breakpoint — including its controversial NFTs. “You own a piece of the game and have left your mark in its history,” the message said, thanking all Ghost Recon: Breakpoint players who received their first Digits, Ubisoft’s name for its NFTs. News of Ubisoft’s entry into selling NFTs was met with confusion and frustration among some of its own staff, as well as backlash from members of the public. Earlier this year, Ubisoft Strategic Innovations Lab vice president Nicolas Pouard said in an interview that gamers “don’t get” how they can benefit from NFTs.
Phil Spencer, the director of gaming at Microsoft, is skeptical about the potential of NFT gaming and claims that certain recent developments “appear exploitative.” Xbox has the authority to admit NFT gaming firms and their projects into its ecosystem or bar them as the owner of one of the largest online gaming markets in the world.
“What I’d say today on NFT, all up, is I think there’s a lot of speculation and experimentation that’s happening, and that some of the creative that I see today feels more exploitive than about entertainment,” Spencer told Axios.
NFTs will no longer be present in S.T.A.L.K.E.R. 2: Heart of Chernobyl, according to developer GSC Game World’s announcement. The revelation comes after a statement that was sharply criticized and after the studio first attempted to justify its decision to retain NFTs but later withdrew the statement.
The updated statement reads, “Based on the criticism we got, we’ve decided to cancel everything NFT-related in S.T.A.L.K.E.R. 2.” “The team’s first objective is to serve the needs of its fans and players. Whatever the cost, we’re producing this game for your enjoyment. We care if you care, too.”
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Games that use blockchain technology or let users exchange NFTs or cryptocurrencies won’t be allowed on Steam, according to a rule added to Valve’s “What you shouldn’t publish on Steam” list. The decision to prohibit NFTs and cryptocurrencies from Steam hasn’t been addressed by Valve, although it doesn’t seem to be related to any of the recent blockchain-related scandals or controversies: NFTs have been used to steal artwork made for other games, to defraud individuals out of millions of dollars in return for what amounts to a JPG receipt, and they have caused art intended for other games to be stolen. The environmental impact of blockchain ledgers is still a contentious topic.
Factors limiting adoption of blockchain games
To be clear, huge blockchains need a tremendous amount of energy. The total yearly energy consumption of Bitcoin and Ethereum (before the Ethereum merger in September 2022) was about 317 TWh.) Because of how much energy Bitcoin consumes, the University of Cambridge even developed a Bitcoin Electricity Consumption Index that displays the data in a variety of interesting ways. And if NFTs rely on this infrastructure, it’s not unreasonable to assume that they would have a massive impact on the environment.
Possible solutions
The good news is Etheruem(The second biggest blockchain where most NFTs are minted) officially migrated to PoS consensus on September 14, 2022. The numbers are still coming in, but Ethereum developers and independent experts expect the blockchain’s energy consumption to drop by at least a staggering 99.95 percent.
Therefore, to claim that blockchain is an environmental catastrophe is to disregard the fact that those systems’ flaws are already changing. It disregards the reality that the teams responsible for these systems are already putting a lot of effort into making changes. Can the same be true for other sectors of the economy? Again, this does not imply that the environment is unaffected or harmless by blockchain and NFTs. However, it raises doubts about the validity of the severe criticisms leveled against them, especially compared to the fact that their energy use is lower than the energy needs of the world’s data centers like Apple, Google, and Amazon.
Ethereum is frequently brought up in this discussion since it is the most widely used blockchain in the world for NFTs. However, it is by no means the only blockchain that enables NFTs. Solana enables NFTs. Its distinctive proof-of-history (PoH) and proof-of-stake (PoS) consensus processes result in significantly shorter validation periods and use of less energy. A wide range of well-known NFT markets, like Magic Eden and Solanart, are also supported on the blockchain. The Tezos blockchain may be an even greener choice if you’re looking for one. Beginning in 2021, Tezos gained popularity thanks to its Liquid Proof-of-Stake (LPoS) algorithm, which consumes around two million times less energy than Ethereum (pre-merge). Rarible is one of the most well-known NFT marketplaces on Tezos and it also permits NFT development.
Following the $615 million theft of the well-known blockchain game Axie Infinity, cryptocurrency was once again in the news for being a risky, hackable sector. There is no question that the developing DeFi business should prioritize security, just like any other industry. To put things in perspective, though, is crucial. Heists and hacks are not just a crypto phenomenon. They are quite prevalent in many other businesses. In comparison to the banking sector, DeFi, which began around three years ago, is still relatively young. The “mature” banking sector was, and still is, vulnerable to significant thefts and breaches. Several examples come to mind: Between 2015 and 2017, there were a constant stream of attacks on the SWIFT system. These hacking attempts included one on the Bangladesh Central Bank for about $1 billion, another on the Union Bank of India for $170 million, and one on Bancomext Mexico for $110 million. These prominent instances, which each got significant international media coverage, resulted in the majority of the money being recovered.
Possible solutions
Similar to what we see in more established industries, security must be a component of a crypto company’s budget from the start. According to NTSEC, 6% to 14% of the total IT budget is presently allocated to cybersecurity in non-crypto companies. We would anticipate that this sum is considerably higher given the characteristics of cryptocurrencies and the extent of customer assets. These hacks are due to two types of errors: a weakness in the code (as was seen in the $600 million Polynetwork hack) or via social engineering (as was seen with SkyMavis).
Protocols should use testing, testing, and more testing to prevent code problems. Code audits for protocols should be performed by at least two auditors. By setting up bug bounty hunts, where a protocol urges highly trained community members or hackers to find security flaws while compensating them proportionately, businesses can also use their communities. Protocols might also be used with bug-hunting businesses like Immunefi. Employee awareness raising and training are essential for protecting against social engineering and phishing. The crypto sector should make the completion of basic cybersecurity training mandatory. This should involve regular online lessons and reminders that teach about data privacy and other types of social engineering. Remember: Human mistakes account for 95% of hacks.
The majority of blockchain games offer a poor user experience. Although AAA-level crypto games have the potential to evolve in the future, the majority of releases to date have focused on collectibles, digital trading card games, and decentralized finance (DeFi). Analyst Udi Wertheimer said that detractors of blockchain games typically focus on the lack of fun or a similar user experience compared to the traditional market.
“ayyy what are you doing tonight let’s play the new crypto game together!”
said no one ever
because crypto games aren’t fun
and also don’t exist
— udiverse (@udiWertheimer) August 2, 2022
Tokenomics and play-to-earn principles are mostly used in blockchain games, on the other hand. The game loop and the excitement experienced while playing the game are secondary to the cryptocurrency incentives. It is now an attachment to an economics model rather than a game.
Possible solutions
Games should refrain from adding monetary incentives to an activity that is intended to be organically gratifying. In a game like Call of Duty, defeating challenging opponents is satisfying since it takes a lot of skill. That experience will be ruined if a $0.50 reward is added to it. It wouldn’t be pleasant to play a FIFA video game competition with your buddies only to win $0.15. By accepting nothing in exchange, the emphasis is totally directed onto the gameplay experience and this improves the joy derived. From an economic perspective, paying $0.50 and making twice as much is a 100% return on investment; this seems to make perfect sense. However, using such a strategy is exactly where play-to-earn games go wrong.
Instead than beginning with economics or adding cryptocurrency randomly to an existing game loop, blockchain game developers should focus on making games that players want to play. A play-to-earn feature has the potential to ruin the retention of even the best games with high retention rates.
This post was first made on The Daily Journal by Desiire Nhabii.