Most of my life, I was a gamer. I spent many years participating in tournaments (with games such as Counter Strike over a decade ago), and current franchise such as BattleField, Anthem, GTA and Red Dead.
Being an early adopter of blockchain technology as well, I was always curious about the connection between the two worlds.
Like many other trendy technologies, blockchain has gone from being a real tool to simply being a buzzword startups include in their pitches to attract funding. Part of that problem lies in a misunderstanding of what blockchain does.
More profoundly, only a few clear-cut use cases for the technology have emerged.
This is not for a lack of trying, though. Even though blockchain can deliver an improvement in terms of information transmission and data record-keeping, what many enterprises fail to realize is that in most cases, blockchain is simply superfluous. Nevertheless, blockchain does exhibit some potential when matched with the right industry.
Two areas where blockchain could have value for consumers and developers alike are gaming and esports.
In an official post published in January 2019, financial consulting corporate McKinsey & Company noted that despite all the noise surrounding blockchain, “the stuttering blockchain development path is not entirely surprising. It is an infant technology that is relatively unstable, expensive, and complex.” This is not to say blockchain is entirely useless, but rather that it can make the most impact when it is focused on sectors where it can be used effectively.
The gaming sector is often, by default, on the cutting edge of technology. From faster processing to better graphics and parallel CPU cores, video games provide an excellent testing environment for new solutions. The industry, which was valued at nearly $135 billion at the end of 2018, is in a state of flux as it transitions from the business of selling games as a product to that of selling games-as-a-service.
Games like EVE Online or World of Warcraft which have real, vibrant in-game economies are plagued by reports of developers manipulating the system, removing assets arbitrarily, and instances of hacks and other frauds. Building online marketplaces for these major communities that eschew the intermediary model and provide more transparent infrastructure is one of the biggest advantages of blockchain in the sector.
On the developer side, several projects have emerged that provide entire blockchain dev kits for video game makers looking to break into the industry. These platforms offer independent game devs and smaller studios the ability to make the games they like, keep the profits, and avoid meddling by publishers and bigger studios.
Even so, major studios like Ubisoft, Epic Games, Microsoft, and even Sony are exploring blockchain both for games and infrastructure. Ripple, one of the biggest names in crypto, recently announced the establishment of a $100 million fund to assist developers in making mainstream blockchain games.
While blockchain has a foot firmly planted in the gaming industry, it’s elsewhere in the sector where it could have its greatest impact. The Esports market has expanded at an explosive pace in the past few years, growing by 26.7% in 2018 to reach $897.2 million in revenue. With clear expectations that revenue figures will expand well beyond the $1 billion mark this year, there is an opportunity for blockchain to get in on the ground floor.
Instead of focusing on developers, however, esports blockchain platforms have prioritized building an ecosystem that supports every stakeholder in the market. Applications like VC-backed DreamTeam, launched by esports figure Alexander Kokhanovskyy, is trying to remove friction from several touchpoints in the esports chain, as a teambuilding and skill-growing platform.
“There has yet to be a use-case that has taken blockchain from obscurity, and pushed it to be used by millions,” says David Waroquier, a partner at leading VC firm Mangrove Capital and a DreamTeam investor, “and the massive growth in esports popularity, mixed with the fact gamers eagerly accept the newest technology, creates a blockchain storm.”
Indeed, esports seems ripe for disruption by blockchain. When put in the context of Ripple’s recently announced $100 million investment in gaming, the sector seems to be making a concerted push for legitimacy and usability. By embracing video games, the technology might actually start living up to its full potential.
That said, much like other industries that have put their hopes into the blockchain revolution, we will need to wait and see if the expectations meet the reality of mainstream adoption, as some claim cryptocurrencies and blockchain may not be that crucial for the gaming to evolve.
This story originally appeared in Forbes. Image courtesy of Shutterstock.