Blockchain and the Gaming Industry

Blockchain and the Gaming Industry

Naveen Joshi 29/08/2018 4

The gaming industry has constantly faced problems of piracy, duplication of in-game assets, and unjust revenue sharing. Blockchain holds the potential to overcome these challenges by redefining the gaming industry, making developers, distributors, as well as the players happy.

Although the gaming industry is evolving and achieving continued growth, the problems faced by the industry have remained the same. The global gaming industry, estimated to exceed $143 billion in market size by 2020, continues to face issues with digital rights management (DRM), digital asset ownership, and revenue sharing, among several other issues. The blockchain technology, with its ability to reliably manage digital ledgers and execute smart contracts, can eliminate most of these issues, which arise due to lack of transparency and unauthorized manipulation of information. Indicated by its ever-increasing penetration of the sector, blockchain will eventually redefine the gaming industry by not only changing the way games are played but also the way they are made.

How Blockchain will Redefine the Gaming Industry

Following are few ways in which the incorporation of blockchain can benefit, and eventually redefine the gaming industry:

Controlling Online Piracy

Although the distribution of games via physical discs and cards is still common, digital purchases and downloads of original games witnessed a rapid increase too. Besides, even the games purchased as discs need online registration and validation. This mode of distribution, although more convenient, involves some risks, mainly around digital rights management. Piracy has been a major concern for the gaming industry, which hasn’t been curbed regardless of the different measures implemented by the creators and distributors. Conventional methods of protecting the purchased content, such as CD-keys, have been far from successful in controlling the illegitimate use of games. Online DRM systems require users to be logged in and stay online constantly, which has led to the dissatisfaction of gamers, making it a suboptimal solution. These systems have had limited success in controlling the usage of a single licensed product by multiple individuals. Blockchain is viewed as a cure for piracy and can be used by game manufacturers and distributors to license software to customers without worrying about inauthentic usage and illicit distribution. This is achieved by storing the user license on a blockchain, which lists the product ID and the corresponding user ID. This immutable, transparent list ensures that a product registered to a customer cannot be used by another individual. Leading the race to implement blockchain in securing product ownership, Sony has filed a patent for blockchain based DRM for its games.

Ensuring Fairer Revenue Sharing

Like any other form of entertainment, games are usually created and distributed by different set of people. Games have been distributed through centralized platforms such as Steam, which in exchange of giving independent game developers a wide market exposure, get a considerable proportion of profits from game sales. The profits is sometimes as high as 30% of the revenue earned. This unfair sharing of revenue can be minimized with the use of blockchain based platforms that ensure the developers get paid more fairly by eliminating centralized intermediaries. An example of blockchain-based game distribution platforms is GameCredits, which offers developers a fairer distribution channel and allows them to keep 90% of the earnings.

Managing Asset Ownership

Most modern online games include in-game assets that can be purchased, traded, and sold by the players for real money. Sometimes, players invest more on in-game purchases than on purchasing the actual game, making in-game sales a major share of the overall game industry revenue. Statista projects in-game consumer spending to reach $32 billion by 2020. Since in-game assets are nothing more than lines of code, they can be easily manipulated and duplicated, creating losses for players who invest real money in them. A blockchain based system will not only establish undeniable ownership of assets but will also enable easy and quick trading of these assets between users. DMarket is a blockchain-based virtual asset trading platform that allows gamers to trade in-game assets, even those coming from different games, between players.

These are just few of the many ways in which the use of blockchain is beginning to revolutionize the gaming industry. To make the most of this technology, developers should create games that have in-built compatibility with blockchain technology and platforms. Distributors can profit by investing in platforms enabled by blockchain to attract independent developers and buyers seeking fairness, reliability, and convenience.

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  • Victoria Teichner

    Yes, I get it blockchain will change several industries but it won't change the video game addiction problems.

  • Liam Henry

    Piracy is difficult to control. Blockchain is an exciting technology with its own issues.

  • Oliver Daniels

    There are already crypto-based games. Blockchain's decentralisation makes true ownership possible.

  • Glenn Bowden

    This is a clever and realistic implementation.

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Naveen Joshi

Tech Expert

Naveen is the Founder and CEO of Allerin, a software solutions provider that delivers innovative and agile solutions that enable to automate, inspire and impress. He is a seasoned professional with more than 20 years of experience, with extensive experience in customizing open source products for cost optimizations of large scale IT deployment. He is currently working on Internet of Things solutions with Big Data Analytics. Naveen completed his programming qualifications in various Indian institutes.

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