Last updated on July 5, 2022
The gaming industry has seen a strong shift towards tokenization recently. This conversion has been driven by the introduction of new titles, tokens, and development studios. There are many reasons why both developers and users would want to support more crypto in gaming. From providing more ROI opportunities to the introduction of special one-of-a-kind memorabilia, there are endless ways to integrate cryptocurrencies into gaming in 2022.
There Gaming Industry is Ready
Many people are surprised to learn that the gaming industry is one of the fastest-growing tech sectors in the world. According to reports, the Video Gaming Industry was estimated to be worth around $159.3 Billion in 2020. That number equaled a 9.3% increase from the year prior.
Notably, increased access to high-speed internet and the recent COVID-19 pandemic helped to drive the gaming industry’s profits to record heights. US gamers averaged 45% more time playing video games during the first week of the pandemic. Statistics also reveal that video game subscription services are on the rise, with 13.5% annual growth predicted this year.
The video game market is a booming industry that spans a massive demographic. Reports revealed that 79% of gamers in the US are adults. This rate is much higher than most people expected, as many people consider video games a child’s pastime. Interestingly, this is hardly the case, with 64% of US adults stating they play video games regularly. Analysts expect this number to continue to expand in 2022. They predict the video game market to surpass 3 billion active gamers by 2023.
Mobile Gaming Stats
Mobile gaming is responsible for over half of total gaming revenue nowadays. This sector has seen considerable growth. To put this expansion into perspective, you simply need to look at the last few years. In 2012, mobile gaming accounted for 18% of all revenue in the market. By 2018, that number had climbed to 59%. Today’s mobile gaming market is valued at over +$25 billion.
Both Sides Win
The benefits of integrating blockchain assets into gaming can’t be ignored. For development studios, they gain the ability to take payments directly without the need for third-party processors such as VISA. These services can add to the overall costs of gaming. Today’s pay-to-play titles are games that enable users to purchase gaming assets directly to improve their experience. These titles have seen a ton of growth, especially in the mobile gaming sector. Here, it’s common for games to be free, with in-game purchases fueling revenues.
Eliminating payment processors from the equation saves firms millions in processing fees and enables gaming studios to sell their products internationally in a peer-to-peer fashion. These middlemen add around 7% to the cost of gaming asset purchases. When you consider that the gaming industry is worth hundreds of billions, it’s easy to see that 7% is a non-sustainable rate for long-term growth. The added savings can be passed on to gamers, which results in better offerings and lower rates.
Developers can now relay real in-game value to users thanks to the introduction of blockchain assets into the gaming market. In the past, all a gamer could look forward to was some props from their friends and possibly their name on a leader board. Neither of these options provided gamers with long-term incentives. Today’s’ play to earn titles change everything.
Develops have figured out multiple ways to integrate real assets into their gaming titles. This capability enables them to connect to their fans in more ways and create new markets. Notably, you can take your digital assets and trade them on popular DEXs (decentralized exchanges) for other cryptocurrencies like Ethereum. Some titles skip this step by integrating cryptocurrencies directly into the game.
Imagine you were searching through a treasure hunting game and you came across a real Bitcoin. This funding isn’t locked in the game’s ecosystem. It’s immediately available for gamers to trade, HODL, or sell. Already, multiple titles provide users the opportunity to secure Satoshis for their in-game participation and actions. These titles bring the added benefit of not needing to utilize a third party to withdraw value from the game.
There is another reason why gaming studios continue to push for more play-to-earn gaming titles, the improved profitability. Studios can charge more for certain tokens and features when gamers know there is potential resale value. Additionally, the creation of gaming asset markets is a huge development for the entire industry. These markets help to drive value and improve liquidity for all P2E games.
Imagine you want buy a custom car for the hottest racing title on the market. You would be willing to pay more if you felt as if you could easily resell the item for more at a later date. The same goes for gamers that are early to the ecosystem. You may purchase a digital plot of real estate when a title first goes live with the understanding that the value of these properties will increase over time. Both gamers and studios enjoy these benefits.
More Immersive Titles
The main benefit of integrating crypto into gaming is the ability to make more immersive games. You can make games where people create or build up a digital asset over time. The time and effort they put into their assets, such as an avatar, could then be traded for other assets or sold directly for other cryptos. For role-playing games or other time-consuming titles, these assets have the potential to appreciate quickly.
NFTs Change the Game
One of the biggest developments in the blockchain P2E gaming sector was the integration of NFTs (non-fungible tokens) into the market. NFTs are not like regular cryptocurrencies in that they can be set up to represent unique assets. These tokens don’t derive value from their overall market cap. Instead, other factors play into their value assessment model.
An NFT may hold value because it’s used in a popular game, has special characteristics, is very scarce, or has an emotional connection to the owner. There’s also the history of ownership and the overall functionality of the NFT that helps to drive value. In the case of NFT gaming, scarcity and functionality are the prime factors used to determine value.
Some interesting NFT stats can help shed light on the current state of the market. For one, the NFT market is now worth more than $40 billion. Impressively, this growth represents a 131x improvement over previous years. Notably, in 2021, NFT sales hit $25 billion.
While art NFTs led the pack in terms of value, Gaming NFTs made up a large portion of high-cost token swaps. The average cost of an NFT is under $200, but there have been in-game NFTs that have sold for millions. Some of the titles that support these NFTs include Alien Worlds, Axie Infinity, and Splinterlands.
Game Relevant Tokens
One of the most popular ways to integrate NFTs into a gaming title is through the use of game-relevant tokens. These tokens hold value due to their value in a particular game. This category would include rare collectible weapons, vehicles, property, and more. Imagine a special car that you unlock only after a certain amount of gameplay. Since this asset is scarce and requires a lot of work to obtain, there is demand. Gamers can take this demand and convert it into profits. The main difference between game relevant and in-game NFTs is that the user has no way to increase the value of game relevant NFTs.
The Game that Changed Everything
Notably, Cryptokitties was the first title to use this style of NFT to great effect in the market. The title was so popular it created massive congestion when it launched in 2017. Cryptokitties wasn’t the first game to integrate cryptocurrencies, but it was the first to demonstrate the power of NFTs in this strategy. Today, the title is still a major hit with many of the original Cryptokitties worth hundreds of thousands of dollars.
Players buy kitty NFTs based on their cattributes. Twelve categories determine the overall scarcity of your kitty. Best of all, you can mate your Cryptokitties and get new cats that have a blend of their parent’s DNA. Notably, there are Cryptokitties worth over $100,000 currently.
Other Examples of Game-Relevant NFTs in Gaming
Alien Worlds is a more recent example of this style of NFT in use. The game operates as a futuristic NFT metaverse where users collect other-worldly items. There are six different levels of scarcity for the digital assets in Alien Worlds. Each has its value. Notably, Alien Worlds is one of the top-performing blockchain games in the market at this time.
Unlike Cryptokitties, you can also earn rewards by participating in the Planet DAOs (decentralized autonomous organizations). DAOs are a decentralized way to steer the direction of a project. They replace the core functionalities of a corporation with smart contracts. Users then vote to determine the best course of development moving forward.
Another popular version of NFTs used in games today are gameplay-driven NFTs. These tokens are easy to recognize because their value comes from the actions of the gamer, the popularity of the game, the token’s scarcity, and its overall usability. A perfect example of a game that integrates gameplay-driven NFTs is Cryptoblades.
Cryptoblades is an RPG where players traverse a vast digital landscape in search of monsters to battle. As part of the gameplay, you forge unique weapons in the form of game play-driven NFTs. Improve your weapons and score more tokens per kill. Then take your fine armaments and sell them in the marketplace. A gamer can convert their efforts directly into value by trading this asst for off-game options.
Another style of game that has seen more use is hybrid titles. These are games that blend the real and digital world in new ways. For example, the game Upland allows you to buy, sell, and trade virtual properties mapped to real-world addresses. You can create your very own digital real estate empire.
Users can flip properties for profit, and run a virtual business to earn UPX coins. Hold your properties as their value appreciates, or trade your real estate on the market to secure an ROI now. Notably, Upland is one of the few NFT titles that enable you to directly convert your rewards into USD.
Blockchain Gaming Studio
One of the most exciting developments to hit the gaming blockchain sector is the introduction of blockchain-based AAA gaming studios. Triple AAA games are the top-tier games in the market. Think of developers such as Ubisoft or EAsports. These games take years to develop and millions of dollars to create.
Recently, the gaming studio Quantum Works became the first to secure funding via a token sale. This Binance Smart Chain gaming development studio secured its seed funding goals of $1 million in less than a week. Now the platform seeks to specialize in blockchain-based gaming on par with today’s top titles.
Best of all, the decentralized nature of the project means that much of the profits are to be redirected back into the issuance of in-game tokens and rewards. Developers have already been quoted stating the average large in-game prizes will range between $10,000 – $50,000.
Blockchain Gaming – Win Crypto and Have Fun
It’s easy to see now why so many people want to see cryptocurrencies in the gaming sector. Gamers are eager to obtain real profit-generating opportunities, and gamers want to improve their bottom line. This combination of demands continues to fuel interest in these titles. The main thing to understand is that play-to-earn gaming enables users to finally get a piece of the pie. For these reasons, you may find that gaming could become a high-paying profession very soon.