Does Blockchain Herald The Dawn Of A New Era For Gaming?

Not so long ago, the video-game and cryptocurrency industries would have struck anyone as curious bedfellows. While the former was focused on entertainment, the latter sought to create a form of digital money to rival fiat. Where could the sectors possibly converge? 

Despite its enormous success at the time, CryptoKitties, the first popular release to utilize blockchain technology in late 2017, did not precipitate an immediate influx of games developers and creatives, with the burn being far more gradual. Partly, this was a result of negative press surrounding the congestion the game caused on the overburdened Ethereum network, which did not then enjoy the breathing room afforded by the now growing number of layer 2 scaling solutions.

The subsequent evolution of blockchain-based gaming, with its esoteric acronyms (P2E) and portmanteaus (GameFi), owed more to the DeFi dApps and non-fungible tokens that attracted a wealth of interest and investment during the bull run beginning in 2020.

A Gaming Gold Rush

Today crypto games are generating billions of dollars from transactions involving unique digital goods tokenized as NFTs, a thriving economy that has compelled some players to quit their jobs and make their living exploring metaverses and trading collectibles. As the saying goes, what a time to be alive.

While CryptoKitties was the first release to establish common ground between gaming and blockchain, later titles gave rise to play-to-earn, a progressive model that sought to overhaul the tired pay-to-play format. Play-to-earn aims to preserve the features players love, rich graphics, a compelling narrative, strong gameplay, while integrating new business models more typically associated with DeFi: staking, trading, lending, even tournaments offering payouts to top performers.

Splinterlands is one project that helped to lay the foundations for the P2E revolution. A strategic collectible card game built on the Hive blockchain, Splinterlands built a sizable user base largely through word of mouth. These days, it boasts over 800,000 registered users who compete for and trade NFTs, and commodities can also be acquired using the game’s native Dark Energy Crystals (DEC) currency.

“Once players experience asset ownership, they say verbatim ‘I’m never going to buy free-to-play games again.’ Why would you spend $500 in a game if you could buy $500 of assets in a game, earn with them, build a community, and sell for more later when you’re done playing?” says Splinterlands’ CEO and co-founder, Jesse “Aggroed” Reich, “Crypto is going to eat the world, and gaming will lead the way.”

Splinterlands has just seen massive success with its latest Chaos Legion card pack, selling more in the first night than 2018, 2019, and 2020 combined. In 2022, the team’s focus will be on its new validator node software which allows users to independently track and verify transactions involving SPS, Splinterlands’ governance token. Like many P2E ventures, the project is keen to put more power in the hands of community members who will get to submit and vote on proposals affecting the overall ecosystem.

If early P2E pioneers like Splinterlands and Axie Infinity proved that gaming and crypto were a match made in heaven. Subsequent projects have set about expanding the kingdom to accommodate their own digital curios and integrated marketplaces. Some have actually been operating in the shadows for years. Game studio EverdreamSoft, for instance, says it’s been “pioneering the integration and use of blockchain tools in the domain of gaming and digital collectibles” since as far back as 2014, when a forward-looking investor could buy a bitcoin for less than $400. 

“I thought play-to-earn would have an earlier but slower growth and slower but constant growth is healthier, in my opinion, than exponential moonshots,” says CEO Shaban Shaame, “In 2021, we experienced over-speculation on NFTs and P2E. People will be disappointed at some point and they will lose interest, but the market will continue to mature and people who are smart about it will experience great benefits. 

“The trajectory is very similar to the ICO bubble in 2017. After the 2018 crash, nobody in the mainstream media talked about cryptocurrency for a while yet the market continued to build up and value grew over time. The pandemic accelerated interest in these models, but their adoption is inevitable.”

EverdreamSoft’s best-known project is Spells of Genesis, which made history as the first blockchain-based mobile game when it launched in April, 2017, seven months before CryptoKitties. Like Splinterlands, this multi-chain trading card game compels users to collect and combine cards to make the strongest possible hand. Cards are then used to battle opponents, with an in-game currency (Gems) allowing users to acquire rarer NFTs and boost stamina. 

Spells of Genesis’ USP is blockchainization, a feature that allows users to transform their cards into standalone blockchain assets that can be traded outside the game itself. Of course, most modern games tokenize all assets for free trade from the get-go.

SDKs Are Changing the Landscape

Creating a blockchain-based game is, as you might expect, a technically challenging endeavor. Software Development Kits (SDKs) promise to simplify the process, providing a package of ready made tools that allow developers to bridge their applications to the Web3 ecosystem.

Stratis is perhaps the best-known supplier of SDKs, and through these toolkits the platform lowers the barriers to entry by making it easier for devs to build scalable game dApps in programming languages they understand like C++ for coding in the case of the Unreal game engine, C# for Unity. Both engines are completely free to use, though costs accrue when projects achieve success. Unreal, for example, is free until a game reaches $1,000,000 of gross revenue, whereafter it collects a 5 percent royalty fee on all in-game transactions and Unity offers several paid plans when a game crosses the $100,000 mark. 

Several developers and studios have utilized Unity and Unreal SDKs compliments of Stratis, availing themselves of artist friendly tools to fulfill their creative vision and monetize projects through the tokenization of in-game commodities. One upcoming project that bloomed from the Stratis/Unity/Unreal trifecta is Dawn of Ships, a P2E RPG wherein players captain their own vessel and earn tokens through piratic battle and exploration.

Stratis CEO Chris Trew is understandably bullish about the macro picture for blockchain gaming stating, “Although gamers don’t typically have much experience of owning their digital assets, this year will bring some positive case studies from AAA game developers. We believe many dedicated gamers will be airdropped NFT assets as a reward for their loyalty, and this strategy is likely to encourage acceptance and familiarity, with sentiment shifting positive as a result.” 

Interestingly, Stratis recently conducted a survey of 197 game developers across the U.S. and U.K., with 72 percent of respondents saying they could see themselves adopting NFTs or blockchain technologies in the future and 56 percent planning to do so in the next 12 months.

Unreal and Unity are not the only shows in town when it comes to SDKs.  Xaya, creators of the first ever blockchain game Huntercoin (2014), uses its own open-source SDK, Xaya X, to get devs up to speed. Developers more familiar with Unity and Unreal can also leverage Xaya’s technology to enhance their experiences. 

One of the platform’s latest P2E releases is Soccer Manager Elite, a multi-player that calls to mind Championship Manager. Gamers get to do more than pick the squad as they can operate as an agent, club owner, share trader or speculator, pitting their footballing acumen against people from around the world, and because players and clubs are fractionalized as NFTs, Soccer Manager Elite opens up a world of earning possibilities.

Those who enjoy soccer but don’t want the stress of calling the shots might prefer MonkeyBall, described as a cross between Final Fantasy and FIFA Street. Developed on Unity, the 4×4 arcade soccer game offers a range of earning opportunities whether you elect to play, buy a stadium and “host” matches, or even back the winning team.

Speaking of sports, leading esports organization Team Vitality recently partnered with the Tezos blockchain platform to “educate fans on the benefits of blockchain as part of the gaming experience.” Expect further tie-ins with e-sports leagues and collectives going forward.

Moonshots and Metaverses

Metaverse is the buzzword that has quickly become the talk of the town, not least since Facebook rebranded itself a “metaverse company” late last year. Crypto, Web3 and the Metaverse are apparently a big thing at Google who have just announced they are creating a blockchain group under the nascent “Google Labs” division. Labs is home to VR and augmented reality projects, like the “Project Starline” 3D video booth and Google’s AR goggles.

Metaverse projects like Decentraland, The Sandbox and Alien Worlds, combine social, economic and creative dimensions, pushing the envelope of play-to-earn by catering to a broad cross-section of players interested in different things like lending, trading, competing, conversing, building, renting. It’s Second Life on steroids, particularly given the advance of wearable AR/VR tech.

The success of these virtual worlds has caused their native tokens to moon. Decentraland’s MANA, for instance, surged by over 4,000 percent during the course of 2021. A parcel of virtual land in the online world, meanwhile, sold for a record $2.4 million back in November.

Despite the blockchain gaming industry growing by 765 percent in 2021, the sector is still young. Millions of millennial and Gen Z gamers have yet to sample play-to-earn, though the popularization of NFTs will continue pushing them in that direction, as will the growing involvement of major game publishers like Ubisoft. The company behind Assassin’s Creed recently announced plans to implement NFTs into its titles, starting with Tom Clancy’s Ghost Recon Breakpoint.

Microsoft just spent $68.7 billion acquiring video game company Activision Blizzard, bringing titles like Call of Duty, World of Warcraft and Overwatch. Tellingly, the company said the buy would “accelerate the growth in Microsoft’s gaming business across mobile, PC, console and cloud and provide building blocks for the metaverse.”

With “new entrants” to the Metaverse with deep pockets and big ambitions, the old gaming guard should acknowledge this paradigm shift. Embracing blockchain and understanding the power of decentralized governance and economic business models is a good start. It’s safe to say exploration is a common theme in GameFi, and it stands to reason that if your goal is to facilitate massive transaction volumes, you will want to create limitless horizons teeming with nifty collectibles.

Of course, if the gameplay itself isn’t strong, players won’t stick around. The challenge for developers is to design vast worlds that are both captivating and capitalistic. Players must enjoy completing quests and engaging in battles, while at the same time finding opportunities to earn a profit.