How Do Blockchain and Games Work?

With the development of the times, people’s attitudes towards games are also changing, from the initial “doing nothing, playing with things and losing one’s mind” to gradually accepting and even becoming a profession.

Now, the game is gradually developing in the direction of universalization and e-sports. According to statistics, the output value of the global game industry in 2018 exceeded 150 billion US dollars, exceeding the sum of the film and music industries.

Faced with the increasing demand of the market, many smart entrepreneurs want to get a share. However, the game industry has high requirements for capital and technology, and coupled with increasingly strict approval policies, so it is not friendly to ordinary entrepreneurs.

Now, the introduction of blockchain technology has made it possible for game entrepreneurs to break through the barriers of the traditional game industry.

What are the pain points in the traditional game industry?

The unbalanced distribution of interests between the upstream and downstream of the industry chain The quality of a game mainly depends on the content developed by the game R&D team and the services operated by the publisher.

However, the profits that the development team and publishers can obtain are very limited, and nearly 50% of the revenue from the game goes to the channel dealers and settlement channels. This undoubtedly raises the entry barrier for game developers, and also increases the purchase cost for ordinary players.

Information asymmetry between developers and publishers On the one hand, small and medium-sized CPs cannot improve the quality of games due to financial or technical constraints, and it is difficult to realize good ideas; on the other hand, publishers struggle to find good games.

There is no place to find if you break through the iron shoes. Unreasonable resource allocation makes large game companies stronger and stronger, while small and medium-sized companies face the danger of bankruptcy.

The repayment period is too long. It takes at least 4 months from the recharge of the game player to the receipt of the payment by the publisher. In more cases, it takes half a year or even longer. In addition, the development time of good games is as long as 1-2 years. This makes the payback period of a game project too long, and the efficiency of capital utilization is low.

There are tens of thousands of games in the traditional game market, and the tokens of these games are also different. The recharge and purchased assets in the game cannot be used universally, which often causes waste. It also makes it difficult for game users to switch twice. Users of one game switch to another game, especially games from different developers.

So, how can the introduction of blockchain change the game? Next, we will explain it from the perspectives of game developers and ordinary players.

For developers

Financing is simpler and faster Blockchain technology makes it possible to operate game projects independently without management, and specific rules are often disclosed in the form of open-source code.

Institutions or individuals can freely purchase tokens (tokens) of game companies without being restricted by traditional financing models such as geography and shares. General investors can choose to hold tokens and get the same benefits as shareholders in the traditional model, while gamers can choose to use them to purchase game services.

This model directly avoids excessive service fees for channel providers and small and medium-sized CP financing Difficult, slow payment problems.

Game Marketing is Easier In the traditional game industry, there are two ways to acquire users after a new game is released. These two methods require a lot of investment and the controllability of the user conversion rate is not high.

There are even more ways for blockchain games to acquire users. Since all players are token holders, the developer can design it this way: all old game players can directly get rewards in the new game, such as skins, props, etc., and the verification method only needs to log in with the address to read the data on the chain.

In this way, all the previous games of the developer can quickly attract traffic for the new game. So, how does a developer acquire users for their first game? You only need to airdrop your own token to holders of mainstream tokens, and you can acquire a large number of users at a very low cost.

For gamers

Assets can be traded anytime, anywhere Most of the props in traditional games do not have trading functions, while the “props on chain + mobile wallet” in blockchain games can realize transactions between two players anytime and anywhere.

This transaction between assets is not limited to the same game, as long as players reach a consensus on the behavior of exchanging items, it can also be carried out between different items in different games. Moreover, this transaction can also be in batches.

The game mechanism is more transparent. Players of blockchain games can view the game rules hidden in the centralized server in the past. You can clearly know the probability of opening a certain treasure box and whether a certain rare item or character is really rare.

In the case of traditional game source code black boxes, this information is completely in the hands of game operators. But in the world of blockchain games, all game rules are open and transparent.

Fewer cheats in the game. Plug-ins have caused extremely poor game experience for players and increased the workload of developers. On the chain, cheating behavior can be traced at any time.

Every game player as a node has the right to sanction cheating, and any node has the right to directly vote for a certain player. When an account is identified as cheating by most players, the system will automatically punish it. If the cost of cheating is high, the behavior will naturally decrease.

The game industry has always been considered to be the fastest field and an important tipping point for the blockchain to land. At present, it has become a track for many major manufacturers to compete for layout. But it is an indisputable fact that there are currently no phenomenal products that can compete with traditional games in blockchain games. 

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Puneet Kantiwal

Puneet Kantiwal is an experienced professional in the field of blockchain and cryptocurrency technology. With a strong background in computer science and programming, Puneet Kantiwal has been involved in the crypto space since its early days. He has worked on various projects related to blockchain technology, including the development of smart contracts, decentralized applications, and blockchain-based platforms.

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