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Application of Blockchain in the Online Gaming Industry

According to a report from China Audio and Video Association (GPC) and CNG New Game Research (Gamma Data), the number of players of Chinese games reached 626 million in 2018. Total online gaming market revenue reached ¥214.44 billion,accounting for 23.6% of the global gaming market. With the development of the Internet and increasing penetration of various electronic devices, the global gaming market still stands room for growth. However, the conventional game model is facing an increasingly deep separation but the rise of blockchain will completely reorganize the space.

Traditional games rely on centralized server operations and storage mechanisms, and below are the pain points of the model:

  1. The value is opaque and the rules are changed arbitrarily, which can cause distrust among users.
  2. Channels and distribution revenues are monopolized by giants while high-quality niche games are difficult to produce, with high development costs and low success rates.
  3. Players’ experience is affected by the fact that virtual assets do not belong to them and they cannot smoothly realize value circulation.
  4. Due to inflation within the gaming ecology, player’sinterests are not guaranteed, early users amass a large number of game coins, equipment depreciation in the middle and late stages of the game.
  5. In-game assets cannot be circulated between different games, which means that when the life cycle of a game ends, all the points are cleared, and the benefits of players are reduced.

The birth of Blockchain, Let the pain point of the traditional game have a solution and return the initiative of the game to the player user.

The code for blockchain games is written in a smart contract and runs on the blockchain, meaning the game chain is transparent and cannot be falsified. It greatly improves the traditional game rules and numerical opacity, black-box operation and other issues, making the game fair and trustworthy. In addition,the transparency of the game source code allows the gaming can still be running without existence of the gaming company. Game players rise from a passive unequal position to a position where players have the right to choose and communicate with the game developer at an equal position. The player rises from a passively accepted unequal position to the player’s ability to actively choose and engage in equal dialogue with the game developer.

Blockchain can help build communities around games and extend the life cycle of certain games.In the traditional game mode, the innovation relies entirely on the developer itself, and there are very few online games that continue to develop a copy and gameplay that satisfy the players. Due to the existence of blockchain and Token economic incentives, the community can use the game editor to innovate new gameplay or checkpoints according to their own needs. This entails the game’s main world in order to retain players’ interest. Decentraland, a game that is similar to the Oasis game in the “Ready Player One” movie, is a classic example of gaming communization, sub-globalization and UGC.

Virtualassets are issued through the asset issuance function of blockchain. The game coins, props and other items in the game become similar to real-life assets.Each virtual asset can be reduced to a unique token and stored in the encrypted blockchain account address of the player. The asset storage is safe, reliable,and ownership belongs to the game user. The virtual assets stored in the blockchain can also be traded in a trusted environment in the form of smart contracts, and all transaction history can be stored, traced and viewed. We take a Dapp game which is driven by virtual asset transaction mode as an example. According to Rare Bits data, the number of transactions occurring within 7 days of the encrypted cat Dapp is 2,614, and the transaction volume is about 100 ETH. The monthly flow is about USD 200,000, which is equivalent to more than CNY 1,000,000.

Due to the cross-application ledger feature of blockchain, the same IP asset can be reused and the games can be interconnected. The blockchain itself becomes a material library that can be called by developers at any time.

The blockchain solves the problems of lack of incentives, trust and in termediatecosts in the Internet, and pushes the community and consensus to the center. Thoug hblockchain can empower the video game industry from various angles, we still have not the wider application and promotion of blockchain games at present.Nevertheless, the industry has good development prospects.