Why the future of gaming is built on blockchain

June 15, 2023

Use cases

Written by: Algorand Foundation

Blockchain is changing the way we game – from play and earn to asset trading and community governance, gaming is more multifaceted than ever before. Yet, blockchain technology isn't trying to undermine the joy and essence of gaming but rather enhance the gaming experience with greater player freedom, rewards for gaming efforts, and player-driven decision-making. TechCrunch puts it like this: “The overarching vision for web3 gaming is to empower players with more control, reward them in proportion to the value they contribute and to lower the bar so that it’s not just the top 0.1% of players who can make a living through gaming.” Blockchain looks to bring about fairness and transparency, true ownership of in-game assets, and democracy to gaming communities. It aims to improve upon an already remarkable playing experience and provide the next generation of gaming. 

Provable fairness and transparency

Blockchain technology enables provable fairness in gaming by leveraging its inherent strengths.  Take the example of a tournament: the rules of the game can be established on-chain, along with information about the entrants and a smart contract can self-execute to deliver rewards to the tournament winner. Many types of data can be recorded on-chain, such as World Chess recording game and ranking information on the Algorand blockchain, where anyone can access it. Thanks to its transparency, a public blockchain can also give insight into other players’ gaming activities and the in-game assets that they hold. This can lower the risk of cheating and fraudulent playing. What’s more, decentralized digital identities built on blockchain can enable players to build identities and reputations in the community, bringing a new level of trust to gaming. 

True ownership of in-game assets

Blockchain can enable true ownership of in-game assets, which gives gamers and collectors greater control and freedom. While it’s possible to buy in-game assets from traditional gaming companies, you never truly own the assets. If the gaming company closed down or you were banned from the game, you would likely lose those assets. The blockchain-based assets, typically in the form of fungible and non-fungible tokens, can be transferred out of the game to a crypto wallet or potentially used in another game. Aegir Tactics is a digital card game, where each card is an NFT that can be collected, used in gameplay and traded. Players have true ownership of all its in-game collectibles that can be stored in a wallet.

A decentralized in-game economy 

In online gaming, players often acquire various assets such as characters, weapons, skins, and vehicles to enhance their gaming experience and gain an advantage over others. To facilitate the buying, selling, and trading of these assets, a marketplace is essential. Blockchain unlocks the opportunity for a decentralized in-game economy, where players can use cryptocurrency or a game’s native token to purchase assets. This further gives way for game developers to implement reward systems, engage in competitive gaming, and utilize staking mechanisms to earn more tokens. 

Earning through play 

Being rewarded for gaming efforts isn’t a new concept but the major difference is that blockchain gaming proposes being able to earn rewards that can be either used in the game or exchanged for real-world value. This not only incentivizes players to invest more time and effort into gaming but also opens up new opportunities for individuals to earn income through gaming-related activities. Zone has built a comprehensive PlayFi ecosystem that merges P2E, yield farming, and NFT collectibles on Algorand. Fracctal Monsters is a P2E monster-taming game that closely resembles the 90's game Tamagotchi, where players earn rewards for pet care and battling. The Fracctal Monsters are stored on the Algorand blockchain and in-game assets can be kept in your Algorand wallet. 

Removing the barriers of entry

Many P2E games require users to have a couple of things set up ahead of time, such as a wallet, tokens, or NFTs. This can be easy for crypto native gamers but harder and more time-consuming for those new to the blockchain space. Cosmic Champs is a free-to-play, mobile-first strategy game that aims to be accessible to a wide audience by allowing users to just sign up and play. Set in a retro-future, players compete in online battle arenas in a tower-rush format, with the potential to earn tokens through gameplay.

Community and governance 

Gaming has a natural ability to unite communities for gameplay discussion, collaboration, trading opportunities, and general socializing. Vibrant gaming communities are also a hotspot for gaming feedback. Blockchain can allow players to be more involved in the direction of gaming platforms than ever before. By implementing a DAO (decentralized autonomous organization) structure, communities can be involved more deeply in gaming operations, fundraising, and the future direction of the platform. Players can be incentivized to take part in platform governance through rewards such as in-game assets and tokens. This in turn fosters active participation and community engagement. Gunny Games, a competitive NFT game built on Algorand, is working towards this structure. 

Making a positive environmental impact

As demonstrated, there’s more to blockchain gaming than earning, such as bringing about positive environmental change and promoting sustainability. An example of this is a “play-to-plant” program: when players engage in specific games or reach certain milestones, real-world actions can be triggered like planting trees. These actions, which form the premise of Everforest, a game developed by Carbon Counts, aim to mitigate climate change by promoting tree planting in the real world. It operates by allowing users to purchase in-game currency that is then used to plant real trees in various locations around the world.

Blockchain technology aims to enhance the gaming experience, providing greater player freedom and rewards for gaming efforts, while maintaining the joy and essence of gaming. With the gaming industry valued at $4.83 billion in 2022 and predicted to grow at a compound annual growth rate (CAGR) of 68.3% from 2023 to 2030, blockchain is expected to play a major part in its future. 

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5 Ways Blockchain Is Transforming the Music Industry

How Blockchain Is Disrupting the Real Estate Industry

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