When blockchain technology first emerged, it was mainly perceived as an innovation with major implications for the financial industry. While this has definitely been the case, it’s worth noting that the impact of blockchain is seen in other sectors as well, such as gaming, which has been reaping tremendous benefits in recent years from incorporating this technology into the ecosystem. The gaming scene has evolved considerably and is not a one-size-fits-all experience anymore. The truth is that most people who embraced the blockchain gaming revolution are crypto enthusiasts who are already interested in Ethereum and firmly believe in the potential of these technologies. This isn’t, however, the case for the larger traditional gaming community, which hasn’t yet turned to blockchain and cryptocurrencies.
Despite the resistance some people show, centralized control and limited ownership are quickly becoming a thing of the past, with blockchain creating a revolution that isn’t like anything else ever encountered. This technology has played a major role in reimagining classic games, transforming how players engage with games, earn in virtual landscapes, and make connections. The blockchain gaming market accounted for 4.38 billion in 2022 alone, but forecasts show that this number will only continue to grow. Undoubtedly, blockchain has captivated many players by offering the opportunity to acquire in-game assets that can further be exchanged for monetary value.
Blockchain creates new opportunities for player engagement and retention
A report from 2023 has highlighted a low retention rate, particularly for mobile games, which is associated with a lack of meaningful rewards and content saturation. However, blockchain technology transforms these challenges by introducing player-driven economies, true digital ownership, and innovative reward systems. In traditional games, players spend money to acquire in-game assets like characters, weapons, and skins, but unfortunately, these assets lack real-world value, and they are often confident in a unique game.
On the other hand, blockchain enables true digital ownership and gives players control over digital assets, which can be used across various games, sold or traded, based on players’ preferences/. This creates a sense of investment and real-world value, and according to the data, it boosts player retention considerably – a 2022 report has found that games that integrate NFT experience a 200% increase in player retention.
By creating decentralized economies within games, blockchain enhances players’ engagement. It’s worth noting that traditional games have centralized economies, which developers control. This means that only the game creators can manage in-game assets and currencies, which limits player engagement as it decreases their role in the economic system. However, blockchain introduced the concept of decentralized economies, enabling players to control exchange and creation and manage their in-game assets through gameplay. This player-driven economy creates an engaging and dynamic experience for players, giving them a greater sense of investment and agency. For instance, in Axie Infinity – one of the most popular blockchain-based games- players can trade, breed, and battle virtual creatures named Axies and earn tokens while playing, which they can further exchange for real-world currency. The game’s tremendous success has shown that decentralized economies can massively enhance the engagement of players, as in 2023, Axie Infinity boasted more than 2.5 million daily active users.
Blockchain offers real-world applications in the gaming landscape
One of the most appealing things about blockchain is that, unlike traditional games, which don’t allow players to transfer in-game assets or use them in the real world, blockchain offers reward systems that enhance players’ motivation. More specifically, the technology introduces the concept of tokenized rewards, meaning that players can earn NFTs or crypto for their achievements in the game. These rewards can be used in the real world – players can either sell or trade them outside the game- which boosts player engagement considerably.
Who wouldn’t want to have fun while also being able to generate passive income? That’s precisely what blockchain gaming can offer players, and it’s exciting to even think of it. The emergence of crypto and Web3 gaming has created a world filled with opportunities for players and developers alike. By creating an immersive experience for players and offering them incredible rewards, they can ensure high retention levels and engagement, which ultimately translates into the long-term success of play-to-earn platforms.
Despite the opportunities it provides, blockchain technology poses some limitations
It’s clear that blockchain has numerous benefits for the gaming landscape, but as with any other technology, it isn’t perfect. First and foremost, blockchain gaming can be complex because players must set up a crypto wallet and purchase a certain amount of crypto, which can be daunting for many. Furthermore, using cryptocurrencies is challenging because regulatory bodies are trying to figure out how they work and whether using them in blockchain gaming is a good idea.
And let’s not forget that the blockchain gaming industry is incredibly competitive, as new platforms and games are always released, and as a result, it is challenging for blockchain-based games to keep up the pace with traditional ones. However, these challenges don’t make blockchain any less valuable in gaming, and the future looks bright regarding its potential in this sector. As more and more businesses explore this fascinating technology, more platforms and games will likely incorporate blockchain in the future.
The bottom line
Undoubtedly, blockchain technology is changing gaming as it was once known, blurring the lines between financial opportunities and entertainment. By focusing on community, player ownership, and innovative play-to-earn models, this innovative technology provides a glimpse into a future where players are more than just participants – they are stakeholders in the activity they are very passionate about. Despite the challenges, rising adoption rates and the influx of investment in this sector showcase the industry’s immense potential.
There will likely be a shift in how games are developed in the future, with a noticeable focus on ensuring long-term value for players. The integration of the blockchain into the gaming landscape will likely result in the development of game genres that weren’t once thought possible. For instance, it could be possible for players to earn a living through gameplay, which would completely transform the gaming industry.
