The advent of blockchain has opened up new opportunities for games developers, but what is all the fuss about and what makes them different than existing game development?
Perhaps, you have heard of CryptoKitties, NimiPet or Decentraland, or maybe this is the first time you are reading about it. Either way, it is an opportunity you should be aware of, in case we see more companies adopting the blockchain for gaming.
Big Question
I have been following Decentraland recently (full disclosure: I own a small amount of the coins) and was discussing it in a recent interview, when the interviewer asked me "I don't get it, what value does it bring having it on the blockchain over a traditional centralized model?"
How's It Different?
It is different in two ways: Control and Profits
n a decentralized game, no single organization controls all the rules of the game and profits go to developers of the best content. A player votes with their time and money.
When a game is built by a company, the company can control all the aspects of the game including who can play it, the features, the rules, and the profits. Furthermore, the company can change any one or all of those aspects are their discretion. That may sound fine to many people, since the company paid for the development, but it can negatively impact players that have "invested" in the game through time and initial or in-game purchases. As a player you either accept the changes or leave the game.
A few years ago, I was playing a war game and the developers constantly changed the rules of the game by limiting operating areas and strategies, adjusting weapons performance and introducing new weapons. Each change would cause an uproar in the community, but increased developer profitability, in that it cost the player more money and time just to stay even. Those who have played any multi-player game know that you develop a sense of camaraderie with the other players and that makes it difficult to leave, so you stick around until it becomes more painful, experience or expense, to continue than to just quit.
CryptoScientist University
Let me provide a more detailed example. Lets imagine I decide that the game community would benefit from a virtual cryptocurrency university, so I purchase the "land" and start developing the features, rules, economy, courses and all other aspects that would benefit my students. When I purchased the land, no controlling organization would tell my what I can or cannot build or how much I can charge. It is all at my discretion. All of the profits I am able able to generate through courses or advertising are paid to me for my effort. Think about how this is different than the current revenue models on social platforms. All the user data and profits are owned by one company, generating enormous profits for them.
If my university is popular, I could even choose to issue my own currency that is used when you enter my area, but could also be exchanged when you leave for the "global" currency.
Numerous Options
I have essentially created a virtual island and so have hundreds of other people, giving players choices of how they want to invest their time and money. Some people may develop neighborhoods, resorts, nightclubs, shopping districts, amusement parks, other universities or whatever they can imagine.
If my university is widely popular, perhaps a real world college would want to purchase it. I can now sell it for any price that I choose and again the profit comes to me. In games controlled by a single company, the terms and conditions either limit or prohibits sales, so when you leave you also leave behind everything you purchased or earned along the way. This changes the economic model from a monopoly to one of competition.
Users
The question then becomes, if you can build your own popular university or whatever, why not just build the software you control, since that is what you are doing on your plot of land. The answer is user base. I would need to market to a niche audience or spend significant upfront investment to build hundreds of islands, hoping to attract and retain enough users to make a return. The decentralized model distributes the development cost and risks, but attracts a larger user base because of the wide variety of offering within a single platform.
Limitation of Decentralization
The three overarching negatives, based on the current state of development are scalability, content distribution, and security/usability.
Scalability
Blockchain scalability has caused platform issues affecting all users. When Cyptokitties was enormously popular, one selling for as much as $117,000 , the Ethereum blockchain experienced a six-fold increase in pending transaction, which impacted all owners of the currency, not just the gamers. This caused concerns that serious business opportunities where being crowded out by the gamers.
Decentralized Content Distribution
Content distribution through a P2P network has traditionally posed two primary issues: download speeds and availability. . Both of these issues, could negatively affect the users and the overall popularity of the game. As the technology continues to develop, it is expected that new solutions will solve these issues.
Easy to Use/Hard to Lose
In game wallets will need to be secure enough for gamers to hold private keys and authorize micropayments, yet easy enough for gamers, with a wide range of experiences, to understand and use.
Wrap-Up
Decentralized games built on the blockchain could change the game development industry in tremendous ways by rewarding gamers for their effort and developers for their content, but for that to happen, strides will need to made to mitigate the limitations. I think it wiil be an area to watch for new opportunities. In a future post, I will analyze the impact of decentralized games on blockchain security.
Let me know what you think about decentralized games and their future in the comments below.