The video game industry is rapidly evolving with new technologies like Blockchain Gaming, cryptocurrencies, NFTs, etc. This evolution is being led by innovative blockchain gaming companies that are building a new generation of games with unique features like true digital asset ownership, play-to-earn models, transparency, and interoperability.
What is Blockchain Gaming?
Blockchain gaming refers to video games that are built on blockchain technology and utilize cryptocurrencies, NFTs (non-fungible tokens), and other blockchain-based features. These games allow players to truly own in-game digital assets like characters, skins, weapons, etc as NFTs stored on the blockchain. Players can earn cryptocurrencies through skilled gameplay and trading of these digital assets. The transparent ledger also ensures fair gameplay and prevents fraud.
Blockchain Gaming Companies
Some of the key benefits of blockchain games are:
- True digital ownership of in-game assets
- The ability for players to earn real value through skilled gameplay
- Transparent and verifiable scarcity of digital assets
- Interoperability of assets across games and metaverse worlds
- New play-to-earn and ownership models
- Prevention of cheating through blockchain’s transparency
Top Blockchain Gaming Companies
Here are some of the top gaming companies leading innovation in blockchain gaming:
Sky Mavis – Axie Infinity
Sky Mavis from Vietnam has developed one of the most popular blockchain games, Axie Infinity. Players can breed, battle, and trade cute pets called Axies and earn income through skilled gameplay. The game has generated over $1.3 billion in revenue.
Hong Kong-based Animoca Brands has made over 300 investments in blockchain gaming startups. It has also developed many popular blockchain games like The Sandbox, REVV Racing, Tower of Fantasy etc. The company is valued at over $5 billion.
Los Angeles-based Mythical Games has raised $270 million to develop blockchain games that provide true ownership of game assets as NFTs. It is building a gaming ecosystem on its Mythical Platform.
Dapper Labs – CryptoKitties and NBA Top Shot
Dapper Labs from Canada has developed CryptoKitties, one of the first blockchain games enabling breeding and trading of digital cats. It has also developed the popular NFT-based NBA Top Shot game. The company is valued at over $7.5 billion.
Forte Platform has raised $725 million to develop a blockchain platform for game developers. It aims to bridge mainstream games with blockchain features.
Sorare – Global Fantasy Football Game
Sorare from France has built a popular fantasy football game on blockchain where users can collect officially licensed digital player cards and build teams. It has partnered with 175 sports organizations.
Benefits of Blockchain Games
Here are some of the major benefits that blockchain technology brings to video games:
True Digital Asset Ownership
Blockchain games like Axie Infinity allow players to truly own in-game digital assets like Axies as non-fungible tokens (NFTs). Players have control over these scarce digital assets instead of a central game studio.
Skilled players in games like Axie Infinity and The Sandbox can monetize their gaming time by earning cryptocurrencies and trading NFTs. This creates a play-to-earn model instead of just play-to-entertain.
The transparency of blockchain verifies the scarcity of digital assets like NFTs. Players can verify its rarity and value instead of just trusting the game studio.
Blockchain games like Blankos Block Party allow the portability of digital assets across different games and metaverse virtual worlds. This wasn’t possible before.
Transparency in Transactions
All transactions like trades are recorded transparently on the blockchain ledger. This prevents fraudulent activities like duplication of rare assets.
Decentralized blockchain games are collectively owned and managed by the community of users through DAOs (decentralized autonomous organizations)
Challenges Faced By Blockchain Gaming
While blockchain gaming shows immense potential, there are some challenges currently faced by the industry:
- Most blockchain games have complex onboarding and tedious learning processes. This affects adoption among mainstream audiences.
- Blockchain games are currently niche and not appealing enough for mass market appeal. Mainstream game studios can build more appealing games.
- The high volatility of cryptocurrencies and frequent changes in NFT valuations create uncertainty in earning potential.
- High blockchain fees like gas fees on the Ethereum network pose entry barriers for users.
- Lack of regulation in blockchain gaming and concerns over potential scams can limit institutional investment.
Future Growth Potential
According to market research firm Pitchbook, blockchain gaming transaction volume increased from $325 million in 2020 to nearly $2.3 billion in 2021. The industry is forecasted to grow at a CAGR of 70% till 2027.
Mainstream game studios like Ubisoft, Atari, and Square Enix are investing in blockchain games. Epic Games has partnered with Polygon to bring NFT features into Fortnite.
As the visual quality of blockchain games improves and earning potential stabilizes, blockchain games can reach their full entertainment potential in the coming years.
Blockchain gaming is bringing an evolution in the traditional video game industry by introducing features like true ownership of digital game assets, a play-to-earn model through skilled gameplay, transparency, interoperability and community-driven platforms.
Despite current challenges, blockchain gaming shows immense future growth potential as seen by the success of games like Axie Infinity and NBA Top Shot. As mainstream studios build compelling blockchain games, the industry can reach mass market adoption in the coming years. Leading blockchain gaming companies like Sky Mavis and Animoca Brands are at the forefront of this revolution.