Anyone who has ever played a video game is accustomed to some form of digital currency. After all, you grind Septims in Skyrim, Crowns in The Witcher III: Wild Hunt, and Credits in Mass Effect to afford the better in-game gear. While these currencies act like fiat in their respective games, the truth that they’re digital currencies is undeniable.
However, we live in a world of NFTs and Cryptocurrencies, so how do these overlapping currencies coexist? In-game purchases are a standard industry practice, so what about using real currencies to make in-game purchases?
Where is the intersection of cryptocurrency and gaming, and what is the future potential of this coexistence? Read more to find out!
In-game rewards
Many games, especially mobile games, heavily rely on in-game currency. Now, using fiat currency for these purchases is not a common practice. Instead, the in-game currency system is used. Instead of linking these in-game rewards directly to their account, people purchase set quantities of in-game currencies and use them in-game.
So far, so good.
Still, does it have to be this way?
Of course not!
Cryptocurrencies are an amazing substitute and help avoid several steps in this process. This way, players can use crypto as a direct in-game currency, thus facilitating the process.
Now, this method has its challenges. First of all, crypto is incredibly volatile. It will be incredibly difficult for the game to set fixed costs for items and in-game rewards.
The solution to this method is simple – dynamic in-game economy. The way this works is both simple and completely brilliant. A lot of multiplayer games have player-impacted economies. This will only take matters a step further.
Think about it, some of the world’s biggest games have millions, even tens of millions of players. Minecraft, for instance, has 140 million active players monthly.
With such numbers, players can affect the in-game economy and the real-world economy. For the crypto world, this might facilitate the adoption of numerous cryptocurrencies and tokens.
Gaming coins
Previously, we’ve mentioned that some games may have their economy. After all, with millions of players grinding in the same environment and trading among themselves, an economy will spawn entirely organically.
Games like Path of Exile used the exchange system. There was no in-game currency, and players could only exchange items. This model worked well and eerily reminded us of trade in some of the earliest human societies. However, we live in a digital world, and it wasn’t long until the crypto world saw its opportunity to step in and step up.
Now, why wasn’t this sufficient in the long run?
Wherever there’s value, there’s trade and profit. Video game value is not just contained in in-game rewards. For instance, you had people who made a living grinding gold in World of Warcraft and selling it for fiat currency online.
Some people pay for video game coaching or even pay people to fill in for a role in their raid. Not to mention Diablo III auctions and its insane economy.
This is what brought about the rise in the popularity of gaming coins. These cryptocurrencies are specifically designed to be used for in-game transactions between players. These coins operate on Bitcoin technology, which allows instant, low-fee, secure, and transparent methods of transactions between players.
All that gaming coins did was legitimize and facilitate these economic processes (that were already taking place). They didn’t add or invent anything new in the world of gaming. They just seized a lucrative opportunity and offered everyone involved a massive quality of life improvement.
In the future, developers will do well to consider the potential of gaming coins from the start.
Crowdfunding for game development
One of the most highly anticipated games in history, Star Citizen, has managed to gather almost $543 million on Kickstarter. Currently, it is the world’s second highest-funded crowdfunding project in history. The first is Ethereum’s EOS project, with over $4.1 billion.
There are two things that we can conclude from the previous passage. First, there’s incredible crowdfunding potential in video games. Second, cryptocurrency is already used as a platform for the largest crowdfunding project in human history.
It probably won’t be long until these two ideas are merged.
Then, you also have a new phenomenon, Patreon-funded games. Some developers offer a v0.02 of their game as a demo and upload it on their Patreon. Then, they pledge to continue making the game if they get enough patrons. This way, instead of receiving funds for a game purchase (people buying games on Steam, GOG, Epic, etc.), they turn this into revenue.
Patrons get early access to content and more regular developer diaries, and the developer gets their monthly income.
These platforms take a fee, which can sometimes be quite substantial. This is why starting your crowdfunding project and receiving crypto is far more cost-efficient. This way, the fees are minimal, the transfer is instant, and your patrons remain anonymous. Anonymity is especially important for some patrons of adult games.
Integration of play-to-earn trend
While everyone has heard about pay-to-play games, not many people are familiar with the play-to-earn trend. Some games offer rewards in tokens or NFT, which can be earned as in-game rewards but have real-world value. This way, you can sell them for fiat currency or use them to buy other crypto.
Sure, some of these games are pretty rudimentary. Imagine playing games like Cookie Clicker, Flappy Bird, or Travian in order to win valuable rewards. While they are fun on their own, real-life rewards just further incentivize you to play.
Previously, we’ve already talked about how grinding in games like WoW and Diablo III could pay off. This way, the line between video game grind and real-life grind gets even blurrier.
All of this also perfectly coincides with the dawn of the Metaverse. With crypto payments and immersive 3D virtual space integration, the future of gaming (and entertainment) will become completely digital.
Decentralized gaming platforms
One of the biggest concerns with the future of gaming is the idea that massive gaming studios and gaming platforms hold too much power. At one point in time, Steam was even accused of monopolizing the gaming market.
There’s a huge discrepancy in power and the actual quality/popularity of games they produce when it comes to AAA studios and indie developers,.
The best example is Minecraft, which started as an indie game but it’s currently the most played game in the world. The same goes for titles like Stardew Valley and Rocket League.
With the help of crypto, gaming platforms could be decentralized. This would make them more egalitarian, giving smaller developers a bigger chance to break into the market.
We would have to encounter the next big crypto boom for this to happen. So far, 2023 doesn’t look so promising.
NFT representation of in-game items
Finally, you could use NFT as a representation of in-game currencies. The ownership of the NFT would represent the ownership of in-game items. This way, you could trade these NFTs on independent markets and use this “key” to translate ownership into the digital world.
One such example can be seen in the game Axie Infinity. This token-based online game uses an in-game economy with Etherium-based cryptocurrencies. In a way, this is a real-life example of most of our talking points.
The veil between gaming and crypto is getting thinner by the hour
The number of applications of crypto in gaming is too numerous to count. All multiplayer games eventually develop some sort of internal economy, and this economy often leaks into the physical world. All that crypto will do is make this simpler and more accessible. Through this, it will also enable simpler crypto adaptation among the gaming community.
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