Cryptocurrencies have changed the world. For the better or worse it is still up to the debate, however, it has introduced a multitude of ways of making revenue even in the undeveloped parts of the world. Apart from this, cryptocurrencies with their non-centralized market have evolved to the extent where international transactions do not have to go through banks. This means that there is a significant cut down in the time it takes for the transaction to be successful. What does this mean for different companies, and more importantly, what does this mean for the Video Gaming industry as a whole?
The popularity of microtransactions in the modern video games has created a new wave of gaming business models where companies develop a game, distribute it for free, and then have monetary gains through the micro-transactions inside of the software itself. A great example of this is Steam with its community market where different skins of different games are sold by gamers to gamers. This is not only limited to character or weapon skins though. Steam has an inner account leveling system done by collecting a specific set of cards for each game. After the user has some amount they just forge a badge and their account is leveled up meaning that the customer now can have more friends in their friend list, have awesome backgrounds for their profile page and other things to showcase.
Steam was one of the first platforms to start accepting the cryptocurrency Bitcoin into its environment. However, this was cut short due to the high fees and volatility of the currency. Unfortunately for Valve, the developer and the company owning Steam, they introduced the bitcoin payments back in 2017, when the prices have skyrocketed to huge amounts thus making the virtual currency much less attractive to the users than it was previously thought. The volatility was not an issue as it was more or less accounted for the extreme amount of it did draw the line though. When it was first introduced the Bitcoin cost around $450 with it hitting $30,000 after a while.
It is interesting that the strategy can still be used to this day since the market has matured a lot in this time with volatility decreasing and now us having such cryptocurrencies as Ripple which costs much less for the user to use.
However, it can still be utilized in the video gaming market. In fact, some of the industries dealing with online gaming like online casinos have been implementing cryptocurrencies as one of their deposit options. Although, governments are dissatisfied with this move since a lot of them do not view digital currencies as “real currencies,” thus being unable to tax them. Plus, cryptos bring in the anonymity to the user masking their identity and giving citizens the ability to partake in the activities which may be outlawed. For example, in South Korea, online gambling is strictly forbidden. Even in the face of this restriction though, South Koreans are able to avoid these by utilizing darknet to acquire cryptocurrencies, using them to deposit money into foreign online casinos, gambling away and then transferring the winnings back into crypto, exchanging it into local currency and withdrawing without the government ever knowing where this money came from.
In-game digital currencies
The developers of any video game could also create their own digital currency, which can be bought for real money and then used to acquire different skins or services on their platform…Except, this has already been done just not viewed this way. It does not matter how you look at it but Riot Games’ League of Legends is a beautiful example of this. Although the players being unable to trade with each other the Riot Points, or RP, is a cryptocurrency on its own. One is using money to acquire certain amounts of it and then utilize it to buy different in-game items like champion skins, champions themselves, map skins for the Teamfight Tactics game mode, and etc. This is one instance of video games utilizing digital currency created by the company, however, limited, it is still a precedent.
Some of the ICO companies have also been brainstorming the idea to create a cryptocurrency, which is mined via playing a video game. If the gameplay is addictive enough, why not let the users generate extra revenue just by playing the game exchanging the additional processing power for the revenue? Although, this idea may be a bit dangerous, as the mining degrades the hardware quite quickly and a lot of people may not be okay with such endeavors. Giving the ability to choose whether to participate or not is a one good option interested firms should consider.
As cryptocurrency keeps evolving the practices of its use may also change in due time. With the maturity of the market, overal stability is introduced. Thus making it less of a coin toss for the huge companies to delve into this matter. However, innovation usually comes from smaller companies and startups. Thus, maybe, these big companies like Valve, Riot Games, Electronic Arts, and Ubisoft are not the ones we should be looking at but rather new developers who are willing to try unique and modern approaches?
Real world parallels
Hear me out here as the idea is quite simple. Much like in the real world, the cryptocurrency adoption is happening on a much faster scale in the countries where the economies have not been yet set in stone. This means that the developing countries have a much easier time of integrating the cryptocurrencies into their economies rather than the big and already developed ones as the economic ecosystem is extremely fragile and such movements may result in huge losses for the companies, and the governments, that love keeping as many things as possible under their strict control. Where cryptocurrency shines is in the hands of the decentralized market. This is obvious due to the flock of most of the government-backed cryptocurrencies like Venezuela’s Petro for example. In comparison, countries like South Africa have their own regulatory bodies which are becoming extremely attractive to even European traders, since the fees are much less of a burden for the investors due to the fact that the country has not so many regulations in regards to the brokerage companies.
The same goes for video gaming, the companies which have already built their ecosystem are going to be slow to adopt such revolutionary ideas. Valve is a very pleasant example, but it is also not a publicly-traded company. Others like Electronic Arts have to deal with their public shareholders catering to all of their ideas, while startups can just up and do things like taking risks with the implementation of cryptocurrencies.
One way or another, nothing is set in stone, and this means that there are always things up for interpretation. As Valve has stated, it is not out of the question that the cryptocurrencies may return to their market and one unlucky case does not make the case for them.