An Ethereum-Based Gaming Marketplace
The gaming industry is a growing ecosystem with about 63% of US households home to at least one person who plays video and computer games three hours or more per week. With a $99.6 billion dollar market, it’s not just about ‘fun and games.’ Over half of all of the households in the US (65%) own devices used to play video games, with the average age of a gamer at 35 years old. With the stats continuing to rise, it’s predicted that over the next few years, the market will grow to nearly $120 billion.
So what makes the gaming industry so attractive? Aside from being a tool to escape reality and partake in recreational activities, these games also challenge players and reward their achievements. Users can earn money, collect new items, weapons, outfits, and other assets within these gaming worlds, similar to how we earn and purchase items in real life. The allure of gaming could be extracted from the fact that games simulate real-life blended with fantasy. For example racing, fighting, space travel, architectural design, military strategy, and more. A person could become an assassin or billionaire, or, in essence, anyone they want. Because of the easy draw of people to the gaming industry, gaming companies have transformed simple profit of singular game purchases into a more layered concept of revenue. Thanks to the internet, players can purchase a game, then purchase in-game items instead of winning or unlocking them. With this new concept, players are able to buy and sell game items they either purchase or earn during gameplay. One example, in the game Forza Horizon 3, once a player is done with a car, they can auction it off to other players for an in-game currency to ease the financial hit incurred during gameplay (initial car purchase, upgrades to the car, etc.).
Some games, such as mobile apps, may be free to use and are easily accessible through a download. The game, Candy Crush Saga, for example, extra lives or advances to the next level may require in-game purchases. Players have the option to connect their social media accounts to their games so they may request these items from friends who play the game. But this allows the game company access to even more player data as well as their contacts.
Player data is a two-way road that has its drawbacks as well as its advantages. Player data is a crucial element to enhancing the gaming experience. Extrapolated data from internet-connected gaming creates more uniquely tailored gameplay and storylines that relate more to the player. “Realizing the benefits from gamer data requires not only the presence of data, but also the ability to centralize it, continuously update it, and drive insights at the user and segment level. Master data management and smart data design are core capabilities that enable game companies to turn data into insights and use the insights to achieve outcomes. When data is managed properly, it improves the analysis to drive business outcomes and also can improve customer experience.”
However, some gaming companies may abuse the cultivation of data. Zynga, an American provider of social video game services, became a company that was data-dependent in 2011. With its quick success in its ability to mine user data and use its analytic capabilities to attract users to its games, the price skyrocketed. Yet, over time the company became solely focused on hard metrics which sacrificed creativity in content and player flexibility. This caused a crash in June of 2014. Without player incentive, interest in a game over time will wane.
In the Steam community, mod creators are able to create and sell their mods and retain a profit. This model promotes game use and grows the gaming community as a whole. Therefore, if other gaming companies supported this entrepreneurial spirit, by allowing in-game achievements and purchases to be bought and sold for real outside-game profit, it could potentially boost revenue for the long term. Instead of taking a back seat, gaming companies could possibly get a slice of the revenue pie if a marketplace was opened up; similar to how eBay sellers are charged a percentage to sell items on eBay.
An Ethereum Gaming Marketplace
An Ethereum-based gaming marketplace would solve cross-game asset sales and help players obtain sole ownership over items and assets they may win, earn, or buy within the marketplace. It could also streamline player data through the hybrid decentralized structure. Instead of accessing a player’s social media accounts, player data is only extrapolated through what the player is doing within the game, online. Utilizing the blockchain, it could also ensure authenticity and disallow counterfeit or duplicate items, ensure that assets were not obtained through ‘cheating’, and facilitate and execute seamless and instantaneous transactions. A decentralized Ethereum marketplace would incentivize players and create a community that promotes long-term gaming interests. The idea of turning in-game items that are earned, won, or bought into a profit could potentially catapult the gaming industry into a self-monetizing effort, thus creating income supplementation.
When Instagram was launched, it was meant to be a social media image-sharing platform. Since society has moved from text-based driven content toward media-rich, image and video-based content, many Instagram users began making profits off of their own accounts. By taking photos with products, or going to restaurants, Instagram users with large followings are paid to showcase these products or restaurants. Originally, the idea of Instagram was to become the new image-centric social media platform, but users quickly benefited off their own profile popularity by turning it into an income generator. Since Facebook bought the platform, it’s now a viable marketing tool for businesses, complete with insights and toolkits.
If an Ethereum-based marketplace was introduced into online gaming, not only does this promote monetization of gamers’ assets, but it mimics how we buy or sell items we own in real-life. When we buy a car and drive it for a few years, we may want to sell it later, and if modified turn a profit. Gaming companies could enter into this gaming economy by offering exclusive items to sell. A gamer could purchase a game, then sell the exclusively offered items. Once added to the marketplace, the blockchain would verify its authenticity, then seamlessly enact the transaction.
While monetizing gaming assets isn’t what traditionally draws gamers to the space, it can be an incentive to cultivate an even wider audience. By merging the gaming industry with Ethereum, it can create an entirely new and exciting ecosystem that will create a bridge between gamers and the decentralized community.