Could Gaming be Blockchain’s First Killer DApp?

Many comparisons have been drawn between the current state of blockchain and cryptocurrency adoption and the Internet before it became an essential facet of daily life. Cryptocurrencies are current deeply entrenched in a bear market comparable to tech stocks following the bursting of the dotcom bubble in 2000. But the level of adoption is far below that which the Internet had reached by 2000. You’d have to go back to the early nineties, when the Internet was very niche and with no obvious future worth to many outside ardent tech communities.

None of the DApps ranked on StateoftheDapps.com currently has more than a few thousand active users. We’re clearly still a long way from mainstream adoption. But there are many projects working toward creating the first “killer DApp” that could spark adoption. And one of the most promising spaces is gaming.

CryptoKitties is probably the best-known DApp game. At its peak, unique felines generated in the game were exchanging hands for as much as $120,000. Early hype has largely died off and both interest in the game and the value of its creations have fallen considerably since December 2017. However, the game’s developers - AxiomZen’s Dapper Labs - recently raised $15 million in venture capital funding. This follows $12 million raised in another VC fundraising round back in March.

Dapper Labs’ investors include Samsung NEXT and Google’s GV VC subsidiaries. Another entertainment giant, Sony, announced last month they had developed a contactless cryptocurrency wallet. There are also countless smaller developers working hard to create the first true breakthrough blockchain-based game.

But how could blockchain technology benefit gaming? There are a number of innovations currently being explored that could be a big part of the first true breakthrough gaming DApp.

Transferable Assets & Modability

There has been a seismic shift in the economic model utilized by games developers over the past few years. Whereas games were traditionally sold for a one-off fee, developers have increasingly come to rely on ongoing microtransactions and downloadable content (DLC) as a huge source of revenue. Many financially successful mobile games operate some type of “freemium” model, with gamers paying for various items and upgrades. Fortnite has shown the incredible potential for this economic model, generating more than $1 billion despite the main game being given away for free.

Gamers aren’t necessarily happy about this development. Many new titles release DLC that could have easily been incorporated into a title’s initial release. Some of the fiercest backlash was against EA’s Star Wars Battlefront, which gave gamers the “option” to access flagship characters for an extra fee, or alternatively spend a ludicrous amount of time grinding to access these characters without paying extra.

EA eventually backpedalled on Battlefront, but these kinds of microtransactions are a huge part of some of the studio’s over titles. FIFA Ultimate Team is another egregious example. Players spend real money on random packs of players. Many committed players will pay upwards of $100 on these packs - far more than the game’s initial cost - while there are dozens of news article online about gamers whose Ultimate Spend has spiralled to $10,000 or more. These players can be traded through a marketplace built into the game, and there are many auction sites where FIFA coins and players can be exchanged for real-world cash. But these auction sites violate EA’s terms and conditions. If you’re found to have used them, you risk having your account suspended and any real cash spent turns to nothing.

The main selling of point of CryptoKitties is that its virtual creatures are the complete digital property of the players. They are free to buy and sell creatures as they wish. And this free market for in-game assets is a big part of what could potentially spark the success of blockchain-based gaming DApps. Transparent smart contracts will also allow players to verify the randomization mechanics underpinning the types of loot packs utilized in FIFA Ultimate Team and Star Wars Battlefront.

One model for the first killer gaming DApp could be Pokemon GO. Launched in July 2016, the game allows mobile users to capture Pokemon through exploration of the real-world environment. City parks and other landmarks across the world were suddenly swarmed with people playing the game, while YouTube is full of videos of crowds converging whether a rare Pokemon has appeared.

Pokemon GO received more than 500 million downloads by the end of 2016 and it was a genuine global cultural phenomenon. However, interest quickly tapered off, and most would find it strangely anachronistic to see someone wandering a city park late at night trying to snatch a rare Charizard.

But imagine if such a game was launched where players were able to exchange their captured creatures for real cash. Becoming a Pokemon GO master would likely carry a much longer-lived cultural cachet if you were able to earn real money from your endeavors.

Blockchain-backed DApp games could also allow you to use assets and player avatars across titles. A recent Medium post from the Enjin project imagines such a scenario, with a players’ character levelling up across a multiverse of independent worlds. Imagine if the creatures captured in one title could be used to battle in another independently-created one. It’s also possible to imagine dedicated modders monetizing their creations in open-source blockchain game worlds. The potential scope of the blockchain gaming revolution could be virtually infinite.

Competitive Gaming

Another area with huge potential for blockchain-based gaming is eSports. Top eSports teams have earned tens of millions of dollars in recent years, while streaming of game playing on YouTube and Twitch has made superstars of top players. Fortnite’s best-known player, Ninja, received $5,000 for beating superstar rapper Drake in a match that received millions of views.

As one of the biggest stars in music, Drake can afford to drop $5,000 on breakfast. But for lesser known players, it’s a lot harder to create a situation where you feel confident you’ll receive your winnings betting on games.

This seems like a no-brainer implementation of the smart contract concept pioneered by Ethereum. Playing for real-money stakes simply meanly creating a smart contract where all players stake a pre-agreed sum, which is automatically awarded to the winner.

This is one of the proposed functionalities of Plair, the first ICO launched over the VeChain Thor blockchain platform. Plair recently shared a demo video on YouTube, showing how users can easily create tournaments for popular games such as DOTA or PlayerUnknown’s Battlegrounds.

These tournaments are completely customizable being their creators, who can allot entry fees and prize money, along with connecting spectators easily to tournament streaming links.

The Development of a DApp Gaming Ecosystem

The pieces are already falling into place for the development of a wide-ranging DApp gaming ecosystem. TrustNote has launched the iToken platform, which allows anyone to quickly create and manage their own digital assets. This platform means small games developers can create unique tokens and digital assets within minutes, without needing to code their own smart contracts. Bit.Game has developed a dedicated marketplace for exchanging blockchain-based gaming assets.

And DApp-based games are growing in complexity, with studios such as Loom and BitGuild producing games that go beyond the simplicity of CryptoKitties. Ethereum is planning major updates that will make the platform much more conducive to the microtransactions required of DApp-based gaming. The killer gaming DApp may not have arrived yet, but the groundwork is being laid for its arrival.

The Killer Gaming DApp

Just as the Internet has become integrated seamlessly with the lives of billions across the world, true mainstream adoption of blockchain technology will mean that technology becoming invisible. DApps and blockchain will achieve true mainstream success once users aren’t even aware that they’re using blockchain technology.

A recent post by Loom on Medium uses statistics from Limelight to suggest gaming could be a major catalyst for blockchain and DApp adoption. There are more than 96 million people who download upwards of 300 games per year. Capturing a small segment of this huge marketplace may be all it takes for blockchain-based gaming to flourish.

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Could Gaming be Blockchain’s First Killer DApp?
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