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‘Fortnite’ skins and PokéCoins may not seem more like a fun gimmick than an in-game necessity, but these kinds of in-game purchases make up an enormous $70 billion-plus market.
In-game purchases have been around for a minute. The first microtransaction sold by a major publisher was in 2006 when Bethesda sold horse armor in ‘The Elder Scrolls IV: Oblivion’ for $2.50.
Since then, the latter has exploded in popularity across different game universes. But therein lies the caveat.
In-game purchases like skins (i.e., digital assets) are by and large limited to the respective game ecosystems in which they are bought.
For example, the aforementioned Fortnite skins can only be used or displayed on Fortnite.
In addition to this, very few of these assets are tradable or monetizable by their owners in any shape or form.
This siloed approach to in-game purchases is not only frustrating for players, but it’s also a missed opportunity for developers.
By keeping these digital assets locked within their own ecosystems, they’re limiting the potential for cross-platform collaborations and missing out on the chance to create a thriving secondary market for digital goods.
Now, if you’re reading this, it should come as no surprise to suggest Web 3.0 as a solution to the problem.
Migrating in-game assets to on-chain networks like Ethereum’s allows players to have a wider range of control and true ownership of their assets.
By storing in-game assets on-chain, players will be able to easily sell, trade and effectively monetize their assets.
Let’s dive into how this works, and why it’s only the tip of the spear.
What do in-game purchases look like on-chain
Layer-two scaling solutions like Immutable have worked to provide NFT (non-fungible token) infrastructure on the Ethereum blockchain to reduce the cost of NFT minting.
The NFTs are, of course, representative of the in-game assets being purchased.
By selling assets as NFTs, Web 3.0 gamers have the ability to easily trade and transfer their in-game assets to different wallets.
Additionally, NFT assets give the game absolute ownership of their purchased goods.
While some argue that the first order of business is to simply prioritize using Web 3.0 as a way to store and transact purchasable game assets, others believe we should move the entire experience on-chain.
By creating a decentralized ecosystem for in-game assets, we can foster a new level of trust and transparency between players and developers.
Bad actors or game developers would be unable to manipulate prices and prevent gamers from being subject or entire games leaving the market (along with your in-game purchases).
With blockchain, everything is out in the open, verifiable and transferable.
Imagine being able to flaunt your hard-earned Fortnite skin in ‘Call of Duty’ or trading your ‘World of Warcraft’ sword for a rare Pokémon.
The future of gaming
So, what does the future of gaming look like with on-chain purchases?
For starters, we can expect to see a lot more cross-platform collaborations and integrations.
Developers will be incentivized to create assets that can be used across multiple games, creating a more interconnected gaming ecosystem.
We can also expect to see a rise in player-driven economies, where gamers have more control over the value of their digital assets.
With the ability to trade and sell items on secondary markets, players will be able to make real money from their gaming habits something that’s already happening in the world of esports.
But perhaps the most exciting prospect is the potential for new types of gaming experiences that were never possible before.
Imagine a game where your actions and choices have real-world consequences, thanks to the use of smart contracts and decentralized governance.
Games could also improve on the largely flawed play-to-earn model, allowing you to earn cryptocurrency by completing quests and challenges.
Of course, the path to on-chain gaming is not without its challenges.
There are technical hurdles to overcome, such as scalability and interoperability between different blockchain networks.
There are also legal and regulatory issues to navigate particularly when it comes to gambling and the use of tokens.
But perhaps the biggest challenge is convincing gamers and developers to embrace this new paradigm.
Change is never easy, and there will undoubtedly be resistance from those who are comfortable with the status quo.
But as more and more players experience the benefits of on-chain gaming, we can expect to see a gradual shift in attitudes.
Takeaways
Put simply, on-chain gaming in the near future isn’t just some Web 3.0 pipe dream the possibility of a world where your skins, coins, loot boxes and others aren’t just meaningless pixels anymore is just around the bend.
In-game purchases will become valuable assets that you can trade and sell or even use across different games.
Sure, there are still some kinks to work out like figuring out how to make everything play nicely together and convincing the bigwigs in the gaming industry to get on board.
However, once people start seeing the benefits of on-chain gaming, there’ll be no going back.
Niko Hosn is the CTO of ZTX and founder of RareMint. Niko is an expert in Web 3.0 gaming, blockchain development and composability.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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