Game makers are innovating with blockchain to address the risks involved with online purchasing and to create new use cases.
Whether you’ve spent your quarantine mastering online poker or you’re on the 500th hour of Animal Crossing, you and gamers across the spectrum now rely on in-game currency to wager bets or make virtual purchases.
Yet, from security threats posed by hackers to lacking custodial services, there are numerous risks involved when it comes to online purchasing through video games. Chairman and CEO of Atari Frédéric Chesnais believes blockchain is the answer to some of these issues and can become a source of innovation for game platforms.
“We’ve been playing with in-game currency for so long so we are used to creating and managing currencies because this is the basic function of any free-to-play game. We are very familiar with the mechanics, the tokenomics and all that deals with blockchain,” Chesnais said.
“Atari created the video game industry, and we see blockchain from two different angles. The first one is the vision from the gamer. So as a gamer you want to be able to buy games and use games on the blockchain. There is going to be a big business in grinding and selling avatars. It’s already big, but it is going to be much, much bigger. We are trying to help our users by using the blockchain and playing on the blockchain or playing or buying on the blockchain as an individual. That’s why we’re creating the Atari Token.”
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Last month, Chesnais and Atari announced that the company was teaming up with blockchain application creator Arkane Network to support the Atari Token, so developers can use it as in-game currency for buying, selling, and trading assets.
Chesnais explained that the partnership with Arkane is “another significant step toward broad adoption of blockchain initiatives across interactive entertainment,” and that the deal will allow the Atari Token cryptocurrency to be used as a secure means to buy, sell, and trade digital assets.
Despite gaming’s long standing use of currency, the incorporation of blockchain technology is relatively new. The trend started with one of the internet’s favorite topics—cats. A game called CryptoKitties, which allowed users to breed and sell cats using blockchain, is one of the earliest examples of the technology being fused with gaming.
CryptoKitties was so popular after its debut in December 2017 that it clogged Ethereum’s underlying blockchain network, causing a sixfold increase in pending transactions.
Since then, game makers have made it a priority to explore the ways blockchain can be used to make games, simpler, safer and more secure.
“I believe that you’re going to have a lot of companies in the gaming space that are going to use blockchain, not only for games but also because if you look at a game like Rollercoaster Tycoon, the studio is in Montreal, there is a tester in India, someone doing animations in Thailand, someone doing 3D drawings in Vietnam, someone doing the environment from South Korea,” Chesnais said.
“As companies we will use blockchain more and more to buy services from other people. You have to look at it not only from a gaming perspective, like how do I buy assets in a game, but also as professionals. How do I pay for services, or how do I protect my properties using the blockchain to trace assets and compensate people for that.”
Fabio Canesin, CEO and co-founder of decentralized financial services platform Nash, listed off a number of blockchain-related use cases for gamers ranging from the tokenization of non-fungible physical assets to security for gambling games.
Canesin added that blockchain can better secure and offer more efficient collectible in-game digital currencies for online and console games such as Overwatch or Fortnite
“Blockchain is a way to attach trust, freedom, and liquidity to assets. If your game is a gambling game or card game, some component of the game itself requires trust. Every poker game has a card shuffling feature and it’s in the interest of the players that the shuffling of this card deck is fair, that it isn’t being gamed for someone on the table,” Canesin said.
Games need a source of randomness that is trusted. Anything tied to financial assets could be run by the blockchain and probably should be run by the blockchain.”
Canesin said that with games like Fortnight and its in-game currency called V-Bucks, the makers could have eschewed the complications related to creating their own infrastructure and run a token on the blockchain, something that is far simpler.
Game makers can even take it a step further, using blockchain to manage in-game assets like weapons, armor, and other things to make them digitized in a way that is transferable, potentially to other games.
Tim Dierckxsens, co-founder and CSO of Arkane Network, said games like Fortnite, Hearthstone or League of Legends are free-to-play games generating millions, and sometimes billions, of dollars in revenue.
“In just a few years, this monetization model has taken the gaming industry by storm. These games are more than games, they are a social platform. The thing is we only hear about the success stories such as Pokemon Go or Fortnite,” Dierckxsens said, explaining that in addition to helping big game makers like Atari, blockchain can be useful for smaller ones, too.
“The truth is that 9,999 out of 10,000 apps fail to monetize and aren’t generating enough revenue. Plenty free-to-play games are forced to shut down their servers, leaving gamers out in the cold with their hours spent building their characters and sometimes spending a fortune within the virtual game. Blockchain is now shifting the gaming industry once more from a free-to-play model into a play-to-earn model where game assets can be owned by the player and can also be used or sold outside of the game.”
Dierckxsens added that blockchain can make gamers “partners in growing the game as a social platform.”
According to Canesin, several games are already using blockchain and there are also platforms like Enjin that create blockchain-based tokens which can be used across a number of different games.
He said one day a company like Microsoft could have a digital currency for games, where a player could ostensibly use the same currency from a title like Halo in other games like Call of Duty.
This also bleeds into another use case Canesin cited concerning licensing. Game players have long crowed about being locked into one device or platform’s universe.
Canesin mused about a future world where using blockchain, game players could move their favorite games in between various consoles and platforms.
“You could just take your license and do a blockchain transfer to someone and they would have that license. It’s like you could have the same experience of lending your game to someone else but online,” Canesin said.
Dierckxsens and Chesnais explained that the recently announced partnership would see the Arkane integrate Atari’s crypto-currency in its offering, support the Atari Token, and bolster the game maker’s strategic objective to boost the adoption of the Atari Token throughout the interactive entertainment ecosystem.
“Atari has always been a pioneer in the video game industry and it is great to see how they understand blockchain technology’s increasing role in the development of the economic landscape within video games and entertainment. With this partnership, we will bring game developers, the gaming community, and the Atari brand together to embrace blockchain technology as a solution to record digital assets and value transactions,” Dierckxsens said.
“I regularly compare blockchain technology with cloud technology. At first people wouldn’t believe that we’d ever trade on-premise infrastructure with the cloud but it’s like Peter Diamandis wrote in his book: “The Future Is Faster Than You Think.”
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