BLOCKCHAIN GAMING: The Ultimate Guide To Africa’s Game Evolution

Although the concept of blockchain was introduced more than ten years ago, it took some time for blockchain gaming to emerge. Despite years of speculation on the potential of blockchains to enhance video games by providing player rewards and ownership of digital content, it wasn’t until 2020 that Axie Infinity made its mark as the largest web3 game thus far. However, Axie Infinity faced a setback in March 2022 when it suffered a $600 million hack to its cross-chain bridge protocol, leading to significant declines in usage. Nonetheless, there is still considerable enthusiasm about the intersection of blockchains, video games, and metaverses, and the potential for creating new economic models in the world’s largest entertainment industry that benefit both players and companies.

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The excitement surrounding blockchain gaming stems from the ability it provides participants to have more control over their gaming experiences. This allows them to earn tokens or in-game assets and trade them on decentralized marketplaces. Currently, interest in blockchain gaming remains strong, with a report by Allied Market Research indicating that the market was valued at $4.83 billion in 2022 and is projected to grow by 68% by 2030.

What Are Blockchain Games?

In essence, blockchain games are video games that utilize blockchain technology in their administration or development. Depending on how they utilize blockchain technology, they may be referred to as crypto games, NFT games, web3 games, or metaverse games. The incorporation of blockchain technology sets them apart from traditional video games in several significant ways:

• Decentralization: Instead of being controlled by a single corporation or entity, blockchain games can be developed and maintained by numerous independent members of a decentralized autonomous organization (DAO). This decentralized structure makes it more challenging to compromise or shut down these games. However, it is possible for traditional video game developers to offer blockchain games with similar benefits without utilizing a DAO.
• Interoperability: Blockchain-based games have the capability to seamlessly interact with other blockchain games, thereby broadening the potential market for assets associated with each game.
• In-game ownership and play-to-earn incentives: Blockchain games offer users the opportunity to purchase or earn digital assets such as native tokens or NFTs within the game. Players can choose to retain or sell these assets on decentralized marketplaces in exchange for fiat currency.
• User data portability: With blockchain gaming, players have greater control over their own data and assets, allowing them to transfer them from one platform or game to another according to their preferences.

How Can The Convergence of Blockchain Technology and Video Games Be Realized?

Blockchain games leverage various aspects of blockchain technology, ranging from smart contracts that facilitate in-game transactions to the creation of in-game digital assets like NFTs, as well as the validation and recording of all blockchain transactions occurring within the game environment. This technology enables players to earn monetary rewards through gameplay.

Additionally, blockchain technology is utilized to finance blockchain game projects, with native tokens being distributed through initial game offerings (IGO) or initial coin offerings (ICO) to developers, gamers, and institutional investors keen on participating in these games.

• NFTs and gaming:- In blockchain gaming, NFTs (or non-fungible tokens) represent unique digital assets that gamers have the option to purchase, utilize within the game, and trade with other gamers and collectors. These assets are typically issued in limited quantities, fostering digital scarcity and contributing to their value. Some NFTs may also be compatible or transferrable to other games, enabling holders to utilize them across different blockchain gaming ecosystems, exemplifying interoperability. Like all NFTs, ownership of NFTs associated with games is securely recorded on the blockchain, preventing duplication and ensuring their authenticity.
• Metaverse games:- Metaverse games are digital realms featuring financial systems based on cryptocurrency. These games offer immersive environments where players navigate virtual worlds using customizable characters, engaging in real-time interactions with other players within 3D settings. Some metaverse games utilize virtual reality (VR) technology to heighten immersion and realism.

A notable example of a popular metaverse game is Decentraland, operating on the Ethereum blockchain. Within this metaverse, players utilize tokens to create avatars, acquire virtual land (represented by NFTs), and construct various virtual experiences such as concerts or art galleries for communal enjoyment. Players can also earn income by renting out or selling their virtual properties.

Decentraland operates under the governance of a DAO (Decentralized Autonomous Organization), requiring members to acquire MANA (the game’s native token) to participate in decision-making processes or voting on issues. MANA tokens can also be utilized to purchase NFTs representing virtual land or worlds within the game.

Blockchain video games, although currently less associated with metaverse initiatives, share many common goals:

1. Establishing more open-ended economies.
2. Fostering connections among individuals and communities.
3. Pushing the boundaries of digital ownership.
4. Decentralizing and distributing the value they generate.
5. Creating immersive virtual experiences akin to reality.

Similar to metaverse projects, blockchain video games have recently experienced a surge in popularity and funding. According to DappRadar, activity in blockchain gaming has witnessed a remarkable 2,000% increase over the past year. Moreover, blockchain-based game companies raised $2.5 billion in funding last quarter, marking a 150% increase from the previous quarter.

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Play To Earn

One significant benefit of blockchain games compared to conventional ones lies in their play-to-earn (P2E) incentives. These incentives enable players to earn native cryptocurrency tokens or NFTs through gameplay or time spent within a blockchain game. In P2E games such as Axie Infinity, players have the opportunity to exchange these assets with other players within the game or sell them on decentralized NFT marketplaces. Through these financial incentives, P2E crypto games not only attract players but also encourage them to remain engaged in gameplay.

How Blockchain Technology Can Enhance The Gaming Experience

In traditional gaming, the game’s developer holds control over all the data and servers associated with the game, resulting in a closed ecosystem. Consequently, if the developer chooses to discontinue the game, players have no influence over the decision. Conversely, when game assets and data are stored on a blockchain, the game becomes more resilient.

Furthermore, while traditional games often rely on subscription models or the purchase of assets that players cannot transfer, the blockchain gaming model allows users to earn and possess assets indefinitely, with the flexibility to utilize them in other games or virtual environments. By granting users control over assets, blockchain gaming offers a more engaging experience compared to traditional games.

In addition to this advantage, the decentralized nature of blockchain games fosters increased community participation and personal investment. Blockchain games are frequently governed by collectives such as DAOs (Decentralized Autonomous Organizations) that seek user input, resulting in more player-driven enhancements compared to traditional games. These collectives have played a pivotal role in shaping the blockchain gaming landscape.

Another benefit of crypto games is that blockchains are transparent and immutable, preventing players from exploiting the system and thus fostering user trust. Smart contracts validate in-game activities using cryptography, ensuring that gameplay remains fair and tamper-proof.

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Limitations and Challenges of Blockchain Gaming

Crypto games, as the newcomers in the gaming realm, have some ground to cover, particularly in terms of user experience (UX). In blockchain games, UX limitations manifest in various ways:

1. For individuals lacking knowledge in cryptocurrency, engaging with blockchain games can prove challenging, as acquiring in-game assets often necessitates conducting crypto transactions. Given that this concept is not yet widespread in today’s society, it serves as a barrier to entry for some players.
2. Network scalability poses a persistent challenge, particularly within platforms like Ethereum, where many blockchain games operate. Instances of network congestion can result in delays within the game when transactions are required, potentially discouraging users.
3. During periods of network congestion, transaction fees tend to rise, leading to frustration among users and increasing the cost of gameplay.
4. Any technical issues within the blockchain network have the potential to negatively impact gameplay.
5. From a graphical standpoint, blockchain games currently lag behind traditional gaming in terms of sophistication, as well as in the complexity of their plots and gameplay. However, we anticipate that blockchain gaming will address this challenge as decentralized applications (dApps) continue to innovate and evolve.

Conclusion

For blockchain gaming to progress and expand, the ecosystem must address several fundamental questions. For instance, how can developers effectively educate and incentivize traditional video game players to explore crypto games? What policies could blockchain gaming projects implement to grant individuals greater control over their gaming data?

How can blockchain game developers prioritize interoperability to enable smoother transitions for players across games and crypto networks? Additionally, how can DAOs effectively govern metaverse gaming projects or promote blockchain gaming in a manner that fosters wider adoption?

Furthermore, blockchain gaming requires support from the public sector. Regarding consumer protections, regulators need to contemplate what form of crypto legislation will provide the best safeguard for blockchain gamers without stifling innovation for web3 game projects and developers.

Moreover, law enforcement must assess whether individuals should face prosecution for crimes committed by their avatars in the metaverse. While this prospect may seem distant to some, virtual reality gaming environments in the web2 world are already grappling with issues such as sexual harassment in the metaverse.

On a more positive note, there are promising developments at the intersection of virtual reality and blockchain gaming. In the near future, blockchains could be utilized to facilitate the ownership and trading of virtual real estate, representing a significant advancement in this space.