In a June 19 article, Kyunghyang Sinmun, the daily newspaper run by Korean computer gaming news site Kyunghyang Games, looks at the impact blockchain may have on gaming.
Firstly, blockchain companies are taking a keen interest in gaming. The article begins by noting that Hashed Labs, the DApp accelerator of pioneering Korean crypto fund Hashed, invested in three gaming companies after it was founded. Game companies are a conspicuous presence in ICON’s ongoing DApp development contest too, as they are likely to be in Klaytn’s upcoming content.
The interest is apparently mutual, with gaming companies turning to blockchain as a possible solution to the limits of existing business models. Recently, major Korean game developer MGame unveiled a game platform based on EOS, while Gala Lab is cooperating with GXC. Game developers hope that blockchain can bestow value on in-game assets to allow a larger number of users to invest in the game, freeing developers from an over-dependence on payments made by just a handful of users.
Blockchain + Games = Synergy
According to the article, blockchain has high hopes that the virtual currency system used by games can help demonstrate the utility of blockchain technology. Some observers also believe that games could become key content that provide first mover advantages to blockchain platforms in their competition against each other.
Hashed said through Hashed Labs that it will demonstrate the use potential of blockchain by way of games, a form of content with which the public was widely familiar. The fund said it will show that the economic systems, marketplaces and guilds already demonstrated by today’s computer games could be converted to the crypto economy.
Meanwhile, around 30 game-related services have so far taken part in ICON’s TX Challenge (as of June 12). ICONLOOP’s YJ Chung told Kyunghyang Games that ICON was good for game services since it processed transactions quickly with low fees.
And as noted above, game companies are reciprocating the love.
One small-or-medium sized developer that had developed a game based on EOS said it was developing more games after switching to Klaytn. The CEO of the unnamed company said since blockchain technology was open source, with just a basic understanding you could easily move from one platform to another. The developer hoped the switch would plug future games into Klaytn parent company Kakao’s vast Korean network. Klaytn will begin its DApp content from July 1.
An official from MGame, the Korean game developer which now operates based on EOS’s EOSRoyale platform, said the gaming industry was preparing to actively respond to next-generation platforms out of the belief that 2019 would be a foundational year in which a variety of blockchain games appear.
Breaking the 2 Percent Wall
That’s the average percentage of users who pay for mobile games.
With just a tiny fraction of users accounting for the bulk of user fees, game companies are turning to in-game ads and other methods to overcome the situation. According to the article, the problem is that in the current system, even if users buy in-game items, the game companies retain ownership; users just rent them.
It’s a business model game companies want to transform as mobile gaming enters maturity.
And that’s where blockchain comes in.
Blockchain-based games record on the blockchain what users acquire as they play. Accordingly, what the users acquire, they own.
This could change the way games fund themselves.
Yat Siu, the co-founder of leading Hong Kong game publisher Animoca Brands, decided to invest in blockchain as growth subsides in the traditional gaming market, where 98 percent of mobile game users pay nothing. Siu says if items taking the form of Non-Fungible Tokens, or NFTs, begin to appear, it could begin to change the perception of games as free. He’s also predicted that the current game market, which records US$75 million in sales in a system in which just 2 percent of users pay, could grow into the US$100 million zone if 1 percent of users are induced to make additional payments using blockchain.
In fact, of the 20,000 users who had downloaded the game EOS Knights as of April — well, of the 20,000 downloads, anyway — 10,000 had made payments. Gala Lab’s “Flyff for GXC,” a Game X Coin-powered version of the MMORPG “Flyff,” is preparing its formal launch after completing closed beta testing. GXC says the GXC version of the game has a 30 percent higher retention rate than the existing game server, and with higher quest completion rates, too.
This is to say that, as perception of in-game assets change, users are participating more actively.
On a related note, The Iconist reminds readers that last month, ICON announced that it had formed a strategic alliance with global blockchain game producer MixMarvel. ICON said at the time:
“MixMarvel, which newly joined as ICON’s DApp (Decentralized Application) partner, aims to connect game content creators with players with the goal of building a game community filled with voluntary participation. With its proprietary game series including ‘HyperDragons’ and ‘HyperSnakes,’ MixMarvel is the world’s first large-scale strategy blockchain game publisher with more than 6,000 DAU. MixMarvel plans to release its blockchain-based gaming platform MixMarvel Platform in 2Q 2019.
With this partnership, MixMarvel will support ICON’s blockchain ecosystem expansion upon 3 core pillars: integrating its game platform to ICON’s public blockchain network, applying as a P-Rep candidate, and participating in the ICX Station program. MixMarvel plans to complete integration of the ICON Platform to Rocket Protocol, the layer 2 solution for blockchain games, as well as MixMarvel SDK, a toolkit for the developer community to build on Rocket Protocol, within 4Q 2019. Its strategy is to support not only the production of new blockchain games but also the introduction of blockchain technology into existing online and mobile game series, reducing the entry barriers.”