As we at The Iconist have said before, gaming could be the use case that powers blockchain’s mass adoption.
In the latest issue of the Korean Economic Daily’s weekly magazine, Hankyung Business, Kim Gyeong-jin of Hashed explores the potential of blockchain-based games, as well as some of the dangers.
While he notes that “blockchain games” are not a well-defined category, we can differentiate them from existing games in two aspects: permanency and expandability.
Permanency is what makes blockchain an appropriate solution for financial assets. What if one day the database of the bank where your money is recorded were to disappear or be tampered with? Or what if one day the management team of a company of which you own stock were to arbitrarily issue that stock and give it so somebody else?
You’d be unable to trust them. Or give them your money.
The same goes for games. If somebody could make your in-game purchases vanish or change the issuing rules, who would invest the time or money into such a game?
In fact, games make most of their sales from a tiny minority of fee-paying users. Users are inevitably worried that the impermanence of games means that their in-game purchases will one day disappear. It’s not hard to find on online message boards complaints by users who lost all their in-game items when service for their game ended.
With blockchain games, however, users can safely store all their in-game assets and use them even after a developer shuts down game service. And in theory, you can also create games that never go out of service as long as those games run entirely upon a blockchain protocol. It’s this permanence that blockchain games such as CryptoKitties has so far stressed.
The other characteristic of blockchain games is expandability. If a game is using non-fungible tokens, you can track everything that’s happened regarding your asset from the time it was issued. This allows users to evaluate each asset based on its history. It also means you can “expand” the significance of the game and its assets.
To use a sports analogy, think of the difference between a ball and a ball signed by a sports star. Now, items used by e-sports stars can get the same kind of monetary respect.
Smart contracts, too, make games expandable. Third-party developers have created hat accessories, racing games and other expansions based on CryptoKitties.
But on the other hand
There’s concern about blockchain gaming, however.
Besides cryptocurrencies, the most popular DApps for public blockchains are for gambling. This is particularly the case on EOS and TRON. In fact, you even have games bolstering their gambling functionality to reflect this.
Blockchain games usually permit item transactions to provide users complete ownership over their assets. The problem, however, comes when these transactions take place through cryptocurrency. Though most countries refuse to recognize cryptocurrency as legal tender, you can easily exchange it for legal tender through a cryptocurrency exchange. Accordingly, you could see it as a liquid asset. So, if you could open an in-game loot box and turn its items into liquid assets, that loot box would, in essence, differ little from a lottery ticket or other form of gambling.
From a libertarian perspective, gambling isn’t necessarily a bad thing. Everything is up to the individual. But when your goal for playing a blockchain game becomes “financial reward” rather than the “fun” of the storyline, problem solving or goal achievement, you lose the inner motivation for playing in the first place. If nobody has fun playing, nobody will pay. And if nobody pays to play, the reward system becomes unsustainable.
Another complaint is that current blockchain games suffer from low quality. Blockchain infrastructure can be a pain, requiring users to create accounts, install wallets, manage a private key and pay fees. If blockchain games are going to attract users, they have to give them more value than existing games on ordinary servers. In reality, however, what you’ve got is a lot of games where cryptocurrency payment systems have simply been added on with little understanding of blockchain itself, or games where the designers demonstrated the creativity of a blockchain game but without a game developer’s polish. That even the most popular blockchain games have just 2000 daily active users reflects this.
Criticisms aside, with their permanency and expandability, blockchain games can create value that set them completely apart from existing games. New blockchain games may be able to create, in Kim’s words, “an alternative reality that actually exists.” But blockchain games still have many problems to solve. It’s going to take some time before they see noticeable commercial results. Or perhaps we’ll eventually decide, when all the experimentation is done, that blockchain games have no commercial value after all.
Still, Kim says, there’s no need to rush to criticize the experiment in blockchain gaming. It’s been only a year and a half since CryptoKitties was released, after all. Blockchain game makers need to focus on the long-term reason why they are building games on blockchain, namely, to build games that are more fun. And who knows — at the end of it, maybe you get a company that does for blockchain gaming what Supercell did for mobile gaming.
Speaking of games…
Korean blockchain game developer NOD Games unveiled Wednesday its EOS-based RPG “Crypto Sword & Magic.” The game is a blockchain version of “Sword & Magic,” an RPG that has 700,000 monthly active users through Facebook. During two weeks of trial service, the game boasted the highest transaction volume of any blockchain game.
The game lets you create your own unique items, which in turn are recorded onto the blockchain. You can trade or transact them, too, through an auction system. You can even earn rewards when you’re not logged in by renting your character out to other users through mercenary mode.
And on the worry side, Korean-language news site News 1 reports that Klaytn-based mobile game “Klaytn Knights” has attracted the attention of the Korean regulatory authorities by offering cryptocurrency to local game users.
Mobile game developer Biscuit Labs recently announced that it would provide 100 Klay through a lucky draw to 777 people who pre-registered for the game. Klay is the cryptocurrency of the Klaytn blockchain platform.
The problem is that the Ministry of Culture, Sports and Tourism’s Game Rating And Administration Committee, the body that deals with regulations pertaining to the game industry, takes a dim view of using cryptocurrency for game marketing. The law requires that firms offering computer or mobile game services receive a rating from the Game Rating And Administration Committee before they produce or distribute game material, though seven big publishers — including Google, Samsung Electronics and Kakao Games — are allowed to distribute games after autonomously giving them their own age ratings.
Late last year, however, the Game Rating And Administration Committee ordered that a game for Kakao that allowed users to earn cryptocurrency be re-rated. In the committee’s estimation, the game could encourage gambling if users were able to freely convert their cryptocurrency into cash at a cryptocurrency exchange. The committee decision was a virtual ban on distribution of cryptocurrency-based games.
According to News 1, the game industry believes the government is worried that gambling games such as poker will grow more popular if you can convert cryptocurrency into cash. An industry official told the news site that though three or four veteran game publishers plan to release blockchain games by September, they were waiting for the Game Rating And Administration Committee to pass judgment on Klaytn Knights before deciding to launch service. He also said the committee would likely decide whether the game constituted gambling based on whether Klay gets listed on exchanges.
An official from the Game Rating And Administration Committee responded that nothing was wrong with the game yet since it has yet to launch, nor have the coins been distributed. A problem could arise, however, depending on how it distributes its coins after it launches.