What is Blockchain gaming? Exactly, what benefits does it offer? What are the challenges it is faces in Web3?

What is Blockchain Gaming?

Blockchain gaming is a type of video game that uses blockchain technology to create a more secure and transparent gaming experience.

These blockchain games typically use NFT(Non-fungible tokens) to represent in-game items, such as weapons, armor, and land.

This allows players to own their in-game assets and trade them on secondary markets.

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History of Blockchain Gaming

The first blockchain game was Crypto kitties, launched in 2017. It is a game where players can collect, breed, and trade digital cats.

The game was a huge success, and it helped to raise awareness of blockchain technology and its potential applications in gaming.

How does Blockchain is changing the Gaming Industry?

Chiefly, blockchain is changing the gaming industry in a number of ways.

a. Ownership of in-game assets

Blockchain technology creates a secure and transparent way to track ownership of in-game assets. This means that players can truly own their in-game items, and they can trade or sell them to other players.

b. Decentralized Gaming Economies

Basically, blockchain creates decentralized gaming economies. This means that players can own and control their own in-game assets,and they can trade them with each other without authority.

c. Play-to-earn Games

Blockchain technology creates play-to-earn games. These games allow players to earn cryptocurrency or other rewards by playing the game.

This has the potential to create a new way for players to make money from gaming.

d.Transparency and Security

This blockchain technology is a secure and transparent way to store data. This makes it ideal for gaming applications,where players need to be confident that their data is safe and secure.

e. Enhanced player experience

This technology enhances the player experience in a number of ways.

For example, it creates more immersive worlds, provide more rewards for players,and make it easier for players to connect with each other.

Overall, blockchain is destructive technology that has the potential to change the gaming industry in a major way.

It is still early days, but the potential benefits of the blockchain gaming are clear.

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What are the reasons,We are not living in a Blockchain-enabled Gaming Utopia?

What could you have against the promise of gaming landscape where players truly own their gameplay?

Actually, its a story we have been hearing for what seems like years now. Blockchain-based gaming will onboard a new Web3 users en masse.

The promise of a gaming landscape where players truly own their characters and in-game assets. And where developers can create in a decentralized censorship -resistant environment.

Where the power dynamics of the gaming industry are flipping on their heads.

It’s a compelling narrative. One that seems more and more possible as Web3 matures and the technology’s potential continues to unfold.

And yet, the questions remains ,why it has not happened yet?

What reasons there could be? Let’s try to dive deep in to it.

Reasons

One of the biggest reasons we are not living in a blockchain-enabled gaming utopia uis resistance from an unexpected quarter,that is gamers themselves.

Surprisingly, or not at this point, gamers are often the most vocal critics of blockchain, crypto and NFT’s.

Which seems counterintuitive given the potential benefits of these technologies for the gaming community, right?

May be the vitriol is warranted. We in Web3 like to preach the virtues of honesty,transparency,equality and true ownership.

But let’s be real, the number of scams,spoofs,hacks, phishers,ill-intentioned influencers and abundance of downright shady folks make for some pretty bad PR.

And the gamers are more aware . Just go on any gaming subreddit and search for the words “non-fungible”.”RIP.

Some people I know, own every gaming system ever made and spends the time that they are not gaming,watching other people game online.

They summed up for me,”Gamers hate NFTs,CRYPTO, and blockchain stuff. It feels like someone is going door-to-door trying to sell us crappy knife sets.

Like, hey, look over there’, while they stick their hands in our pockets”.

I get it,. Between FTX,the hacks, and ponzi style NFT pump and dumps (to name a few). It’s a bad look,man.

But I am here to help you look past all that just for a minute. I have seen a mountain ,and its glorious.

The crypto world might be rife with dirty rotten people, but that does not mean that blockchain gaming is a bust.

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Current Situation of Blockchain Gaming

A key issue with the current state of gaming is the level of centralized control that game developers and publishers maintain over their products.

This control often extends beyond the initial creation and release of a game, affecting ongoing gameplay and the player experience.

One of the most telling examples of Warcraft incident involving none other than the Shiba godfather himself, Vitalik Bueterin,the creator of Ethereum.

World of Warcraft (WoW) is a massively multiplayer online role-playing game (MMORPG) that has captivated millions of players worldwide since its release in 2004.

When people say MMORPG, WoW is the game that comes to mind.

So what’s the problem here?

The game’s developer, Blizzard Entertainment, has the ability to modify gameplay, balance character classes and tweak the game environment at will.

But in 2010, Vitalik Buetrin,an avid WoW player, experienced the arbitrary nature of this centralized control firsthand.

The game developers had made a decision to weaken the abilities of the Siphon Life Spell, a key skill of Bueterin’s beloved Warlock character.

This incident deeply frustrated Buterin, who felt powerless against the centralized authority of the game developers.

He had invested considerable time and effort into developing his character, only for the developers to effectively diminish his character’s powers at a stroke.

The lack of recourse or ability to challenge this decision made Buterin actually aware of the limitations of centralized control.

It was an experience that would stick with him, eventually influencing his decision to develop Ethereum.

Buterin wrote, “On that day I realized what horrors centralized services can bring”.

China shut down

Here comes another WoW moment,and not in a good way. The sudden shutdown of Blizzard’s games in China in early 2023 was a shock that underscored the vulnerabilities inherent in centralized gaming systems.

Millions of chinese players lost access to popular games like the World of warcraft franchise, marking the end of a two-decade partnership between Blizzard and NetEase.

For many people, this was more than just an inconvenience; it was a devastating loss of a cherished pastime, a community and a virtual home.

Aboveall, the tense parting between the two companies highlighted the impact that business decisions and contractual disputes at the corporate level can have on players.

The decisions made by the Blizzard and NetEase affected millions of gamers who had no influence over the outcome.

In a decentralized gaming world such shutdowns could be avoided. Games could operate independently of licensing agreements or individual companies ,and players would retain access to their games.

And characters too, regardless of corporate disputes or business decisions.

Chiefly, Blockchain’s inherent transparency ensures, that players are never left in the dark about the state of their games.

With blockchain, players could truly own their gaming assets and experiences,leading to a more resilient, player-empowered gaming industry.

In traditional gaming, the assets players earn or purchase are stored on a company’s server governing the game’s terms of service.

Despite players investing time,effort and often money into acquiring these assets,they do not truly own them.

Any change in the game’s policy, a server shutdown,. or even a ban can lead to players losing their assets.

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What are Compelling Alternatives offered by Blockchain gaming?

First, in-game assets are tokenized by storing on the blockchain. This means that players have actual ownership of their assets they can hold, transfer, sell or even lend their in-game items freely.

Without needing permission from the game sense of reward and motivation for players, recognizing their investment in the game.

Second, blockchain gaming also introduces the concept of portability. Currently, in-game assets are confined to the game they were obtained in.

You can not take your powerful sword from one RPG and use it in another. However, with blockchain, in-game assets could become interoperable. This means that a weapon or character acquired in one game could be used in another.

Third, in a traditional gaming environment, trust is placed in the game developers and operators to ensure fairness.

Gamers play by applying rules consistently, and there by outcome of their actions gets fair.

However, this is not always a certainty. With centralized control, there is potential for manipulation of game outcomes,opaque decision-making or even unfair banning of players.

This where the blockchain can step in to dramatically enhance the trust gamers can have in the games they play.

Chiefly, this technology can leverage the inherent transparency and immutability of blockchain, games can provide mathematical proof that each outcome within the game is fair, and has not tampered with.

In a blockchain-based game, the mechanics that determine outcomes (like the roll of a dice, the draw of a card,or the spawn of a loot box) governed by smart contracts.

Which are open-source and visible to all. When an outcome is generated ,it is recorded on the blockchain,creating a permanent,immutable record.

This means that every player action, game outcome,and transaction is verifiable by the player.

If the rules of the game are pre-programmed into a smart contract,they can not be changed arbitrarily.

This ensures, that the game rules remain consistent and transparent, and players can verify that they are not cheated.

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What Benefits Blockchain Gaming does offer?

a.Security

Designing of Blockchain technology is secure, making it difficult for hackers to steal or counterfeit in-game assets.

b.Transparency

These games are transparent, meaning that players can see how the game is programmed and how transactions are processed. This can help to prevent fraud and cheating.

c. Greater Player Ownership

These games give players true ownership of their in-game assets.

This means that players can trade or sell their assets on secondary markets, or even take them with them to other games.

d. Decentralization

Chiefly these blockchain games are decentralized, meaning that they are not controlled by a single entity. This can make them more resistant to censorship and manipulation.

e. Play-to-earn

These play-to-earn games are blockchain games where players can earn rewards for playing the game. This can be done by completing quests, winning battles, or trading in-game assets.

f. Fairer Gameplay

These games are often more fair than traditional games, as they use algorithms, to ensure that all players have an equal chance of winning.

g. New Gameplay Possibilities

This technology can enable new and innovative gameplay possibilities,such as player-owned economies and decentralized game development.

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However, Blockchain Gaming also has some Potential drawbacks.

a. Complexity

This technology can be complex, which can make it difficult for developers to create blockchain games.

b. Cost

The cost of developing and running blockchain games can be high.

c.Energy consumption

The mining of cryptocurrencies and other blockchain applications consumes a lot of energy. This can be a major environmental concern.

d. High Entry barrier

These games can be more expensive to develop and maintain than traditional games. This can make it difficult for small developers to create blockchain games.

e.Regulation

The legal status of blockchain gaming is still unclear in many jurisdictions. This can make it difficult for developers and publishers to market and distribute blockchain games.

Popular Blockchain Games

Axie Infinity– Ot is a Pokemon-inspired game where players can collect, breed, and battle digital pets called Axes.

The Sandbox – This is a game where players can create, own, and monetize their own experiences.

Decentraland – It is a virtual world where players can buy land, build structures, and interact with each other.

Gods Unchained – Gods Unchained is a trading card game where players can collect and trade digital cards.

Splinterlands – It is a collectible card game where players can battle each other using their cards.

Blanklos Block Party – This is a 3D open-world game where players can collect, customize, and race their own Bank Los. These are NFTs, so players can own them and trade them with other players.

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The development of Blockchain Gaming depends on what Factors?

a.The maturity of blockchain technology

It is still in its early stages of development, and there are a number of challenges that need to be addressed before it can be widely adopted in gaming. These challenges include scalability, security, and user experience.

b. The availability of high-quality blockchain games

There are a limited number of high-quality blockchain games available at present. As more and more developers create blockchain games, the quality of these games is likely to improve.

c. The level of user adoption

The success of blockchain gaming will depend on the level of user adoption. Players need to be willing to learn about blockchain technology and how it can be used in gaming.

d.The regulatory environment

This kind of environment for blockchain gaming is still evolving. In some jurisdictions, there are no clear regulations governing blockchain gaming.

This can make it difficult for developers and publishers to market and distribute blockchain games.

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What Factors are likely to Affect Blockchain Gaming?

a.The development of new blockchain protocols and platforms

New blockchain protocols and platforms are being developed that are designed to address the challenges of scalability, security, and user experience.

These new platforms are likely to make it easier for developers to create and players to enjoy blockchain games.

b. The growth of the NFT market

The growth NFT market is likely to drive the development of blockchain games. NFTs can be used to represent in-game assets, such as characters, weapons,and land.

This allows players to own their in-game assets and trade them with other players.

c. The increasing popularity of play-to-earn Games

These games are games where players can earn real-world money by playing the game. These games are becoming increasingly popular, and this is likely to attract new players to blockchain technology.

d.The development of decentralized game engines

These game engines are built on blockchain technology. These engines allow developers to create games that are more secure, transparent, and fair.

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How the Asia has the Massive Potential for the Adoption of Web3 Games and Blockchain

Asia has been a prominent player in the gaming industry for some time. Thereby, generating a significant amount of the world’s gaming revenue.

One study has uncovered that Asia is home to approx. 55% of the World’s blockchain gamers. And these users generate roughly 52 % of worldwide annual revenue in the GameFi sector.

Mainly,, after games like Axile Infinity became popular in Southeast Asia and STEPN found dedicated users in Japan, many people in Asia experienced blockchain games.

It’s gaming market is promising and it continues to grow. Due to its dominance in the gaming sector, many are predicting Asia to become a blockchain hub.

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What factors will be responsible for Adoption of Web3 Games & Blockchain?

The success of blockchain games is crucial to ensure the adoption of blockchain technology globally.

The Web3 gaming sector accounts for half the entire blockchain industry. Looking forward, Asia has massive potential to become the driving force of the worldwide adoption.

The report by DappRadar has further emphasized Asia’s influence on the gaming sector. Sharing that over 40% of gamers in Japan are aware of blockchain gaming.

Moreover, 57% of them have a positive impression of blockchain gaming. The report also predicts the region will continue to dominate the Web3 gaming ecosystem.

This is not just due to Asia having the highest quantity of gamers but also world’s biggest gaming cause it is home to the World’s largest gaming companies.

Most of the world’s biggest gaming companies are based in Japan, South Korea, and China.

The region already has the largest gaming markets on earth,and traditional Web2 giants are showing interest in and experimenting with embedding Web2 components.

For example, Square Enix is moving into Web3 with Symbiogenesis, a gamified collectible experience.

Other gaming giants are embedding blockchain into their games and creating Web3 games too.

Nexon Group, a multi-billion dollar gaming conglomerate based in South Korea is creating a blockchain version of its popular game MapleStory.

Sony also has dozens of Web3 and NFT gaming patents. Asia has a rich history of embracing new technologies that have transformed the gaming sector too.

South Korea, for instance, has historically carried the flag for the adoption of free-to-play games.

Mobile Gaming

The popularity of mobile gaming in Asia is already well recognised, it is taking over console and PC games. Half of the top 10 mobile-specific gaming development companies are based in Singapore, China and Japan.

Thereby, further illustrating that Asia is already a leader in consumer adoption of this kind of technology. Mobile penetration continues to be on the rise with no signs of slowing down.

And mobile is expected to bring in an even bigger audience than ever before in the future. This kind of gaming is primed for the advantages that Web3 offers.

China is ranked first,followed by Japan at third, and South Korea at fourth in smartphone game sales.

Even though both South Korea and China have regulations. As a result, they have excellent potential for in-game purchases.

The move to blockchain gaming is only natural for Asia as the market is already so accustomed to these kinds of games.

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Rising Interest and Support for Blockchain Technology

Japan’s Prime minister ,suggested that blockchain technology might be able to address some of the country’s current technological problems.

He said the Japanese government could utilize elements such as non-fungible tokens(NFTs),and Decentralized Autonomous Organizations (DAOs) to promote “Cool Japan” and revitalize regions.

This strategy signifies a mandate embracing decentralized technologies,such as NFTs and the Metaverse. As a primary area of business interest for the country.

Hong Kong is also positioning itself towards the cryptocurrency industry. Thereby, creating a dedicated Web3 marketing fund, legalizing stablecoins,and opening up asset trades to retail investors.

Additionally, Beijing has released a white paper, dubbed “Web3 Innovation and Development White Paper”,which is all about ‘Internet 3.0’ and the metaverse Web3 gaming is one of the most invested in verticals.

And many new AAA titles are expected to release. Embedding DAOs and moving away from Web2 to Web3 are some of the trends shaping the future of gaming in Asia. With Web3,it is easier to create gaming communities in Asia.

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Gaming Community Building

In today’s fast paced world,gaming has the potential to connect us with others and establish a community that is, unfortunately, lacking in many of our lives.

With a large user base, forming these communities becomes more straightforward because players share a lot of common interests.

For Web3 games,community building is vital and having this of kind o environment is highly important.

This is particularly the case in Japan, where games that promote teamwork and collaboration rather than competition are very popular.

Hit games such as Monster Hunter ensure players cooperate to achieve their goals. And users join forces to defeat a big boss,and these elements are very common in Japnese smartphones games.

It is also important to note the ‘Gacha culture” ,which is heavily focused on the idea that users must be willing to spend money for a blockchain game to succeed.

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The Path to Success of Blockchain Gaming

Most users currently spend money on blockchain games as an ‘investment’ in the hope they will see it grow.

The key to a successful blockchain game is to entertain these users who are ‘investing’ into ;consumers’ .

To truly aid this transition ,blockchain games must be more than a means to invest. In other words, the games must be fun to play for users.

First, we need to give players both entertaining and rewarding experiences. The key to this success lies in combining the best of conventional Web2 games with the unique advantages of blockchain games.

Second, implementing more sustainable models will drive greater embracement of NFT technology and Web3 gaming across the sector.

Essentially, Asia has huge potential in transforming investment money into consumption and launching money intounching a series of blockbuster titles.

Regulations

However, it is essential to ensure the games comply with the laws of each country. It is a complex regulatory landscape. Since Web3 gaming combines elements of NFTs ,cryptocurrency, and blockchain technology.

It brings about new challenges for governments and regulatory bodies. For instance, in several Asian nations, regulations surrounding cryptocurrency use are subject to stringent restrictions and continuously evolving.

Therefore, these constraints can potentially impede the expansion of Web3 gaming in asia and,therefore, worldwide adoption.

The South Korean judiciary also ruled against a play-to-earn game recently and the court maintained that the game’s NFT inspired speculative behaviours.

As a result, this blocked the game’s release and highlights the potential challenges Web3 games could encounter in Asia.

It is evident Asia will play an important role in driving the adoption of blockchain gaming in the years to come.

South Korea and Japan have already started to pave the way, and the gaming industry is constantly evolving.

Asia is well-placed to truly be a hub for Web3 and blockchain gaming.

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Conclusion

The blockchain gaming industry grew 2,000% in the past year and has attracted $2.5+ billion in investments. People are fascinated by the idea of putting durable in-game assets on a blockchain.

For players, items they acquire will now be tradable for monetary value. For game companies, their assets become persistent platforms on top of which other developers can build experiences.

However, while these concepts are exciting, the space is young and it comes with its own challenges.

It will take time for the gaming industry to fully understand and address the existing issues such as the potential for hacked wallets, crypto’s volatility and potential environmental impact.

Additionally, the prevalence of crypto whales as the blockchain technology is still in its early stages.

It’s not about saving the game,its about shifting the paradigm to give the power back to players. And that’s a game worth playing.

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