Why Cryptocurrency and Video Games Make Such Great Partners
The idea of currency within a fantastical and vast video game realm is nothing new. In fact, it goes all the way to our favorite mustache-faced plumber plopping bricks with his head to get to the gold coins. Since then, it has evolved from that to multi-colored hedgehogs racing for gold rings, your personalized character farming gold in Azeroth, and using money to buy cosmetic items on your favorite battle royale.
The relationship between cryptocurrency and video games goes back a few years. In 2016, Steam, a video game distributor, began accepting crypto payments, effectively allowing users to buy games with Bitcoin. Unfortunately, Bitcoin payment services were discontinued the following year due to the volatility of the crypto.
In 2018, popular streaming service Twitch announced that they would allow their streamers to accept Twitch tips in cryptocurrency—namely Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC). The following year, a streamer named Sick_Nerd accumulated 46 various crypto coins in Twitch donations playing Runescape, which at the time was valued at around 73,000 USD. For a while, Twitch also discontinued crypto payments, but they eventually came around and started supporting it again.
Twitch and Steam are two of the biggest players in the gaming industry and if they’re willing to look into crypto payments, it could be a good sign that there’s a real case for integrating cryptocurrency and blockchain in video games.
But with crypto’s adoption slowly rising, we absolutely need to think about better ways to integrate these coins.
The emergence of microtransactions
Fast forward to today: it’s now clear that microtransactions have taken over the space in today’s gaming era—but what exactly are they?
Depending on the game being played, microtransactions can take on many meanings. Generally speaking, microtransactions are anything you have to pay extra for after purchasing the original game—whether that be cosmetics, in-game upgrades, expansions, etc.
Microtransactions have been part of the video game ecosystem for a while now. Still, if there was a turning point, it would be when Fortnite came onto the scene. By now, everyone should be familiar with the game—it’s a free-to-play battle royale simulator that makes money primarily by selling cosmetics. In 2018, Fortnite earned a whopping 2.4 billion USD and the record of “most annual revenue of any game in history.”
So, the way it works is people use their money to buy V-bucks (Fortnite’s in-game currency), then trade it in for cosmetics. People mainly buy V-bucks through traditional payment options such as credit or debit cards and gift cards. Let’s say you’re playing on a PS4. To buy V-bucks, you can buy PlayStation Network gift cards at your local convenience store and redeem them on the online store, adding funds to your PS account. Then, you can use the funds to buy V-bucks through Fortnite’s online portal.
You can see that there’s a way to integrate cryptocurrency into the process. For example, you can buy discounted gift cards with BTC on Paxful and then redeem those gift cards on the PS store. The same goes for other gaming platforms like Xbox and Steam.
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Although this is merely a replacement in the process, it already has the added benefits of discounts and eliminating the need to link a credit or debit card to your gaming account. Still, it can be better.
Further integrating cryptocurrencies and blockchain with video games
In our example above, inserting cryptocurrencies into the microtransaction process is the most obvious integration method. However, moving forward, there can be more hands-on and innovative approaches in integrating the two.
For example, by creating their own cryptocurrencies, game developers can cut their ties with external payment mechanisms. Let’s say there was a new massively multiplayer online role-playing game (MMORPG) called Paxfulfilled and it had its own in-game currency called Paxcoins, a gaming cryptocurrency. Players could convert their current crypto into Paxcoins using a dedicated payment portal and then use it to buy in-game gear and cosmetics. For the developer, it could give them more control and put an end to the hassle of regional pricing. For the players, it could be a more streamlined payment system with prices being measured according to the value of Paxcoins—in short, it’s likely to be cheaper.
Additionally, with the blockchain powerhouse backing the entire currency system, players’ items would be recorded on a secure ledger—protecting them from accidental erasures, technical problems, or bad servers. Suppose the developers of Paxfulfilled were to create more games. In that case, the blockchain could also be a new way of item and currency sharing between entirely different games, creating a new kind of gaming ecosystem. This means that in-game items could potentially take on the form and value outside the games they were originally made for, kind of like physical goods.
Besides adding a bigger bang for the gamer’s buck, cryptocurrencies are also incredibly secure and private. There have already been many instances in the gaming industry where large networks are hacked with users’ credit card information being leaked online and sold in underground markets. Cryptocurrencies provide a secure, private, and even transparent mode of payment that is unparalleled.
Not quite there yet
The relationship between cryptocurrency and video games is definitely promising. However, that’s really all it is as of now. Since it’s still relatively new and continuously developing, the tech still has its kinks in the armor.
For example, the delay between transactions being made and registered on the game is still at around ten minutes—something that gamers won’t be too happy with. Gamers are used to buying their cosmetics, items, and expansions within seconds despite the extra charges. Unfortunately, this delay is deliberate by design, which means it probably isn’t going anywhere any time soon.
Bright futures ahead
It’s easy to see that cryptocurrency has a lot to offer, especially in gaming. The tech could change the industry entirely if the more prominent gaming companies adopted it.
Right now, it’s at the point of experimentation and it’s already extremely exciting. As time goes on, it wouldn’t be a surprise to see more game developers exploring crypto options in this booming industry. It’s also no surprise that some of the biggest streaming services have already dabbled in it, like users being able to use Bitcoin for Streamlabs tips and donations, Twitch bits, and many more.
However, it’s still all on the horizon and we’re probably going to have to wait until significant changes are implemented. One thing’s for sure, though: we can’t wait to see what comes next.