What started out as an industry comprised of traditional offline media has now progressively changed into a multi-billion dollar industry. The last 5 years alone have seen the emergence of a range of new business, competition and forms of entertainment through the latest technologies and innovations such as Augmented Reality, Virtual Reality, Adaptive Artificial Intelligence and so on. As the industry has evolved to bring us the best in gaming, it has also brought many challenges and problems.

At the moment several challenges are being faced due to the centralised framework that is implemented by the online gaming platforms. Just to list a few:

1. The opaque and arbitrary Revenue Sharing Model
2. Troubles for overseeing Control of Assets
3. Cyber Attacks and Frauds

The blockchain is the shared electronic ledger underlying Bitcoin, a cryptocurrency, and Ethereum. It is the solution to the challenges faced by the Gaming Industry as it removes the need for third parties since it provides a gateway for secure registration and transfer of control. This, therefore, is applicable for online gaming as the technology has demonstrated its value as a transparent and dependable platform.

The opaque and arbitrary Revenue Sharing Model

In order for small studios and indie developers to maximise their publicity and sales for the games they develop, they are often forced to depend on intermediaries such as Steam, GOG and other major app stores. An extensive revenue cut is taken and a complex benefit model is offered. To add onto this frustrating process, a game developer’s earnings can take up to 60 days before it is received.

On the other hand, blockchain can create a sturdy platform for a transparent gaming economy. Since it lacks the need for an intermediary to authenticate or settle transactions, developers are able to be directly compensated by gamers for playing their games.

Troubles for overseeing Control of Assets

Virtual economies have been born due to the arrival of virtual assets which can be bought and amassed through in-game payments. In order to collect virtual valuables, players can spend a ridiculous amount of hours in gameplay and money. Special in-game items have resulted in gamers trading with one another but can often lead to fraudulent scams.

These game assets have been kept under severe regulation by the gaming companies themselves in an attempt to prohibit the illegal copies and deception. This consequently leads to a lack of gamer's control over the assets, which may value at thousands of dollars, outside the game. Once again, to make matters worse, the servers themselves have become targets of cyber-attacks!

Blockchain prevents double-spending, well actually, the blockchain itself does not prevent double-spending; instead, a confirmation process protects the blockchain until all transactions posted to the blockchain are verified. The blockchain becomes posted publicly and permanently once the transactions are confirmed. Therefore, by preventing the double-spending of crypto currencies, Blockchain has demonstrated its authenticity in maintaining legitimate control of the virtual assets without depending on third party intermediaries. Blockchain transactions are set in stone once they are publicly posted. This means they are more bulletproof against fraud and cyber-attacks as compared to the game companies’ crude but effective proprietary systems.

Summary

Blockchain could be the basis for new types of business models and video games. However, it is too early to decide, but a decentralised concept may well resolve most of the problems faced in the gaming industry. We have seen the impact this technology has shown in Fintech and Banking, only time will tell if blockchain will have a similar impact in the world of gaming!