The game industry and crypto

This text was written by Manuel Valentine, director of research at Coin house

The video game market is today the leading industry in leisure spending, for example, way ahead of the cinema. So we can rightly ask whether this market will become close to that of crypto assets. Let’s take a closer look at the arguments for and against this development.

First of all, it is important to distinguish between two main player profiles. On the one hand, there are PC or console gamers, mostly young men but not exclusively, who focus on graphically advanced games with a high degree of difficulty – we can think of the Call of Duty series, for example. On the other hand, there are mobile gamers, with a more diverse profile, who focus on simple games to pass the time – Candy Crush Saga for example.

Even if some players can match both types of profiles at the same time, we are usually dealing with well-separated populations, and this is also the case with their consumption habits.

This dichotomy is most pronounced in the type of purchases these players make: in the context of video games for mobile phones, it was established early on that microtransactions are perfectly acceptable: a player who is stuck in a difficult level or simply wants to go faster, can buy , for a few euros, something to unlock the progress.

In fact, many mobile games are built to frustrate players with progressively slowing progress in order to trigger these purchases, which are ultimately the main source of revenue for developers.

In the world of classic video games, these methods have not been accepted to this day. Players expect to buy the game and pay no more, except for substantial evolutions of the latter. Paying to make your character evolve faster is frowned upon and considered cheating by other players.

The only exceptions to this rule are the decorations (skins) of the character and his weapons, for which a certain number is willing to pay, for example in Fortnite.

And that’s a good thing, because when we think about the relationship between video games and crypto assets, one of the first ideas that comes to mind is NFTs. It wouldn’t be too difficult to convert the current clothes that players exchange into NFT, via a marketplace like Opensea.

But the interest is rather limited, as these accessories usually cost little money, and the real interest of an NFT would be to be able to use it in various games. However, if we can consider that several games from the same publisher such as Ubisoft, quite advanced in this area, can become compatible with the accessories of the characters, the collaborations between publishers are almost non-existent.

The few attempts to push microtransactions into the realm met with stiff resistance from players, especially in cases where they delivered substantial advantages over others.

Conversely, in mobile video games, these resistances do not exist and players are used to this concept. It is therefore a priori easier to design a game that has a direct relationship with crypto assets. So it’s no wonder that, for example, the most successful blockchain-related game, Axie Infinity, is a game made on mobile.

What kind of proposal can we come up with in this case? The current model of mobile games can be easily adapted so that players can pay with crypto assets instead of euros. However, keep in mind that platforms such as Google and Apple earn commissions on trades. They would therefore not welcome players who use an alternative payment method that would lower their commissions.

Read by the same author: Ethereum: what are the challenges of the arrival of PoS for this blockchain?

More generally, such a development would only be interesting if players have the option to use the same currency on different games, otherwise they might as well continue to use euros.

Latest development on the market: play to earn games. Axie Infinity has already been mentioned and this model is spreading relatively quickly. The only problem is that the rewards paid out to players are in the form of crypto assets created by the platform that runs the game. So there is a constant dilution in the value of the distributed tokens, and we can bet that in the long run, their value will logically lean towards zero. No earning game to date has struck the right balance, which would require the payouts to come from the losing players, for example.

Moreover, if we introduce the concept of winning into a game, players will quickly adopt the strategies that are recognized as winning. Then we move away from the idea of ​​play as leisure.

The use of crypto assets in the field of video games is therefore currently quite limited. Between the strong resistance of traditional players and the lack of interest that may exist in the field of mobile games, the model is still very young and in search of itself: latest development to date: games in move to earn like STEPN, which are similar to the Pokemon Go model, with a notion of profit. But where there would be real interest would be in collaborations between different games or studios, and the industry hasn’t moved in that direction yet.

Only big positive: players are usually tech savvy and are quick to adopt new technologies like crypto assets. So we can be sure that if interesting and paid applications emerge, they will be able to adopt them relatively easily. Finally, the development of metaverses could rearrange the cards: universes such as Decentraland and Sandbox allow for the creation of video games within their platforms, we would then have a perfect opportunity for the convergence between video games and cryptos.

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