When Steam revealed in 2016 that it would start accepting Bitcoin, the gaming community realised something big was about to happen. Steam’s hegemony and reputation as a tastemaker not only compelled other gaming platforms to follow suit, but it also ushered in an era that a certain segment of the gaming community had long desired: seamless, stable, and anonymous payments in the gaming ecosystem.
It’s not surprising that Steam and its parent company, Valve Corporation, are interested in Bitcoin and blockchain technology. After all, Bitcoin and other cryptocurrencies are now accepted as payment by a the number of e-commerce companies across a wide range of industries. You can also pay for flights on Expedia or a couch on Overstock.com with Bitcoin.
Online gaming and cryptocurrency are natural bedfellows, with the latter having the potential to improve the former. Here’s what virtual currency’s ability for virtual gaming environments looks like.
Cryptocurrency Increases the Profitability of Indie Games
In the past, you could buy a video game by going to your nearest Game Stop — or, if you were lucky, a specialty store. Although developers continue to use the conventional retail model (a one-time charge for game access), their revenues continue to trail the modern freemium model. In 2018, traditional games brought in $17.8 billion. Free-to-play games, on the other hand, brought in $87.7 billion.
How can free games outperform blockbuster games that cost $80? They make money through microtransactions, which are small, regular payments for in-game experiences such as loot boxes. These transactions are made easier by cryptocurrency because it not only makes them seamless, but it also allows for peer-to-peer transfers rather than relying on a long list of middlemen. It also has the advantage of avoiding currency regulations, allowing developers to sell loot boxes without running afoul of regulators who consider the activity to be gambling.
In principle, microtransactions can make game production more lucrative, which is a welcome change for independent game developers, who are notorious for making little or little from conventional sales. The bottom line is that game developers will be able to make more money, and we will be able to get more and higher-quality indie games as a result.
Cryptocurrency Allows Global Gamers to Participate
Developing a game that makes money all over the world is perhaps one of the most difficult and costly challenges a developer faces. Despite what commercials might lead you to believe, accepting international payments is not as simple as accepting Visa or Mastercard. Developers must operate a payment processor that accepts both the card and the currency in order to appeal to gamers in Brazil, China, India, or South Africa. This isn’t really taking into account people who aren’t banked.
The solution is to build a game wallet that allows the consumer to make a big investment rather than repeatedly charging the card for each microtransaction, resulting in a single round of transaction fees rather than a hundred small ones. It does not, however, eliminate the need to be able to accept international card payment systems.
Since it eliminates the customer’s credit card from the equation completely, blockchain is changing the way we think about money. The user purchases Bitcoin and then sends it via the blockchain, which solves the problem and streamlines the method.
(Some) Cheating Could Be Prevented Using Blockchain
The growing acceptance of blockchain as a possible boon to security and the enhancement of user gaming experience is fueling interest in Bitcoin in the gaming environment, as it is in so many other cases.
Aside from the need to use it to run wallets and allow cryptocurrency payments in games, blockchain could also help developers combat cheating in online games and role-playing games. Cheating is common in online gaming, as any gamer knows; only 12% of gamers claim the issue has never affected their experience.
The use of blockchain to allow character and resource trading could make the game more transparent and prevent players with hacked skills and characters from gaining unfair advantages. Furthermore, according to Alena Burdock, managing director of Binary District, it could lead to safe (and legal) inter-game trading, which would open up a whole new level of gaming.
For Online Gaming Rooms, Blockchain Limits Fraud
When paying with a credit card, gamers/gamblers have the option of reporting purchases as fraud to their credit card business. Chargebacks are a common occurrence in the gaming industry. Users that successfully obtain a chargeback once are 50% more likely to do so again within 90 days, according to experts.
Gambling sites, in particular, suffer from chargebacks because when a gambler loses money, the money exits their account and the card issuer reclaims the funds from the developer. While the transactions are larger than those in video games, they are still a hassle for everyone involved. Currently, the best a provider can do is add a clause in the terms and conditions and close the fraudulent account, but only after the provider has lost money.
Since transactions are made on the blockchain, they are irreversible unless the merchant agrees to a refund and issues a new transaction. Customers profit as well; stealing a key is much more complicated than stealing a credit card number. It is possible to hack a wallet, but with enhanced protection, those who do so must be much more advanced than those who buy credit card numbers from data dumps. However, there are still tax and accounting problems that both casinos and players must consider before diving headfirst into Bitcoin gaming.
Bitcoin will be able to deliver bigger and better games.
As Bitcoin continues to move violently in both directions, the currency’s future may be overlooked — and the currency itself may fall short of even average standards. Blockchain, on the other hand, provides real solutions to some of the most serious issues in online gaming, such as hacking and theft.
Additionally, as the number of hours spent online gaming grows, gamers should expect to see more experiments on the part of developers, especially small businesses that don’t have the resources to hand over 5% of any transaction to various payment processors.