How the Gaming Industry Uses Crypto?
Crypto Basics

How the Gaming Industry Uses Crypto?

1yr ago

One-third of the global population are gamers, while nearly 42 million of them owned crypto in 2020. Is this intersection going to grow, and if yes, at what rate?

How the Gaming Industry Uses Crypto?

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In 2019, the size of the gaming industry was around $152 billion, ready to grow at a rate of 9.17% between 2020 and 2025. Resultantly, the size is to become $257 billion by 2025. Any industry that expands quickly into such a size always assimilates trending technologies and the latest innovations. The gaming industry is no exception. In this article, we will review how the traditional gaming industry incorporates the multi-trillion dollars worth crypto market.

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Gaming Population is More Inclined to Own Crypto

One in every three persons living in this world is a gamer. Nearly 41.9 million gamers in the world owned crypto in 2020. Millennials were the largest demographic segment in this gamer population. 38% of the 41.9 million gamers who owned crypto were between 21 and 38 years old. Another crucial observation about the intersection area between the gaming and crypto industry is that 55% of the millennial gamers own crypto, compared to 5% of all millennials. It indicates that gamers are more into buying cryptocurrencies than others.
The Asia-Pacific region leads the chart by a considerably high margin when it comes to crypto-owning gamers. The geography has 22.6 million gamers that hold cryptocurrency, followed by 5.9 million in Europe, 5.8 million in the Middle East and Africa, 4.3 million in Latin America, and 3.3 million in North America. Following the popularity, Asia Pacific crypto gamers contribute the most in terms of revenue. Crypto-gamers in the Asia-Pacific generate 49% of the crypto gaming revenue, followed by North America (25%), Europe, Latin America, the Middle East, and Africa.

In terms of their platform preferences, the crypto gaming community likes mobile games the most. 40% of the overall revenue in crypto gaming comes from smartphone games, followed by Console Games with 28% of revenue. The other platforms, arranged in terms of their revenue share, include downloaded or boxed PC games, tablet games, and browser PC games.

Why Do Gamers Prefer Cryptocurrencies?

While the information cited above helps us understand the contours of the area where cryptocurrencies and gaming intersect, the real question is why gamers prefer cryptocurrencies. There are reasons why gamers want to leverage cryptocurrencies.
Nearly three-fourths of the online gamers are willing to exchange their virtual assets for a currency that they could leverage to buy and sell on other platforms. Cryptocurrencies empower players to collect and trade virtual assets. Crypto assets are exchangeable and tradable anywhere in the world. Overall, one of the crucial reasons for preferring crypto assets is that they offer a safe and easy medium to make money.
The revenue streams of the gaming industry are in the form of in-app purchases, in-app advertising, and affiliate marketing. It is easier to buy extra lives or custom characters using cryptocurrencies. Gaming platforms, on the other hand, often use cryptocurrencies as rewards. Players can watch video ads and fill surveys in exchange for which gaming platforms reward the participants with crypto.

Crypto Casino platforms are also adopting cryptocurrency payments and payouts, allowing digital asset holders to find a place where they can conveniently leverage their crypto holdings.

The Rise of the GameFi

A vital advantage of the advent of crypto technology in the gaming world has been the democratization of gaming. It has helped give back the control of the gaming experience and gaming benefits into the hands of the gamer community, breaking the monopoly of the game operator or the gaming platform owner company.

After the arrival of the blockchain and distributed ledger technology, video games can run on a crypto network by incorporating a completely or partially distributed ledger architecture. It empowers players with verifiable ownership over the in-game virtual products. Resultantly, as cited earlier, players can trade virtual products for cryptocurrencies, trading them, in turn, for real money.

Since ownership and control have come back to the hands of the players, crypto gaming has emerged as a profitable venture for the participants as well, not only the owners. Firstly, whenever a player buys an asset, the purchase increases the value of the game economy, which the player is a part of. Moreover, many companies have emerged that allow players to earn money by leveraging virtual products to accomplish in-game objectives.

NFT Gaming: Ubisoft’s Play-to-Earn Concept

Another popular sector to emerge among all these is the NFT gaming sector is play-to-earn. In NFT gaming, utility, armory, land, or any other asset can become an NFT. Becoming an NFT makes it convenient to own, transfer, and, most of all, sell on the blockchain. These gaming providers also equip gamers with marketplaces, where they can buy and sell their unique NFTs.
One of the key players to emerge in this sector is the French game developer and publisher Ubisoft, especially in projects based on the play-to-earn concept. Ubisoft has already invested in Animoca Brands which is a blockchain gaming company with plans to integrate blockchain technology into its future games. Ubisoft’s top executives believe that blockchain will enable more play-to-earn, enabling more players to earn and own content. It has also been working with lots of small companies to achieve its objective.
Finally, there came GameFi that mixes NFT collectibles with yield farming and other DeFi services. The GameFi stands for Game Finance, where new products and solutions help players collateralize their game assets to take loans or borrow assets to yield more.

In general, there are multiple reasons why crypto assets are gaining such traction in the popular gaming world.

The Benefits of Introducing Cryptocurrencies to Gaming

Cryptocurrencies remove bureaucratic and centralized authorities from every sphere. Removal of hurdles and intermediaries makes it convenient, seamless, and hassle-free for players to access their games quickly. Payment through cryptocurrencies also cuts down on the exchange time by being more instant, universally permitted, and efficient. Decentralization also helps game developers to sell their software outside app stores.

The use of borderless cryptocurrencies helps to do away with the security and exchange rate issues generally associated with mainstream international trade and payments. The players do not need to divulge their personal details, such as email id. It helps keep the player identity-less vulnerable. Being borderless and less identity-sensitive also helps withdraw funds faster from any location, without restrictions.

Safety and security are two crucial issues. Blockchain technology is known for superior trustless security. It helps prevent the illegal trading of assets and mitigates the risk of hacking and stealing keys through its immutable ledger technology and the elimination of key duplication.

Crypto payments involve no hidden fees or maintenance charges like credit cards, bank transfers, or other traditional modes of transfer. Resultantly, crypto payments are far more cost-efficient. Moreover, since the movement of funds is faster, it also saves on the time value of money. Decentralized finance is peer-to-peer. Therefore, it does not involve handling or exchange fees. Players make the most for their money by using cryptocurrencies as a medium of exchange.

All these benefits, combined with the technological potential that comes with blockchain, make the life of gamers easier. Moreover, the use of crypto helps turn gaming into a profitable exercise. The game developers get to interact with and reward their customers directly. Overall, the advent of cryptocurrencies in the gaming industry has been a win-win for all. One can reasonably expect to see more expanded use of blockchain in gaming in the days to come.

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