Blockchain and NFT: a push towards decentralised gaming


Introduction

Out of the 3.32 billion active gamers worldwide, generating a total revenue of $282.30 billion USD, over 47% invest their money in purchasing in-game currencies and assets, bringing in nearly $100 billion USD in annual revenue for the industry. The concept of owning digital assets in the gaming sector is a transformative notion that radically changes users’ relationship with their items. In this context, assets can include currencies, equipment, characters, and virtual lands, providing great value to players for various reasons, not only helping them win but also expressing belonging, class, status, and identity.

Centralized Video Game Industry: Not Owning What You Buy

However, there are serious problems plaguing the market, rendering virtually every related expense futile. Players may pay thousands of dollars to purchase virtual assets and still not actually own anything, as the system is centrally controlled by a few large organizations that decide who holds what and where. The market is in the hands of third parties that dominate everything, controlling games, virtual goods, and currencies ontologically.

In traditional video games, these assets are usually tied to their game environment, being controlled by developers or publishers. Users can access them, but they are not true owners. This leads to severe and costly consequences for traditional players, who cannot transfer them to others outside the gaming environment, nor sell them for real money or keep them if the game is shut down. Due to their relentless connection to it, in fact, the digital assets in question do not persist if the same game ceases to exist, undermining players’ trust in their actual value, discouraging significant investments.

The gaming industry has long been characterized by centralized control, with developers holding absolute power over the creation, distribution, and monetization of virtual assets. In fact, the concept of digital ownership is difficult to interpret. When we buy a game from the PlayStation Store, we are not so much purchasing a title as receiving a license to play it. In the terms and conditions governing the relationship, nothing prevents Sony from giving three months’ notice and withdrawing the game from players’ libraries forever.

Horror Stories from In-Game Stores: Examples of Legalized Theft?

An illustrious example is represented by “P.T.”, or “Playable Teaser,” cited as one of the best horror games ever made. A digital production by the renowned Hideo Kojima, in collaboration with Oscar-winning director Guillermo del Toro, was removed from online stores and is now considered a true multimedia “cult” work, lost forever. Globally launched on August 12, 2014, on the PlayStation Network, P.T. served as an interactive teaser for the video game “Silent Hills,” a new chapter in the Silent Hill series initially scheduled for 2016 but later canceled. In April 2015, Konami removed it from the PlayStation Store and disabled its installation. This choice has generated numerous criticisms, sparking the ire of fans and inspiring the creation of several unofficial replicas.

Now even Ubisoft, following controversial statements from their subscription director Philippe Tremblay, who claimed that consumers should get used to the idea of “feeling comfortable not owning their game,” removed 10 titles on January 25 of this year, shutting down their servers, making entire game modes completely inaccessible and effectively lost forever. This leads to devastating consequences for those concerned about the “historical” preservation of video games, but pales in comparison to the potential loss of online assets by the involved players.

Recently, Sony has also given us a taste of the same medicine, making it impossible for users to watch purchased Discovery content, removing them from their libraries on December 31, 2023, due to “content licensing” provisions. In fact, the list of programs that suddenly disappear due to business agreements is very long, and the disappearance of content from streaming services is common. But in this case, people have lost access to programs they actually bought to watch on demand when they wanted.

Then, in the moments following the incident, many users were unexpectedly banned from their PlayStation Network accounts, meaning they were not only blocked from multiplayer games or cloud streaming but also excluded from all digitally acquired games on Sony’s market. Affected users, who may have spent years building a robust digital library, suddenly found themselves deprived of access to purchased content, with no fault of their own.

The rapid decline of physical media and the digital sector’s adoption of subscription services mean that the world as we knew it is being left behind. Unfortunately, large corporations still hold most of the cards when it comes to accessing the media we love. We rely on licenses that can be withdrawn at any time and on hardware that will one day cease to function unless someone, in some boardroom, decides to care about it.

Blockchain, GameFi, and NFTs Redefine the Concept of Digital Asset

However, the advent of blockchain technology has introduced a paradigm shift, emphasizing decentralization and democratic ownership as key principles of a new gaming ecosystem. Blockchain, GameFi, and NFTs are reshaping the gaming landscape, giving players real ownership of their digital assets because, unlike the examples mentioned above, blockchain-based assets actually belong to the player. The distributed ledger of the blockchain records the creation and ownership of these assets, and such a ledger is visible to everyone, completely transparently, permanently independent of any central authority. This distinction means that players finally have absolute control over their assets.

Blockchain serves as the foundational technology underlying this decentralized revolution in the gaming industry. Unlike traditional centralized models, where game assets and transactions are stored in databases controlled by developers, blockchain introduces a public distributed ledger that is immutable, transparent, and secure. This eliminates the need for intermediaries, ensuring that game data is tamper-proof and accessible to all participants.

One of the most significant advantages that blockchain brings to gaming is the concept of “True Ownership.” As seen, in traditional setups, players can spend considerable time and resources acquiring in-game items, only to find that their rights are limited by terms of service. Blockchain disrupts this norm by allowing players to have verifiable ownership of their digital assets through smart contracts. These self-executing contracts facilitate transparent and irrevocable ownership, giving players direct control over their in-game possessions.

Decentralized blockchain protocols also facilitate interoperability, allowing players to seamlessly transfer digital assets between different games and platforms, extending their lifespan, utility, and functionality in case the original platform ceases to exist. This opens up new possibilities for cross-platform gaming experiences, allowing users to retain and leverage their accumulated assets in different virtual environments. The decentralized nature of blockchain ensures that these transactions are secure and transparent, promoting a more open and collaborative gaming ecosystem.

For example, Non-Fungible Tokens (NFTs) have garnered particular attention as unique and indivisible tokens representing real ownership of digital or physical assets. In the gaming industry, NFTs have emerged as an essential tool to authenticate and own in-game items. Each NFT is unique, ensuring that digital assets such as skins, weapons, or characters can be truly rare and belong to individual players. NFTs introduce the concepts of verifiable scarcity and rarity into the gaming world. Unlike traditional in-game items that can be reproduced infinitely, Non-Fungible Tokens provide a mechanism for developers to create limited editions or rare items. This scarcity, verified by the blockchain, adds intrinsic value to in-game assets, creating a market that allows users to buy, sell, and trade these unique digital properties.

NFTs empower players by allowing them to control their in-game assets and participate in the broader digital economy. Users can truly own and trade their NFTs outside the confines of a specific game, fostering a player-centric economy that transcends individual platforms. This ownership extends beyond the game itself, creating a new paradigm where gamers become the true stakeholders in a larger ecosystem of digital assets.

The “Return to the New World” of gaming: blockchain and the modern decentralized paradigm

The return to the new world of gaming is closely tied to the incorporation of blockchain technology and the adoption of the modern decentralized paradigm. In an era where centralization and control are increasingly contested, blockchain emerges as an innovative solution that revolutionizes the gaming landscape. This decentralized technology provides transparency, security, and authenticity to digital game transactions, allowing players to truly own their virtual assets. Moreover, decentralization opens up new possibilities for community governance, enabling players to influence crucial decisions regarding game development. The push towards decentralized gaming not only transforms the gaming experience but also inaugurates a modern era where community and technology collaborate to shape the future of the digital entertainment industry.

The convergence of blockchain, GameFi, and NFTs represents a powerful transformative force in the gaming industry, ushering in an era of decentralization and democracy. The distributed ledger ensures transparency and verifiable ownership of digital assets, while NFTs, with their ability to represent scarcity and verifiable rarity, empower players by providing them with actual ownership beyond the boundaries of individual games. As long as the gaming industry continues to embrace these innovations, players become full-fledged actors in the creation of the virtual worlds they inhabit. The revolutionary potential of blockchain, GameFi, and NFTs lies not only in subverting in-game economies but also in promoting a more user-centric and democratic ecosystem. The future of gaming is undeniably decentralized and owned by the players themselves.

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