transformation could introduce radical changes to the way players experience
the games they play. It also stands to enable a more lucrative rewards system
within games and, by extension, evolve video gaming from a primarily
recreational endeavor to one that offers real financial compensation to
Traditional In-Game Coins
before the blockchain revolution spawned massive interest in digital
currencies, video game developers were integrating digital coins into their
Warcraft” allows players to earn virtual gold, which can be used to purchase
items within the game. The online edition of “Dungeons and Dragons” offers
electrum and platinum currency units. “Pokémon” players can trade in “Poké
Dollars.” Recently, Microsoft announced the introduction of a new
in-game currency for “Minecraft,” called “Minecraft Coins,” which can be used
to purchase features within the game.
just some examples. Wikipedia offers a much longer list of in-game currencies.
similarity between digital currencies within video games and blockchain-based
cryptocurrencies is limited. However, both categories of currency share the
core characteristic of enabling users to purchase assets — whether physical or
virtual — using currency that is not dependent on traditional financial
institutions and whose value is determined independently of fiat currencies. In
this sense, currencies within video games served as a precedent for the
cryptocurrencies of today.
In-Game Economy Limitations
Yet one crucial
difference sets in-game currencies apart from cryptocurrencies: The extent to
which in-game currency can be used to purchase goods and services in the real
world is very limited.
handful of cases, video game companies have experimented with attempts to
increase the real-world value of in-game coins by making it possible to use the
coins to purchase items that are external to the game. The game developer Blizzard
has begun accepting “World of
for purchases within other games that it sells, for example. “World of
Warcraft” gold can also be used to pay for subscriptions to other games.
In-game currency exchanges also exist. They allow users
to trade in-game coins for fiat currency, in a fashion similar to
cryptocurrency exchanges like Coinbase or Kraken.
the extent to which in-game economies can be integrated into the real-world
economy is still limited. Most games don’t offer the ability to purchase
external items using in-game coins, and those that do provide very limited
external purchasing options. In addition, although in-game currency exchanges
make it possible to trade some in-game coins for real-world money, only the most
popular games are supported and there is no guarantee that sellers will be able
to find buyers for their in-game currency.
On top of
this, fraud is widespread within video game economies,
which makes trades risky.
the above mean that in-game economies remain mostly isolated from the real
world. Except in limited cases, players who earn in-game coins cannot reliably
or securely transform their earnings into something that holds value in the
Blockchains, Cryptocurrencies and Out-of-Game Economies
cryptocurrencies provide several crucial features that game developers could
leverage to bridge the chasm between in-game economies and the real world:
digital currencies, most cryptocurrencies can be easily integrated into
any game without having to rely on financial institutions to process
major cryptocurrencies are designed to support any kind of transaction.
Their usability is not limited to specific contexts, such as one
application platform or one game.
recording transactions on the blockchain, crypto payments significantly
reduce fraud risks.
advantage of these features, gaming companies could replace traditional in-game
currencies with cryptocurrencies, which are much more readily usable in the
are already underway to use blockchain-based cryptocurrencies in this way. Some
of them are the work of startups in the blockchain ecosystem, such as DMarket, which aims to create a
universal cryptocurrency for use within video games. Tap
Project has a
other side of the industry, at least one enterprise video game company is now
experimenting with blockchain-based payment systems. Ubisoft recently announced research projects in this
vein, although the company has so far offered few specifics about what it might
has also reported that Jeff Burton, a co-founder of Electronic
Arts (EA), is working with the blockchain educational startup BitDegree. That
does not mean that the gaming company is necessarily interested in
cryptocurrencies, but it’s a sign that blockchain technology is likely to be on
developers from multiple gaming companies to sign onto universal gaming is a
major challenge. It is also unclear whether a blockchain-based initiative from
a single enterprise gaming company, like Ubisoft, would be able to transform
the entire industry.
the opportunity for blockchain-based currencies to transform the meaning of
in-game economies for video gamers is clear. As with many cryptocurrency
initiatives at present, the major challenge lies in creating solutions that
achieve widespread adoption; the solutions themselves are easy enough to
envision and implement.