Quite apart from the banking industry which was obviously going to be the first to have major changes in the aspect of payments, one of the best conditions that it has to adopt cryptocurrencies is the videogame industry. Why? Check out below.
Why? Because all purchases are online and these payments need to be very fast to process, just that is one of the main characteristics of cryptocurrencies.
Now let’s see, is it really worth the effort?
Development of the Videogame Industry
The gaming industry is no longer a niche arena for a certain age group or consumer segment that few people interact. With the advent of mobile gaming and improvements to hardware and software used in playing these games, gaming has become a very profitable form of entertainment for players from all backgrounds and ages. This switch to the mainstream has also meant an increase in revenues generated by the industry with about US $9.5 billion generated in the United States in 2007, 11.7 billion in 2008 and 25.1 billion in 2010.
To understand competition in this industry, it is important to understand the economics behind the consoles. This need then leads to more innovation, investment, and cutthroat rivalry to lead the pack.
Nowadays, the industry continues to bring in revenues and impact the economy with games such as Call of Duty: Black Ops bringing in $650 million in sales within the first few days of launch. The global video game market is worth $93 billion.
Here is a very illustrative chart where you can see that there is a downward trend in the package market and an upward trend in DLC (downloadable content) market.
So yes, it really worth the effort to make cryptocurrencies can integrate to videogames as a payment alternative.
After showing this information, now let’s take a look at the types of profit models that videogames companies have been working with:
Gaming’s Profit Models Will Fit Into Crypto Micropayments?
Of course, it will and I’ll tell you why:
A market study conducted by LendEDU last year revealed that, of a thousand players who spent between six and 10 hours playing a game of their choice, almost 69% of them made use of micropayments, with each individual, on average, spending $ 84.67 in the game.
Another fact is that the gaming industry belongs to mobile gamers who spent a staggering 51 billion dollars with Asian players being responsible for 70% of the global revenue for digital game sales.
In this market study also demonstrate shows how predisposed video game developers are to implement cryptocurrencies micropayments:
The highest generating revenue titles in PC gaming are the free-to-play ones like for example League of Legends, Dungeon Fighter Online and CrossFire which have the podium seats respectively. But how do games you do not have to pay for providing 69% of a 33 billion dollar market share?
Microtransactions Are The Future: How Come?
See, in 2017 F2P (free-to-play) games made a staggering 22 billion dollars in revenue, whereas PC and console games only earned 13 billion dollars. The difference is significant and purports to the fact why game producers are more eager than ever to implement micropayment systems. Here is a video that explains it in other words.
What Makes Micropayments a Perfect Payment Alternative for Gaming?
When players invest money in their gaming efforts are given access to more powerful equipment, additional skills or better characters to make the players more excited a competitive in the game.
Mobile games are the more enthusiastic adopter of micropayments because they give users only two options, either spend long hours playing a game or pay a small fee for an in-game currency tokens and buy upgrades, boxes or extension packs, schematics or upgrades you buy will make you indestructible or give you an upper hand over the non-paying users.
In addition, the market study also said that almost 40% of the respondents have used microtransactions for the first time while playing Fortnite. As a side note, when Fortnite Mobile launched a closed beta for iOS, it was downloaded 11 million times, earning 100 million dollars over the first 90 days.
Analyzing these trends in payment types, it is completely natural that video games can allow cryptocurrencies (with greater ability to pay quickly) to enter their virtual world.
Now, of course, not everything is perfect about micropayments, here is a list of things to consider. Take a look at this video which talks about regulations on videogames.
Micropayments: Deficiencies and Advantages
A micropayment is a commercial transaction that involves an extremely small amount of money, which generally ranges from several cents to a few dollars. Within this structure, there is a large number of business models (prepaid, postpaid, pay for use, etc.) that gaming companies use quite frequently to attract more money from their clients:
Popular titles such as FIFA, Fortnite, and NBA2K have successfully used the microtransaction structure in the last decade. For example, even though Fortnite is a free video game, it was able to generate a whopping $2.4 billion in revenue for its publisher, Epic Games, last year. If that were not enough, a recent study by Juniper Research indicated that in-game transactions are expected to exceed the $ 160 billion mark by 2022.
Advantages
A positive example is this: Fortnite’s cosmetic microtransaction system has been very well received by game fans, as it allows users to unlock new masks simply by playing for longer, without paying anything.
This example shows that it’s not necessary to make a payment to have determined new items, you can pay it with your time which means a guarantee of loyalty to the game.
Deficiencies
A recent controversy that came up when a Reddit user by the name of MBMaverick claimed that, even after buying the latest EA Star Wars Battlefront 2 title, he still had to pay a whopping $ 80 to unlock Darth Vader, one of the series’ more central and iconic characters.
This example shows that developers can’t be so profitable to the point of making the player feel punished. The main thing is to put yourself in the player’s shoes. Here is another video that explains the complete evolution of microtransactions:
How Will Cryptocurrencies Get Integrate With Videogames?
Did you know that In 2017, Steam and Twitch were the first renowned platforms that allowed their customers to use Bitcoin and Bitcoin Cash? However, due to the volatility of this nascent asset class, Steam soon disabled its support for cryptocurrencies. These were the first efforts to integrate crypto but it wasn’t enough.
Regarding the integration of cryptocurrencies to games, I think there are three questions that developers will ask themselves:
- What is the cryptocurrency whose blockchain supports the most transactions per second?
- The blockchain of that cryptocurrency can be technically coupled to the characteristics of our video game?
- How much is it’s price and how it has developed over time? and many others.
For all these reasons I think it’s very important that every gaming company can launch a crypto department for an exclusive focus on integration with cryptocurrencies that are worth exploring it.
On the other hand, there are some initiatives that have already become popular among the gamer community and that charge in cryptocurrencies:
- Bitrefill: Bitrefill is a platform that allows its customers to buy a wide range of gift cards for online gaming services, such as Steam, Xbox Live and Blizzard’s Battle.net, using Bitcoin.
- Gipsybee: This platform allows the purchase of hardware for games, such as wireless gamepads, video game consoles, VR headsets and much more. The platform currently accepts Bitcoin, Ether and Bitcoin Cash as payment methods.
- scan.co.uk/: This is an excellent place for cryptocurrency enthusiasts who want to buy on professional gaming hardware, such as niche graphics cards, gaming PCs, RAM cards, DIY water cooling systems, game chairs, GPUs, etc. In addition, it is important to mention that some of the brands whose products are available on the platform include Corsair, Nvidia, 3XS, and Intel.
Conclusions
I have the conviction that the true integration of cryptocurrency micropayments within the games will be very intuitive where you will previously link the virtual wallet to the console system and when you are inside the game, with the push of a button you can make instant payments without commissions. Get ready because this will be huge.
Can you imagine the immense positive impact that will have the adaptation of hundreds of millions of people using cryptocurrencies in a short time? It will be an overwhelming domino effect that will not turn back.
Disclaimer: The opinions and views expressed in this article are solely those of the author and are not necessarily shared by Coinspeaker. We recommend you conduct the necessary research on your own before any investment and trading move.
Victor Delgado is an industrial engineer with 7 years of professional experience. He has always liked technology issues a lot and since he discovered bitcoin and all related topics, his curiosity has aroused like never before. He considers himself as a very responsible person, he likes to discover things and learn something new every day.