Blockchain games have become a hot topic around the world recently after the success of various cryptocurrencies such as Bitcoin. Thanks to this, many have noticed that blockchain has value in being used outside of simple currency trading and in the world of digital games. This has led to a number of game developers using the technology in their own games which are already available to download on smartphones. Gamers are familiar with digital assets that are available in games today and this makes the concept of blockchain games easy for gamers to understand.

Benefits of blockchain and blockchain games

Blockchain has a number of benefits both as a technology and in games. The data stored on the blockchain is available for anyone to see, secured using cryptography and verifiable by any individual. Being decentralised means that users are guaranteed ownership over the digital items that they obtain. This means that even if the company running the game goes out of business the item will still be owned by the user. Digital assets on the blockchain are also impossible to tamper with meaning that users can never have those items stolen. Another benefit is that blockchain technology can allow for extremely unique items in games that could allow for a user to experience the game in an entirely different way to another user.

Blockchain can be used in games to express individuality in a way that has never been seen before. Blockchain technology can allow each individual player to obtain items or avatars in game that are completely unique and unable to be obtained by anyone else in the game. New content is a key driver in DLC and microtransaction sales and this new completely unique element can give players a truly ‘rare’ item or avatar that has its own value. As these items would be stored on the blockchain, it could be possible for players to share this data with other games or game worlds.

The first popular blockchain digital game was Cryptokitties. In Cryptokitties, players can adopt, raise, breed and trade virtual cats with unique features. The game runs on the Ethereum blockchain and smart contracts are formed every time a cat is adopted, bred or traded. A token is also issued to the user and this token gives the user full ownership over the virtual cat. The object of the game is to breed virtual cats with each other to create a new cat with more highly desired features that can be traded or sold via the in-game marketplace for a higher price. The game has been likened to a modern-day Pokémon game but with the ability to increase the real-world value of each virtual cat. Some cats have been sold for over $100,000 because of how rare its features are.

Blockchain games in China

The success of Cryptokitties at the end of 2017 led to a number of Chinese companies taking a closer look at the technology to see how they could develop their own successful blockchain games. Internet technology companies such as Baidu and Xiaomi have jumped into the market and even traditional games companies such as Tencent and NetEase have now released their own blockchain games.

Baidu released its first blockchain game in February 2018 called “Laici Dog” which was developed by their internal blockchain team. The game is similar to cryptokitties but the two key differences are that the virtual pets in the games are dogs and that Baidu’s game does not feature cash transactions, but instead point transactions that can be spent on Baidu products only. Xiaomi has also jumped on the bandwagon and released its own blockchain game called “Crypto Rabbits”.

NetEase is traditionally known for its stable of high-quality PC and Mobile games but the company has recently started to take a more proactive approach when it comes to investing in new genres, segments and technologies. The company has been quick to develop games that take advantage of virtual reality and augmented reality before most and now more recently the company announced it was working on its own blockchain game called Lucky Cat in January 2018, before most other companies.

Lucky Cat aimed to capitalise on the success of Cryptokitties. However, the game was shut down after only a few days of testing and users were refunded. The company instead decided to focus on two brand new initiatives: a blockchain app called Planet, and a blockchain games distribution platform. The platform collates a number of blockchain games and allows users to choose a game that would be suited to them.

Tencent innovates with its own blockchain game

Tencent, the largest games company in the world, has also announced that it is developing its own blockchain game which is set to release this month on iOS and Android. The game, called Let’s Hunt Monsters, combines blockchain technology, augmented reality (AR) and location-based services (LBS) to create a game that is essentially a crossover of Pokemon Go and Cryptokitties. The game is currently in a closed beta.

The game lets players venture into the real world using LBS technology and capture monsters using AR technology, just like in Pokemon Go. The game allows users to upgrade their monsters and battle with each other too. In total the game will support 110.5 billion unique monsters that can be obtained in the game, bred with other monsters and stored on the blockchain. These collectable monsters can be traded and exchanged among users in the game.

Other applications for blockchain and cryptocurrencies

The first few blockchain games, which are mostly digital collectable card games, run on existing blockchains such as Ethereum. A number of companies are creating their own cryptocurrencies for games that they run. The advantages of this is that these coins can not only be spent in game but converted to fiat or into other crypto currencies whereas virtual currency that exists today can only be used within the single game. Companies such as Crytek have launched their own coin called crycash for users that play its portfolio of free to play games. Gamers can use crycash across these games for game related transactions and the company plans to expand its use in the future.

The introduction of these cryptocurrencies allows companies to accept payments directly without having to pay fees to platform holders such as Apple, Steam, Visa or Paypal. However, it is worth noting that there can be too much of a good thing and that not every company will benefit from an ICO. Gaming cannot absorb countless cryptos and it needs to consolidate. We foresee a few coins dominating the industry as they become used across the most popular games and communities.

The future of blockchain games

Blockchain games are still in their infancy and it’s taken applications like Cryptokitties to show how blockchain can be applied to games in a simple way. Tencent has taken this concept and innovated by adding elements from other popular titles to the game in order to entice more users and make the game easy to understand and play. Digital collectable games are currently the most popular type of blockchain games, but the technology has the ability to bring entirely new and unique gaming experiences to the market.