On the back of a year consumed by blockchain, in 2018 DMR Business Statistics predicted that by 2020 the industry will be worth a projected value of $60 billion. Within gaming alone, cryptocurrency has been hailed as the answer to making in-game transactions easier and safer, with the potential to bolster engagement and attract new users.
In recent years, brands such as PayPal, Red Bull and Swarovski have opted to utilize tokens to gain marketing insights from audiences or as a tool to reward employees for their innovation. Payments giant, PayPal, has yet to embrace blockchain technology on its commercial platform, however, online tech site Cheddar recently reported that the company has launched a program which will now reward employees for their innovation with crypto-tokens
In gaming, a number of small companies have tried to implement real money online gambling with cryptocurrencies to avoid licensing and working with banks, which is of course illegal. Some companies have also been trying to build their own games stores with the goal of reselling the games and in-game assets, as well as offering their own loyalty, rewards and advertising schemes. All of which would be based on their own internal cryptocurrency/token.
Social messaging company, Kik, has previously used cryptocurrencies as a rewards-based system to encourage interaction within its community. However, recently the company turned its attention to mobile gaming, announcing a partnership with Unity Technologies that will see the cryptocurrency, Kin SDK for Unity, available on the Unity Asset Store. As a result of the collaboration, Unity developers can easily integrate Kin into their mobile games, enabling them to create user experiences that reward social interaction and create ‘stickier’ social networks, while keeping users playing through peer-to-peer experiences.
Dublin-based, social casino operator KamaGames, carried out a token sale in the latter half of 2018 but unlike other companies who participate in token sales, the move into crypto/blockchain had little to do with money. KamaGames didn’t attempt to attract the interest of investors or their financial backing. Nor did they look for speculations related to their token and never intended to list it on any of the crypto exchanges.
Instead, the sale was an opportunity to ‘test the waters’ of the blockchain industry and discover if the demand for purchasing tokens is as widespread as they were being led to believe. Also, it would answer the question of who a token sale would satisfy should they repeat the practice – players across their primary app Pokerist or simply a small but decidedly vocal minority?
KamaGames also wanted to increase player retention and loyalty, as well as revenue. Their aim was to offer an interesting promotional event, while attracting a new type of audience and re-engaging lapsed players. The token was built so that the players would stay with the app, hold tokens and receive bonus chips on a daily basis. The token to in-game virtual chip rate would grow by 25% every month and holders would also receive additional daily bonuses for the first 6 months.
According to BlockChainGamer.biz, of the 33 games tokens they tracked throughout 2018, the average value of the tokens decreased by 84% in total. Similarly, KamaGames found their token sale to be less than their most pessimistic projections. KamaGames found that there is little sense in developing a social casino product on the blockchain considering the priority for most social casino players is simplicity and speed. Blockchain doesn’t add to any of those.
Aside from this, a further hindrance to the technology’s success in the gaming sector is caused by the lack of a blockchain capable of handling the volume of transactions which occur on apps like KamaGames’ Pokerist daily – somewhere in the region of 1.5 million per minute.
KamaGames also uses a certified RNG (random number generator) and there are currently a lot of unanswered questions associated with the use of this on the blockchain. The main concern being that it could make the RNG more predictable which of course defeats the object.
It’s apparent from the recent innovations of PayPal that tokens do have the potential to be effective as a rewards-based system, however, following the KamaGames Token sale the question still looms about their value on social gaming platforms. While the conversation around blockchain and cryptocurrencies won’t dissipate anytime soon, this is a clear indicator that it may not be widely adopted by the gaming industry in the near future.