Blockchain and Gaming Offer Vast Potential. So Why Hasn’t It Taken Off?

By JC Kim, co-CEO Planetarium

Blockchain for gaming has long been thought of as the perfect combination. After all, blockchain solves many of the legacy problems of the gaming industry. Technology like non-fungible tokens allows users to own their in-game assets, preventing the challenges of account theft. They could even port them between different games, opening up new avenues of value for the sector. Decentralization could help smaller developers wrest control from the small handful of big gaming studios that dominate the space. 

It all sounds very compelling on paper, but in the six years since the launch of Ethereum, blockchain-based gaming still hasn’t taken off in any meaningful sense. In fact, Ethereum’s success is pushing away the games that originally chose to set up home there. In February, digital pet universe Axie Infinity moved onto its own side chain, while VR metaverse Decentraland has recently migrated to layer two platform Polygon. In both cases, Ethereum’s scalability woes and resulting high transaction fees were cited as the reason.

There are other challenges with legacy blockchains, such as the barriers to entry. To send any transactions, users usually need a balance of native platform tokens, which requires exchanges and cryptocurrency wallets. However, perhaps the biggest issue is that blockchains in their current format don’t actually help solve the challenges gamers are asking to be solved. 

Chinese Walls

Massively multiplayer online games like World of Warcraft or Lineage are developed as walled gardens, fiercely guarded by the centralized companies that build them. But gamers want to put their own spin on things.

For instance, Defense of the Ancients, or DotA, which pioneered the multiplayer online battle arena (MOBA) genre, started as a user-created Warcraft 3 Map in 2003. Another example is Battlegrounds, based on modifications (or “mods”) developed by game creator Brendan Green, who goes by the online handle Player Unknown. More recently, Auto Chess got its own MOBA spin-off as a result of mods made to a version of DotA.

Where users have tried to modify games such as World of Warcraft, they’ve come up against the might of the gaming studios. Nostalrius of WoW, a private World of Warcraft server, had close to a million signups when Blizzard Entertainment, the company behind World of Warcraft, issued a cease-and-desist letter that forced the administrators to shut it down. But eventually, the company would sue, and the servers had to be shut down. Even so, there are still thousands of user-operated servers with their individual economies and perks.

Why Not Blockchain?

So what’s the solution? Gaming needs to be more open-source. And arguably, with its principles of openness and decentralization, the ethos of blockchain fits perfectly. But developing game logic on smart contracts isn’t sustainable for complex games, particularly so given Ethereum’s high transaction costs. Some developers operate a hybrid approach, using centralized servers. However, this method blocks players from accessing the servers, meaning they’re not empowered to create their own modifications.

Therefore, application-specific blockchains are what’s necessary to create a successful marriage of blockchain and gaming. However, to take it a step further, we need to ensure that individual games can continue to have different economic incentives. Therefore, basing a single game on a single blockchain is the only way to make sure that we can address the gap.

In this way, blockchain technology can become the basis of massively multiplayer games powered by community effort. These games can be infinitely modifiable, owned by the community, and run on decentralized economies that reward content creators.

However, this doesn’t necessarily mean that each game needs to have its own platform. Using a blockchain core written in a generic coding language, developers can create complex blockchain applications powered by the Unity cross-platform gaming engine.

The core can also have built-in features particular to game development that are typically missing in traditional blockchains. For instance, many games rely on random number generators, which are simply incompatible with the deterministic nature of blockchains.

A Working Proof of Concept

The proof of concept is already here. Nine Chronicles is a completely decentralized RPG PC game, which runs entirely on the blockchain without any centralized servers. Developers cannot shut down the game and cannot force through any updates.

The open API means that players can generate their own modifications and content, and even create marketplaces in which to sell it. The game is entirely free to play without requiring a newcomer to start out with a balance of cryptocurrency to join in.

Nine Chronicles serves as an initial proof of concept for what blockchain and gaming should look like. Instead of trying to force a fit, shaping games around what’s possible on a blockchain, developers and players are free to create the games they want to play. In doing so, they can then shape the blockchain functionality around what they want from the game. Ultimately, it’s this flexibility that will create a successful marriage of gameplay underpinned by decentralized, open-source technology.

Author Bio

JC Kim is the co-CEO of Planetarium, an open source gaming platform creating the future of decentralized MMOs that live forever on networks powered by the players. The team is also creating the first game on the planetarium platform, Nine Chronicles, a fully open sourced reference RPG game that can run forever thanks to the peer-to-peer networks it runs on. With the technology Planetarium is creating they are pioneering a new form of community-powered games.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.