Gaming is one of the fastest-growing industries in the world and is estimated to reach a 120 billion dollar market cap by 2025 with more than 3 billion gamers engaged in different digital games globally. The gaming developer and by extension the gamer community has always been a few steps ahead when it comes to the adoption of innovation and new technology. Artificial intelligence, virtual reality as well as augmented reality-based games are already in the market and more are under development. In the last few years, the gaming industry has been warming up to the usage of blockchain not only to act as a storage of records but also to provide a means to incentivize users with the introduction of tokens which have real-world monetary significance. Features such as transparency, trust, and openness exclusive to the blockchain technology can give the gaming industry more credibility by establishing trust between all ecosystem participants.
Algorand’s Strategic move to the gaming industry
Algorand has ventured into the blockchain gaming industry by joining the Blockchain Gaming Alliance (BGA), a coalition of game and blockchain companies committed to advocating for blockchain technology within the online gaming industry. Joining the BGA is an opportunity to spread awareness about blockchain technologies and encourage adoption by highlighting its potential to foster new ways to create, publish, play, and build strong communities around games. This was followed by Algorand getting selected to store official chess ratings as FIDE Online Arena announced the launch of digital games with the first game recorded on blockchain being played between grandmaster Sergey Karjakin and Algorand founder Silvio Micali. Algorand’s features such as fast settlement, low transaction costs, and easy scalability provide the perfect foil for storing records of more than 5 million online chess games played daily. A detailed description of Algorand’s features and how they can be beneficial to the gaming industry are outlined below.
Scalability, which is an inherent feature of Algorand due to its consensus protocol, is of paramount importance for the online gaming industry. This is due to the sheer number of users, records and transactions to be managed. With over 5 million chess games being played online each day, it's a good start to enhance the number of transactions on-chain. This number, though big, is still just a fraction of other online games such as Minecraft, Fortnight, etc. which have millions of users engaged daily.
Non-fungible tokens (NFT), the creation of which is easy and seamless on the Algorand blockchain, will add real-world economic incentives to gaming. It gives game users proof of ownership of game items and characters. Gamers from all age groups spend a lot of time playing games online competing in combat games or building and consolidating in other games. There is always a sense of elusiveness to a unique house being built, which, when attached to a tradable NFT token, provides a sense of ownership that gives real-world economic gains. This serves to extend the monetization model for both players and game publishers.
With features of high network speed, low transaction costs, and finality of transactions, Algorand is well placed to handle the sheer volumes of transactions to add records or allocate rewards.
Market opportunities & Concluding Insights
The potential is huge with major games such as Fortnight, Minecraft, etc. each having over 100 million players per month. Blockchain can be used for secure record storage as well as providing economic value to the games via NFTs. All I would like to add here is that with all its features, Algorand is well placed to gain greater pastures in the online gaming industry. Let the games begin!