For online gamers, in-game purchases made to buy special swords, guns, or other add-ons to play their adventure, warfare, and other games are one-time, non-transferable investments that lock them into their pretend worlds. That’s something companies like Polyient Games want to change by registering those purchases using blockchain and transforming the previously one-way transactions into liquid assets which are transferable for cash.
Polyient Games, which was spun off in February from its parent Polyient Labs, isn’t actually a gaming company–they don’t develop or sell games. It’s actually an investment company that wants to make online gaming more fair for players by funding early-stage gaming startups that incorporate blockchain technology in the nascent blockchain gaming industry.
The idea, said Craig Russo, the company’s director of innovation, is to broaden the appeal and growth of online gaming by giving players tools that allow them to keep those purchases or migrate them for use in other games without having to buy them again.
“Some of these in-game assets can cost thousands of dollars each based on scarcity,” said Russo. Using blockchain, a player’s items, from swords to guns and more, are entered into a blockchain. “It’s pegging your sword or gun to the blockchain, allowing you to own it and take it out of the game and sell it on the open market for a profit. People can’t do that now.”
That’s one of the biggest limitations in today’s huge $50 billion global, in-game purchases market and in existing games, said Russo. “Your money is there and there is nothing you can do about it.”
SEE: VPN: Picking a provider and troubleshooting tips (free PDF) (TechRepublic)
That lock-in helps game publishers take control of the assets from the players. For 2020, the overall global gaming market is expected to hit $159.3 billion, and that could grow due to the COVID-19 pandemic keeping people at home, according to gaming analyst firm, NewZoo.
Polyient Games is an early adopter in the gaming investment blockchain marketplace. Other companies include Forte, which in 2019 raised a $100 million fund for blockchain gaming, and Dapper Labs, which started the online CryptoKitties collectibles craze in 2017.
Over the last 10 years, the focus on blockchain has been mostly about the Bitcoin cryptocurrency and about its uses in adding security and trust to the food supply, pharmaceutical companies, financial companies, logistics, and more, said Russo.
A blockchain is essentially a database of details. Often called a public ledger, a blockchain is a secure and unchangeable log made up of metadata about when and how each transaction occurred. Blockchains are cryptographically secured, which provides security and trust for users.
On a blockchain, in-game assets are represented as non-fungible tokens (NFTs). An NFT is any unique asset that can be tracked on a blockchain. That can be anything, from a weapon purchased in a game to a digital artwork purchased online. In comparison, a fungible token is something like a US dollar bill, where each one is equal to another US $1 bill. Fungible assets are like other assets in that asset class, said Russo.
Polyient Games focuses on NFTs and is working to add more value to them by improving the underlying infrastructure and application layer. The idea is that these assets are also enabling the transition of high-valued items like collectibles and artwork into the digital world, in addition to improving the economics of digital in-game items. Much of the NFT market right now is being driven by digital marketplaces around collectibles and artworks, he said.
Eventually, by giving value to these assets and allowing owners to resell them to others, professional gamers who earn coveted in-game premium items could use them to even make a living, said Russo.
“It’s this concept of play to earn, which is the opposite of pay to play,” he said. “It’s sweat equity, earning items like swords and others and then selling them to earn real-world money. Some players don’t want to spend a lot of time earning the rewards, they just want them now.”
That’s how the reseller market is being created, he said. “The $50 billion in-game purchases market shows that people are willing to pay for in-game items. For those willing to earn them, there’s always going to be a willing buyer.”
On the surface it may seem crazy, but when you look at the traditional markets for items of all kinds, it’s really just applying those concepts for a digital age, said Russo.
“We’re much more focused on the larger NFT market and giving choice,” said Russo. “It will be important for players to understand that owning their assets is an important element of game play. That’s really what’s going to drive what we see as the next big evolution of blockchain gaming.”
One company Polyient Games has invested in so far in its Polyient Labs incubator program is Cargo.build, an infrastructure startup that offers a scalable technology which lets users mint or create assets on a blockchain. Other investments include Blockade Games, a blockchain development studio that’s creating a highly-anticipated massively multiple online (MMO) role-playing game.
“These are tangible assets in a digital way,” said Russo. “Not everyone wants to have an asset that they hold in their home. As their lives transition into social media or video games, this is a new form of social interaction.”
The blockchain capabilities can involve any kind of online game, he said, from card-based games such as Gods Unchained, to interactive battle games like Axie Infinity, which is backed by blockchain technologies.
“An important step in all of this will be integrating this technology without the user knowing it,” which will make it easy to use, said Russo. “That’s why we are really investing in the future of it.”
All of this is just getting started, he said. There are millions of dollars in monthly transactions being done already on the decentralized, public Ethereum blockchain, which is the second largest blockchain network in the world behind Bitcoin.
So far though, the system of players being able to resell their in-game purchases to others is happening, but it’s very fragmented, said Russo. “We are hoping to bind that together and advance that as a whole.”
Russo and his company envision that all sorts of online games being played today will one day incorporate this technology in the future, even single-player and console gaming from vendors including Microsoft and Sony.
“The grand vision is to bring blockchain technology to items and loot boxes in mainstream games,” he said. “It’s the combination of technology issues and readiness of game console companies to adopt it. It’s an uphill battle, but it’s already something that people are starting to think about.”
A lot of the necessary infrastructure to make all this happen seamlessly is not yet in place to scale these efforts to add value to NFTs, but progress is being made, said Russo.
“We’ve just scratched the layer of what you can do with this asset class,” he said. “That’s something we’re really trying to get across.”
And with the global coronavirus pandemic keeping people at home, many of the world’s two billion gamers have more time to play their favorite games, which could add interest to the possibilities of blockchain, said Russo.
“When you look at consumer applications across the board, gaming is probably the biggest market, especially with the pandemic,” said Russo. “Blockchain is one of the most promising technologies for the entire gaming industry. It opens up the economic model for gaming to allow gamers to make the most of their time spent gaming.”