Blockchain Empower the Game Industry

9 Jan, 2019 07:38
source: 奇点财经 Singularity Financial

Senior Research Fellow of Hong Kong New Economics International Institute FU Rao

Reprinted from Takungpao

One year ago, in November, 2017, a blockchain pet game, Crypto Kitties, swept the whole world. Its issuance received heated extolling from the public and eventually this artificial cat was sold for whopping 114,000 US dollars. After that, Baidu, Netease, 360 and Xiaomi respectively issued Laici Dog, Xingqiu, blockchain cat and encrypted rabbit. ChinaJoy launched the “China Blockchain Technology and Game Developers Conference” agenda, which is dedicated to discussing the integration of the blockchain technology and game technology. Actually, as early as before the Crypto Kitties, the so-called blockchain food stealing game priced in the Bitcoin and Eth was launched. There were virtual currencies in the game world and most of them, such as the QQ Coin, have already made RMB their benchmark in players’ transactions. It has formed a closed economic system. The integration of this system with the blockchain will generate fair value, and therefore they can enter bigger overseas markets.

The decentralized blockchain technology can restrict game companies from selling too many equipment, so that the fairness and competitiveness of the games will be improved. Taking Baidu’s Laici Dog as an example, they have 8 appearance features and each feature is with more than 10 attributes. Every Laici Dog will be given 8 appearance characteristics randomly, to ensure that every Laici Dog is the one and only. Some players are expecting that the virtual equipment they brought (the ownership is confirmed by the blockchain) can be used in other games and then become they own belongings.

Against the backdrop of the blockchain decentralization, game companies, as centralized organizations, should adjust their profit model. Currently, game companies are using super nodes to balance their profits and realize decentralization. To put it simply, every registered player will become an ordinary node of the blockchain distributed platform. The authority of this ordinary node is relatively limited. So, in order to break the barrier, game companies can enter the platform as a super node. Every transaction can be conducted by players autonomously and transaction through the super node is also available.

The blockchain games are facing problems including terrible gameplay and high speculativeness. Some blockchain games were issued on the Eth basis, however, Eth’s TPS (Transactions per Second) is pretty low. At present, the TPS of the ordinary centralized network system is hundreds of times higher than that of the Eth. Excessively low TPS (means excessively high redundancy) cannot meet the basic requirements of online games for low delay, which has restricted the development of the blockchain games. However, some other public blockchains (such as EOS) can utilize the DPOS (Delegated Proof of Stake) to improve the TPS and are therefore expected to solve the current conundrum.

Some experts argue, after the overall rules of the blockchain games become abstract, it resembles gambling very much. Because things on the blockchain have value and games just enable the circulation of this value by rules. Some players even purchase in-game equipment out of investment purpose. How to guarantee law compliance under the current legal system has become the unavoidable question for blockchain game developers.

In addition, security cannot be ignored. Pei Zhiyong, director of the 360 ​​Industry Security Research Center, said that today’s biggest threat to the blockchain application system is mainly the traditional security vulnerabilities in application systems, such as source code vulnerabilities, business logic vulnerabilities, website security vulnerabilities, and app security vulnerabilities. These vulnerabilities often drive away all the the mathematical or logical security established by blockchain technology itself.

Quite a few prudent investors believe that the majority of blockchain games on the current market are just selling concepts. Cao Yan, the founder of the Energy Blockchain Labs pointed out that the this is the edge-ball products, in the name of games, but it is the digital asset in nature. All these reflect the immaturity and defects of blockchain technology in establishing the infrastructure and improving the laws and regulations.

The statistics indicate that over the past 20 years, China’s game industry has maintained a rapid growth as a sunrise industry. At present, there are about 580 million game players in China and the market size reaches about 250 billion yuan. However, its explosive growth and iteration are essentially made possible by the double fluctuation influence from the release and change of dividends on the demand side and the supply side. The rise of short videos and other recreations has cut down the dividend enjoyed by the game industry players. The domestic game market revenue has been growing at a slower speeder than the previous year for several years, the life cycle of games has been further shortened, and with the high oligopoly market share, the new game market has almost been monopolized. The chances of success for game entrepreneurs may appear in the blockchain empowerment.