The blockchain leads to radical innovation in the gaming sector. Players earn money and become owners. Virtual real estate speculation is drawing attention, but the new business models emerging in the gaming sector are even more interesting.
The gaming platform The Sandbox looks like Minecraft or Roblox, with its block-shaped yet detailed figures and objects. Here too the users create their own games. But unlike Minecraft or Roblox, they can put their digital creations on a blockchain and trade on a marketplace of their choice.
Blockchain technology allows game developers to keep more of their income. Now payment service providers withhold up to 4 per cent and distribution channels such as Apple, Google Play and Steam usually charge 15 per cent. This used to be 30 per cent. ‘That reduction was due to the blockchain,’ says Dierckxsens. ‘The choice for the blockchain makes it possible to use a different distribution model.’ Alliances are entered into with brands.
The Sandbox partners with the French video game group Atari. There is also a collaboration with the Belgian IMPS, known for the smurfs. That opens the door for the promotion of games through those big brands. “The Sandbox can thus act independently from Steam or other major distributors,” says Dierckxsens. “It will itself become a distribution partner for the game developers and a challenger to the current distributors.”
‘Play to earn’
‘We are moving from free to play to play to earn,’ explains the CEO. Players make money. After hours of hard work, someone acquires special abilities in the game or the gamer learns to create interesting objects. With the blockchain and NFTs, that work can now generate money. Avatars and digital items can be traded on marketplaces. If the buyer of virtual land or some other virtual property that later sells for a profit, a ‘smart contract’ can stipulate that some of it must go to the original seller.
Such techniques are already used in the art world, where the artist Beeple sold his work as NFT for 69 million dollars.
The owner of The Sandbox, Hong Kong-based stock exchange Animoca Brands, is served by the growth of the virtual economy as it increases the value of its virtual currency, the SAND. Users of the platform create a ‘wallet’ via Arkane Network where they can buy and manage crypto coins. This is the cryptocurrency ether, with which the user can then buy SANDs. But how does the virtual economy work?
The game developers are making deals with the virtual land owners to install games that will hopefully attract a lot of players. The games need virtual objects and animations. For this, the game makers can attract digital craftsmen. When all goes well, real estate owners, game makers, craftsmen and players reinforce each other in a positive spiral.
The Sandbox may open to regular users later this year. In April, USD 5.9 million worth of virtual land was sold in 24 hours, co-founder Sebastien Borget said on Twitter.
There are alternatives such as Decentraland, which prides itself on being ‘completely decentralized’ and owned by the users. More than $ 50 million sales have already been recorded there, including land, avatars, usernames and virtual clothing, the Reuters news agency reported. A virtual area of 41 216 square meters was sold on April 11 for $ 572,000. Experts fear that sooner or later a bubble will explode.
Speculative bubbles do not in themselves render the model worthless. Dierckxsens also sees Roblox and Epic Games using the blockchain in the long term. Arkane Network estimates it will have 10 million players in its network within five years. ‘That’s a conservative estimate,’ says Dierckxsens.