By Picture this: Sometime in the not too distant future, a game-developer releases the simulation of a digital world. It’s predicated on trustless, blockchain-inspired technology. The world has a set of rules, and they play out independently of any overseer interference. The world has a digital economy powered by blockchain technology and uses a native digital asset that can be exchanged on the Forte blockchain for national or digital currency easily, quickly, and transparently. Digital goods, like weapons, cosmetics, homes, land, ships, cars, planes, can be purchased using this currency – ownership verified and stored on the blockchain independently of any developer or centralized authority, giving the player concrete ownership of these digital goods. Value begins to attach itself to the digital goods, driven by scarcity, and the amount of time it takes to earn or unlock these items. Players use the marketplace to sell the game’s native digital currency, or they sell raw materials they’ve gathered in-game, digital products they’ve crafted, or a multitude of other items that can be made or earned in the simulation. The price of these digital goods and digital assets – which all now exist on the blockchain – fluctuate like a stock, currency, or commodities market. The more successful players begin to earn a livable income working within this digital world, selling the things they acquire and make in-game for money.
This may seem fantastical and unrealistic, but according to a recent talk by representatives of the Forte Blockchain on Tech Crunch, these ideas are very much grounded in reality. How lucrative could a game like this be? Josh Williams of Forte Labs indicated that a single game with a player base of only a million players, each earning a livable income ($30,000), would have a collective value dwarfing today’s music industry. The million-player yardstick need not be found in only a single game. If the idea really takes off, these million players could be spread across a dozen different games. It is by no means impossible. In the future, we may have games with digital economies that dwarf the GDPs of some nation-states.
What would the geopolitical implications of this be? Imagine a game with this level of financial investment at stake – a simulated world, with a simulated war between nation-states, where millions of dollars worth of goods are at stake, like player-owned land that produces wealth in-game through natural resources, or tanks, planes, and armies funded by player commerce throughout the world, all with the potential to be taken or lost through conquest. Would these fights spill over into the real-world? I can’t imagine people would be happy if they were about to lose income-generating digital property to an enemy conquest.
In the past, gamers have risked digital goods worth a staggering dollar value in games that simulate economic features at a smaller scale. In the popular space-sim EVE Online, the total cost of lost ships in a massive battle was $200,000. There have also been incidences, albeit rare, where gaming disputes have turned deadly. Events like these won’t becoming less frequent when there’s real money at stake.
One of the most interesting things the video mentions is the ability to have games operate trustlessly, independent of the blockchain.
The blockchain does specific things very well, but it typically has additive latency at the cost of maintaining a trustless transaction. For a real-time videogame, additive latency is a very bad thing. Players expect an instantaneous, smooth, and input latency-free experience. The explosion of negative press towards Stadia’s additive input latency is a good example of this. If Forte develops the kind of trustless gaming technology that can operate independently of additive blockchain latency and cost, it could give developers the ability to create some rather exciting worlds in which players can develop economies, ecosystems, and worlds absent developer choreographing. They would, in effect, be simulated worlds, free to develop absent any overseer. There would still be an essential part for technologies like XRP to play in the financial aspects of these worlds, both in currency transactions and ownership and property transfer of digital goods. Forte does not seem to be treating the blockchain as a panacea. The Forte developers seem aware of the technology’s specific limitations as it relates to digital worlds, and they seem to be implementing it in a focused and practical manner.
Valorant's in-game cosmetic store
The most obvious example of blockchain utility when it comes to gaming worlds is decentralized ownership management. But Josh Williams indicates that other features would also be important in assigning value to game assets. The example he uses is a weapon that was the first of its kind to be used to slay a particular boss. The dollar value of this weapon would naturally be higher than that of other counterparts of the same type, and this status of world’s first boss killer would be stored in the item’s history on the blockchain. In-game items, as Williams states, become assets rather than expenditures.
The possibility of importing cosmetics and items from game to game was also mentioned during the talk. It had been something that occurred to me previously while I was reading about Forte’s technology, but I didn’t consider it practical because it would be an additive cost for developers with little potential financial return. But during the video, they mentioned something that I hadn’t considered, which was the possibility of rewarding players financially for popular game content that they had made. It also seems reasonable that a freelancer could be rewarded for importing art assets and items from previous games into newer games, in a similar fashion to how Valve has been paying artists for popular independently made Dota 2 cosmetics. Forte indicates that an artist, creator, or player, could potentially receive a cut of every subsequent transaction of a game asset using a smart contract on the blockchain. As such, there is potential for artists, writers, and gamers to earn additional income by developing assets in a game. The most successful content developers may become quite wealthy if the incentives line up.
Call of Duty: Modern Warfare's cosmetic store
Games don’t just require a financial investment to play. Players also invest time in a game. For many of us, seeing the hundreds of hours we’ve sunk into a game displayed on a Steam page evokes a negative response. Gamers get little reward for the amount of time put into a game beyond simple entertainment. With a decentralized marketplace like Forte, the sunken time cost of leveling a character in an MMO can be recouped financially if a player decides to sell their character and their game assets.
For game developers, blockchain technology could boost revenue by boosting player engagement with game monetization systems.
The Forte developers reference the statistic that in typical free-to-play games, 1% of the players are responsible for 90% of the revenue. In addition to expanding transactional income for a developer, players would become more engaged in a game’s monetization system if they stand to be able to sell these assets later on, or if they have the ability to generate an income from actions they take in-game. With cosmetics sales in popular games like Fortnite, players cannot do anything with those assets once purchased, unless they want to risk their accounts being stolen by a fraudulent third-party buyer or risk having their accounts banned by Epic Games for violating their terms of service. Fortnite is a runaway success despite the skins being essentially a sunken cost for consumers. Anecdotally, I have been hesitant in the past to purchase cosmetics from game stores largely because they add nothing but different visuals to a gameplay experience. If I could sell the skins after the fact, I would be far more willing to purchase additional game cosmetics. Studios may be leaving money on the table by refusing to allow players to sell skins, or to sell their characters.
There are, of course, no guarantees that these ideas take off with developers or manage to capture consumer attention. Nevertheless, they have a great deal of potential, particularly once the right developers begin to adopt blockchain or blockchain-inspired digital marketplaces. The Forte digital marketplace is one of the most promising blockchain gaming projects, and it is powered by Ripple technology.
Other articles on XRP, Forte, and blockchain gaming:
XRP and the Digital Cosmetics Marketplace
XRP and the Digital Cosmetics Marketplace, Part 2
Header Photo by Florian Olivo
