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XRP Expands Into $300 Billion Gaming Industry

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  • Private permissioned sidechains on the XRP Ledger are two months away. Federated sidechains are 6-9 months away. Gaming worlds may eventually plug into the XRP ecosystem using hooks and federated sidechains.
  • Games are already implementing basic blockchain features into their digital worlds. Fully-fledged market economies are soon to follow.
  • The Forte blockchain is a Ripple Xpring project creating an easy way for game developers to implement blockchain marketplaces and NFTs (non-fungible tokens) for player item ownership. It may one day adopt native XRP Ledger NFT features pending the appropriate amendments.
  • The gaming industry is worth $300 billion – more than the music and movie industries combined.

In an interview hosted by Daniela Cambone, former Ripple executive Miguel Visas stated that the gaming industry was worth $150 billion. While that number seems rather large, he actually underestimated the value. The total value exceeds $300 billion. With a revenue surge fueled by pandemic lockdowns, videogame companies and hardware manufacturers have consistently broken records.

During the interview, Miguel Visas describes a future where gaming worlds adopt blockchain technology to implement functional market economies within their digital worlds. This is a topic I’ve covered before and one of the more interesting areas of expansion for distributed ledgers. Not only will it bring a tremendous amount of value to decentralized ledgers like XRP, it will also enable developers to create worlds with vibrant economies that contribute to individual wealth through activities they complete in-game. Games will no longer only represent a sunken cost but will be part of an overall integrated participatory economy. Depending on where one lives, working in one of these digital worlds might be more lucrative than a normal job. This is already the case with traditional games like Runescape, where gold farming provides a reliable form of income for citizens of impoverished areas.

RuneScape has been a lifeline for Martinez and his entire family. He tells Polygon he earned $450 by gold farming in RuneScape, and used that money to flee Venezuela and move to Peru. He continued to play the game and saved an additional $1,000, which he used to get his mother and girlfriend out of the country.

The video game world has had a troubled relationship with the blockchain. Cryptocurrency mining has led to global inventory shortages as miners buy all of the graphics processing units (GPUs) they can in order to mine for cryptocurrency using high-powered hardware that would have otherwise been used for gaming. During crypto price surges, gamers often have to wait several months before they can find stock.

While initially a nuisance to most gamers, the blockchain has a lot to offer the gaming space. But with current iterations, blockchain gaming is far too scammy, inefficient, and expensive to be a useful addition to gaming space. With amendments coming to the XRP Ledger like hooks and the addition of federated side chains, this could change as developers will now have a functional and transactionally efficient decentralized ecosystem to power their gaming marketplaces.


Game developers monetize in several ways. The simplest are unit sales and subscription sales, with the latter typically being found in massively multiplayer games (MMOs). More recently, games have been adding monthly battle passes, which charge a modest fee for the progressive unlocks of game cosmetics and other vanity items players can use within their game.

Battle passes are typically optional, but they still generate a massive amount of income for both free-to-play games and those which charge a full retail price (like Call of Duty). Beyond battle passes, developers also sell skins and cosmetics which change the visual appearance of a player’s gun, character, vehicle, or almost anything else a developer can apply a skin to. The cost of these items can range from $10 to a few thousand for very rare skins.

Selling game cosmetics might sound like an unreliable monetization method, but in 2020, Epic’s popular Battle Royale game Fortnite generated $5.1 billion in revenue primarily from battle pass and cosmetics sales. Fortnite is entirely free to play, so it doesn’t have an upfront cost or a subscription cost at all. It monetizes entirely through optional cosmetics. Developers of popular free-to-play games have figured out that they can generate more income by selling players vanity items than unit sales or subscription costs alone.

Some video games sell gold, levels, characters; some are pay to win, which means that players can pay money to unlock an advantage in-game. There are various strategies, but the two most lucrative ones are the traditional (subscription and unit sale) and the newer free-to-play model (cosmetics and battle passes).

Blockchain Advantages for Developers

None of the monetization methods mentioned above require the blockchain. Valve currently runs the most popular game cosmetics marketplace, and they take a cut of every sale. Valve didn’t need the blockchain to make this happen; it was functional without a decentralized marketplace.

The utility of the blockchain comes from issues of trust and cost. Most smaller developers don’t have the resources to create an unrestricted game cosmetics marketplace. This leaves them with two options: use a centralized storefront like Steam, where Valve takes a 30% cut of every sale, or leave these features out of their game.

The difficulty of creating and maintaining an unrestricted game marketplace is the specific niche that the Forte blockchain is trying to solve by creating an open marketplace for video game cosmetics, items, currencies, etc., with transparent rules and functional decentralization. Developers can use Forte’s model to implement a decentralized marketplace into their games and take advantage of the burgeoning NFT industry. Forte developers are actively participating in GitHub discussions on XRP ledger non-fungible token support and other features they would consider useful for functional gaming NFTs on the XRP Ledger.

Gaming NFTs allow developers to tap into the unique collectibles market, which is insanely lucrative. The cheapest NFT land deeds in the upcoming Ethereum powered game Axie Infinity are around $13,000 per deed. Axie’s more expensive plots range between $31 million and $1.5 million.

There is no sales history for the most expensive deed, so it seems like the owners are pricing these plots far above where they should be. A cheaper “savannah plot” originally sold for 3.71 ETH, which today is worth roughly $11,648.81.

Gala’s upcoming MMO Mirandus sold a land deed for $800,000. That same property was eventually worth $3.5 million. And Gala is not exactly a notable dev studio. Thus far, their games have been pretty basic. Despite this, they were still able to sell a land deed in an unreleased game for eight hundred thousand dollars. Imagine what a company like Blizzard could do if they minted a Stormwind or Orgrimmar land deed. $3.5 million would be pocket change compared to the value of these properties.

Blockchain Advantages for Players

If you’ll excuse the pessimism, players get to purchase overpriced non-fungible tokens representing collectibles minted for their favorite games. Collectibles aren’t my thing, particularly ones priced over sixteen thousand dollars. But there is a market for this stuff. Players shell out ridiculous amounts of money for game cosmetics even without the ownership benefits that NFTs provide:

The screenshot above shows non-NFT game cosmetics from Counter-Strike, one of the most popular games of all time. These tokens are at least attached to a viable game by a seasoned developer. I suppose what bothers me about the crypto versions is that people view the NFTs as an investment rather than just a bit of fun. A fifteen to twenty dollar collectible is reasonable. But for the NFT gaming space to be this valuable from the start is insane to me, especially from developers who don’t yet have a popular or viable game. It’s harmful. People will get hurt by this. Most of these tokens are probably going to be worthless until a major developer or popular game starts churning them out. First edition comics didn’t burst out of the gate being worth hundreds of thousands of dollars. They eventually got there once the universe and the artists became notable. I feel like NFT game developers put the cart before the horse. Or they’re just predatory — it could also be that. Like cigarette companies selling you something they know causes lung cancer. Or early ICO projects crowdfunding their baloney ideas on the backs of unsophisticated investors.

Non-fungible tokens ensure that a developer cannot take a player’s collectible away. However, the important thing to consider when purchasing a collectible worth more than a car is the realization that if the servers aren’t also decentralized, the developers can simply ban the NFT from interacting with their game servers, which is something they do from time to time when they catch players cheating, exploiting, duping items — things like that. Decentralized game servers are probably not viable for anything but the most basic kinds of games because of the latency issues associated with decentralization. In a video game, the more latency, the worse the experience.

One of the more significant advantages of blockchain gaming is item permanence. When a game dies, the cosmetics die with it. No servers, no items. With the blockchain, the representation of a unique item will be there for as long as the blockchain exists, so player collectibles can still be valuable long after the last player abandons a game.

Another boon to a decentralized marketplace is that it enables players to trade and sell items amongst themselves without going through a centralized storefront. Valve’s cosmetic marketplace only allows players to sell items for store credit. If they want actual currency, the only option is a third-party marketplace. These marketplaces often sell items for far less than Steam does, and besides that, they occasionally get banned and lose all of the items listed on their storefronts. With Fortnite, if Epic catches a player selling their account, they’ll ban the whole account, destroying all the cosmetics associated with it.

Blockchain gaming does have utility beyond simple cash grabs for greedy developers, but it depends on the developers implementing these functions to ensure they’re not harming players and won’t fall afoul of securities laws.

Theoretical Gaming Models

The most exciting application for blockchain gaming comes from the possibility of a massively multiplayer game that integrates a fully decentralized market economy. Decentralized ledgers like XRP can facilitate currency and item sales and enforce property rights using land deeds as NFTs. As mentioned above, Gala is attempting this kind of model. Whether or not they succeed depends on how fun the game is.

When I first covered Gala’s upcoming MMO, the most expensive property I found was listed for $3.5 million. Today, their most expensive land deed sells for $6.3 million.

Imagine a game with hundreds of properties like this and tens of thousands of smaller land plots, all tokenized and generating income. These properties could represent stores, homes, lumber mills, stone quarries; each property gathering resources, rents, and income from sales. Each rewarding players with the game’s native currency, which can be traded seamlessly on the XRP ledger for any currency or commodity the owner desires. Players could potentially earn a liveable income playing and working within a decentralized game.

Freelance artists and developers could produce and sell content, storylines, and NFTs representing game collectibles. The game’s DAO (Decentralized Autonomous Organization) would accrue revenue from NFT sales, subscriptions, game sales, expansion pack sales, and they would employ tens of thousands of individuals across the globe to maintain their servers and properties. How much economic and social power do you suppose an organization like that could have — one that has tapped into the social ethos and captured the imagination of billions around the globe? It would be an economic and cultural juggernaut.

The popular MMO World of Warcraft had over $2 billion in annual income at its peak from subscription and expansion pack sales alone. Put another way; a digital world had a higher GDP than Belize, Gambia, Antigua and Barbuda, San Marino, Grenada, etc. And it didn’t even have a functional blockchain-powered free-market economy. A game like World of Warcraft that integrated an XRP Ledger powered free market economy that facilitated income-generating activities in-game wouldn’t have any trouble topping $10 billion in annual revenue. This figure could well be an underestimation.

Is 30 billion unrealistic when players generate a liveable income in the game and hold property valued as much as real-world land? Or if players buy and sell NFT game cosmetics and items, some of which reach tens of thousands of dollars in value (with the developer and artists getting a cut of each subsequent sale)? Is it absurd when we add rental income on digital properties to the equation? If a popular game can reach $2 billion with subscription and unit sales alone, what can it do when we add a fully functioning market economy and collectible NFTs?

Consider Gala Games again, with its $6.4 million NFT land deed. Gala is far from a household name. If Riot, Blizzard, or Valve were to take up this mantle and start minting land deeds, what do you suppose their game worlds would be worth? How much power would that wealth generate in the real world? How much economic activity would this bring to a decentralized ledger like XRP? I’m betting it would be a lot.

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