This article was contributed by Humpty Calderon, head of community at Ontology.
Over the last several years, the gaming industry has witnessed incredible growth. Expanding 23% in 2020 from the year prior, its integration with blockchain has seen play-to-earn and crypto models skyrocket in popularity.
Against this backdrop, many gamers and developers are skeptical about the benefits that blockchain can bring to games, leading to recent backlashes against some studios that are integrating NFTs. Tangible use cases that showcase the benefits and solutions that blockchain can bring will be important for demonstrating that this technology can enhance what players already know and love about gaming.
Through backending games with blockchain technology including decentralized identity (DID) solutions, players can truly own and get rewarded for their in-game assets in a way that hasn’t been possible before. In doing so, they are tied to a safe, secure online identity that will be transportable across multiple different virtual worlds.
Blockchain allows studios to take the gaming world to a whole new level. It can help ensure that in-game items are traceable and that the value they hold isn’t just locked inside a game. Tying blockchain to in-game items such as weapons, skins, and other collectibles enables them to retain a new, unique form of value, while also ensuring that value stays safe. This means that if a game is eventually deleted or sold to another company, players can always retain their value. By tying a digital record of an asset to a person’s decentralized identity, players can prove that they own the item and can carry that record out of one game if needed. In this way, DID can facilitate interactions between different blockchain-based games to offer a diverse range of benefits for players.
DID solutions are blockchain infrastructure that can back-end a game in order to verify players’ identities, confirm traceability and validity of their in-game assets, and ultimately increase player security. As the gaming industry grows, so does the appetite for confirmation of ownership of in-game objects like treasures, trading cards, and other quest items that can be collected, and blockchain can help users to meet these needs.
We have witnessed individuality becoming increasingly important for Gen Z, who make up a large portion of the gaming community. According to reports, 87% of Gen Z play video games, with 65% having spent money on virtual items within a game in 2021. Through attaching a record of ownership to an immutable ledger on blockchain, players can truly prove that they own these items, making the process of exchange much clearer and more secure.
Players often trade in-game items such as skins, lives, and skills via forums, social channels, and commerce platforms. The reason they choose to do so outside of the games themselves is that many games do not enable the exchange of items for real currency nor do they have the infrastructure to truly verify items. Easy-to-navigate, quick KYC checks using DID are one option that can be used in games to enable fair exchange and protect players from scams and other malpractice. This means that players who are trading can confirm their identity, while remaining aware of the legitimacy of the person they are dealing with. What’s more, if players decide to take themselves out of the gaming economy to trade via social channels or forums, they can still request DID verification to prove the legitimacy of who they are trading with. Thus ensuring that they are safe both in and out of the game.
Web3 will eventually enable players to seamlessly traverse between different games and virtual worlds that make up the metaverse. In practice, what this could mean is a player would be able to take their avatar from a game like Call of Duty and bring it into World of Warcraft to complete a quest. There, they might buy a sword and later sell it to a player in Decentraland, where they could use money to buy a virtual plot of land. The possibilities are endless but in order for this to become a reality, players need to have an interoperable digital identity that will allow them to traverse through many virtual worlds with a consistent identity including their wallet, assets, and personal information. Decentralized identity enables this.
DID solutions also mean that players own and have full control over their own personal data, enabling them to log in securely to different systems without exposing their private information. This level of security is a crucial element for gaming, ensuring that every transaction within a game is verifiable, securely recorded and stored, and most importantly cannot be altered. Players pour countless hours into building their gaming profiles, skills, and collecting items. DID can help gamers to secure these gaming assets while also protecting their privacy and preserving their valuable time. Solutions are designed to allow players to create a stronger version of their online identity and with complete control, the DID holder can decide what information they choose to share with a private key that grants access to the verified user only.
With the global gaming market set to reach $250B by 2025, the appetite from players looking to truly own their in-game assets and hold a secure interoperable identity across multiple virtual worlds will only increase. Decentralized identity can build an entirely new ecosystem of true ownership within video games, whilst adding security, protecting private information, and adding trust. This would alter the entire industry for the better, creating a more transparent arena where players can rest assured that their assets and real and virtual identities are safe. If utilized correctly, decentralization will shape the future of gaming.