Cryptocurrencies to takeover online gaming world

Cryptocurrencies and online gaming seem like a match made in digital heaven. The burgeoning popularity of online gaming and esports has led to the creation of in-game digital currencies which could be a valuable addition to the virtual economies of popular online games such as World of Warcraft.

Study: Gamers would love to use digital currencies

According to a study by digital asset exchange WAX, which surveyed 1,000 gamers in the US, 75 percent of gamers wish that they could exchange their virtual goods for a digital currency that can be bought and sold on other platforms.

Furthermore, while five percent of millennials have an interest in cryptocurrencies, 55 percent of online gamers have already used them in the past. This suggests that there is a large crossover between the bitcoin community and the online gaming community.

Interestingly, out of the surveyed gamers, around 50 percent of all age groups also own cryptocurrency. However, 87 percent of them have not used digital currencies in gaming before but 80 percent stated that they would be interested in using cryptocurrencies to make in-game transactions.

The study also found that from the potential benefits that cryptocurrency use in online games could bring, 75 percent of the surveyed gamers cited their ease of use, 66 percent stated heightened security, 49 percent said lower transaction fees.

Moreover, 64 percent of those surveyed believe that the current model of in-game virtual currencies needs improvement and 69 percent are interested in being able to convert their in-game virtual currency into tradable digital tokens.

“The widespread usage of cryptocurrency in online video gaming is imminent. Video gamers are tech-savvy members of a global community with the desire to make frequent, small transactions across borders. The results of the study could not be clearer: video gamers want to be able to use cryptocurrency to make low-cost gaming-related transactions,” said William Quigley, CEO of WAX Token.

Can cryptocurrencies give online games an upgrade?

The virtual in-game items market is currently plagued by high transaction fees and exchanges rates, inefficient intermediaries, and slow transaction speeds. These are all issues that could be resolved by implementing high-speed, low-cost digital currencies such as Dash, Dogecoin, or Stellar Lumens, for example.

Alternatively, a specific cryptocurrency dedicated to the most popular online games could also resolve these issues provided it is run on a secure, decentralized blockchain that can provide high-speed, low-cost microtransactions.

GameCredits is probably the primary contender for this position as its token GAME is a cryptocurrency that has been designed specifically for in-game payments as well as for payouts to gamers and game developers, which can be made anonymously through fraud-proof transactions. Separately, GameCredits has announced a hardfork in the coming days to upgrade the network and warned its customers of disruption to its services.

Other well-known gaming-specific cryptocurrencies, such as First Blood, and Unikrn, focus on the e-sports betting aspect of online gaming as opposed to in-game purchases of virtual goods and services.

Adoption in games does not come without downsides

While the integration of cryptocurrencies into video games may make perfect sense for gamers, for game developers the story is not that clear.

Firstly, speculation in cryptocurrencies leads to regular price spikes and collapses. This could affect game developers negatively if their game’s coin is in a downtrend. An external token would thus bring substantial uncertainty about future earnings for games that rely primarily on in-game purchases to generate revenue.

A possible solution for this challenge could be the adoption of a gaming-specific stablecoin that is pegged against a major fiat currency or a basket of fiat currencies to reduce price volatility.

Secondly, game developers want gamers to keep spending money in their games and do not want gamers to “cash out” their in-game virtual currency. If one digital currency emerges as the go-to currency for in-game purchases then players will regularly cash out their earnings instead of “reinvesting” them in the game they are playing. It is, therefore, not necessarily in the game developers’ best interest to develop their own currency. Without the go-ahead from major video game producers, it will be difficult for a “gaming cryptocurrency” to emerge victoriously.

This poses perhaps the biggest challenge for gaming coins: convincing game developers that the benefits of in-game cryptocurrency use will outweigh the downside of regular cashing out of the currency. A possible scenario could be that game developers themselves issue their own cryptocurrencies that are used within all their games so that they can have a certain level of control over their in-game currency. This, however, goes against the idea of decentralized cryptocurrencies in the first place, so it might not be that easy to be implemented from a consumer demand point of view.

Whether a gaming-dedicated stablecoin will be adopted to combat the issue of cryptocurrency price volatility or whether game developers will simply create their own currencies for their games or whether there actually will be a gaming crypto that becomes the gold standard of gaming remains to be seen. However, it is unlikely that cryptos won’t impact the gaming sector one way or another.