The 21st century has marked the beginning of blockchain technology, but unlike many other innovations, its development has not taken decades. Its implementation is skyrocketing in a variety of areas. Some say by the end of the century current business practices could be found only in dusty history books.
Blockchain technology in gaming is having an expected boom and is gaining momentum. But, in order to figure out the innovative ways of gaming monetization, there must be comprehension of what blockchain technology is.
A Peep into Blockchain Technology and Fundraising
A blockchain is an ever growing list of economic records, transactions, to be more precise, linked together in a secured way by means of cryptography. This list is spread across a network of computers rather than stored on a single server and is constantly updated.
Since the technology is revolutionary, it affects the way startups draw funds for their blockchain projects. Initial Coin Offerings (ICO) have come to replace the Initial Public Offerings (IPO) and crowdfunding. Startups have contrived to draw millions with a well written white paper and cryptocurrency.
Recently, the Block.one startup has raised the astounding amount of $4 billion and did it with a product yet to be launched. EOS, tokens sold by Block.one, do not provide “any rights, uses, purpose, attributes, functionalities and features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities and features on the EOS Platform” as specified in the ICO. Investors do not know how the most of the capital is to be used.
Blockchain in Gaming: A Historical Overview
Despite the first ICO carried by Mastercoin in 2013 with a raised amount of about $2.3 million, token sales became trendy only in 2017. The first gaming attempt to implement blockchain was made in 2014, by HunterCoin with its simple multiplayer gameplay and p2p battles for resources. This try was merely a test and had numerous refinements and fixes to be made. Better results were achieved by “Spells of Genesis,”a trading card-arcade game, in 2015, with the drawn funds of 934 BTC. This game gave rise to a new generation of crypto-gaming projects.
The next spiral of crypto-game development was the creation of the secluded universe with its own in-game currency for in-game purchases or additional content and upgrades. The representatives of these universes are: Skara, Lordmancer 2 (MMORPG), and Beyond the Void (RTS with multiplayer online battles).
As of now, crypto-gaming projects can offer even more. Companies like DMarket and EnjinCoin make it possible to sync virtual assets between game universes. Their ecosystem allows payment and payment ownership transfer without involving third-party assistance.
A dream come true for every inveterate game player has been embodied thanks to the companies like CryCash and GameMachine granting payment rewards for time spent in their game and for completing certain tasks or missions. Since the CryCash coins are available on exchange listings, gamers have a chance to earn real money for their gaming skills and time spent. Going further, CryCash has plans to partner with large game platforms and offers to reduce Indie game developers’ costs for player acquisition providing them access to the CryCash user base.
ICO Versus IPO
Speculating on the subject of why ICO is better for gaming projects than IPO, its core distinctive features should be emphasized.
- An ICO is similar to an IPO with the difference of issuing coins or tokens rather than securities or company ownership. The IPO provides ownership rights according to the number of shares you have. Coin ICOs only provide the rights to participate in a particular project, and token ICO support ownership or royalties in a project but not the company commencing the project.
- Although, investors’ rights are usually detailed in an ICO, it’s understood the ICO provides a decentralized decision making process as opposed to the centralized one of the IPO supporting vertical management with a CEO and board.
- IPO financial information is issued in compliance with the exchange the IPO takes place on. ICO financial data is either specified in a white paper and official agreement with investors or becomes open by means of blockchain providing transparency and access for practically anyone with any input amount.
- IPO companies are subjects to taxes while an ICO company avoids this collateral waste with only investors exposed to capital gains tax.
- IPO implies single sale with numerous mediators involved in a process, while the ICO can offer frequent fundraising iterations with practically no middleman.
ICO prices are generally set by the project’s creators. One of its greatest advantages is the companies can draw funds from the early stages of the development, prior to launching the viable product. The Block.one example is excellent proof of ICO efficiency.
While some countries provide legal authorization to cryptocurrencies recognizing them as a legal offer, the ICO is about to face SEC regulatory changes to protect the investors. With the rapidly growing number of ICOs, cases of fraudulent activity have become more frequent. According to SEC latest announcement, they are focusing on ICOs as a potentially important part of investment markets with businesses expecting to raise funds by way of ICOs becoming matter for regulatory action. It’s difficult to predict the outcome of SEC regulatory involvement and its effect on both investors and companies. But, on the bright side, legal enforcement should reduce the cases of scam and fraud and probably invite those investors who are staying on the sidelines due to the unregulated nature of ICO projects.
Stages of ICO Fundraising
ICOs planning differs from company to company, but an overall successful ICO experience emphasizes several vital stages of ICO projects. These include but not limited to the following:
- Pre-Announcement is the initial stage of concept shaping and its announcement in cryptocurrency communities like Reddit, Bitcoin Talk etc. The creators of the ICO prepare a brief presentation indicating the substance and purpose of their idea. The idea then undergoes changes based on questions and comments from the community to make investors more inclined to jump in. Once the most basic questions are settled, the white paper is created.
- Offering is the substance of the ICO. The white paper is finalized and contains the project’s main details like timeframes, amount of funds required, financial means for sale (usually tokens), cost per token, investors’ rights, etc.
- When the ICO is signed and the campaign start date is announced. the marketing stage begins. This is a key stage for project fundraising.
As for the specific fundraising stages of an ICO, there are normally three of them:
- Private Sale is sometimes a closed token sale aimed at collecting funds for the official launch. At this stage, tokens can be bought with big discounts or bonuses.
- Pre-Sale is an in-between stage with the cost of tokens lower than during the official ICO campaign, but higher than at private sale. Discounts and bonuses are also provided. Some investors consider it the most profitable stage as they can buy tokens at a discounted price and later sell them at the official price during the ICO campaign to make short-term investments.
- Token sale campaign or ICO usually starts with an offer to buy tokens on the company’s platform. Later tokens become available on public cryptocurrency exchanges. This is commonly taken as confirmation of the company’s payment capacity.
When it’s clear how to attract funds to blockchain projects, the question of drawing labour resources should also be considered. The process of ICO creation demands certain human resources for different campaign or product stages like content writing, SMM, translation, running functional testings, promotion and marketing, etc. Recruiting permanent staff is not practical since the need for certain resources changes as the project progresses. Plus, permanent staff tends to work for actual money.
That is when Bounty campaigns come in handy with a great variety of tasks solved by means of outsourcing staff for the price of the project’s tokens. One task for one token price. In terms of saving, this solution is practical since tokens are coded out of nowhere, without any actual fund outgo. Bounty campaigns have another valuable advantage. Since they are mostly unregulated if the company does not like the quality of the task fulfilled, they can simply not pay for the services. That grants risk free project’s development without any collateral waste or damage.
The Rise of Skill Based Crypto Gaming and ICO’s
The swift development of new gaming platforms and applications has made it possible to call the development sphere the most significant digital gaming platform. With the rise of Bitcoin, Litecoin, and Ethereum, various new altcoins and tokens have been trying to claim the Gaming Cryptocurrency throne. However, not everybody can achieve spectacular results in a short period.
The list below shows the emergence of top skill-based crypto gaming projects in-development or already available around the world.
Tradeplayz provides an online gaming platform offering players a fair chance to engage their skills in any game including chess, backgammon, quiz games, etc.
The unique fact making tradeplayz standout is it makes it easier for gamers to use cryptocurrency to play for real money. On this platform, all the gamers are able to win cryptocurrencies by their skills securely and anonymously.
TradePlayz is a mobile platform for playing «Fantasy Trading and Investment» with real winnings/rewards based on real value through the TPZ token. The company believes the best elements of gaming, excitement and passion for trading and investments can be obtained from an honest and fair platform that is equally thrilling. With these elements decidedly in mind, the project has coupled with blockchain technology where all games are held between real people. Thereby, players create the unique and thrilling personality and environment of the product .The main Tradeplayz focus is educating people about how to invest including an opportunity to be rewarded in a real capacity.
The project strategy is comprised of two macro phases: The first is build the technology and liquidity for the platform as a B2C operator to prove the desirability, integrity, and credibility of the solution to selected local markets with strict observance of legal standards, Afterword, it is proving retention and consistent growth by volume and expanding globally.
ZED tokens have been made available by the unrelenting team at Tradeplayz for potential players to use on their platform. This token remains the key currency for different gamers to play on their platform. However, other cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Ethereum Classic, Dash, Zcoin, Bitcoin Cash and many other cryptocurrencies are also allowed on the platform. This provides a great opportunity to play with almost any cryptocurrency on the platform. TradePlayz ZED tokens are innovative, valuable and lucrative. At the same time, it’s an ERC20 Ethereum based utility token. One big advantage with this ICO is the company has a product people are playing every day.
Truegame is a unique iGaming product; users are already playing more than a dozen different games (scratch cards, prize draws, lotteries, gift boxes, etc.). Furthermore, this is the first token crowdsale with a fully working iGaming project to receive positive feedback from professional community.
The project was launched in the year 2017, and has received lots of positive feedback from the professional community and focus groups, has grabbed player attention and has prepared an effective marketing strategy to attract as many users as possible to the platform.
Unlike most projects going to token crowdsale, the TrueGame infrastructure is based on the technology of blockchain. Of course, there are not many spheres in which blockchain can be very practical. However, one area of immense use is iGaming as blockchain technology is able to solve many existing issues and dramatically change the modern market.
The global mobile gambling market is predicted to grow more rapidly, at a CAGR of 18.84% during the period 2017–2021. This market is considered to be one of the most profitable online businesses. The key problems are the opacity of the casino processes and, as a consequence, the player’s distrust in the casino management. The player can not check the integrity of the game or the rally and cannot be completely sure of the integrity of the game organizer. The user cannot be sure the casino administration has funds for the payments, and whether the promised Jackpot can be provided. But in this case, Truegame tries to provide full transparency All funds are contained on a smart contract to automatically pays out winnings without the participation of the game organizer. Anyone can check the availability and the size of the Jackpot.
As for tokens, TGAME, the utility token, is the main component of the architecture and economy of Truegame. They are released on the Ethereum platform according to the ERC20 standard. The total number of tokens released is 300,000,000. More tokens beyond this number are not planned to be released. Tokens allocated for the team are held for 12 months with subsequent release of not more than 5% of the total number of team tokens per month.
One of the major global retailers in the video and PC game industry, the Kinguin company, has launched an ICO for its next-generation online marketplace on the Ethereum blockchain and powered by ERC23 compliant Krown tokens. Today, Kinguin is a marketplace for digital games, items, and related services. Kinguin has catalyzed $92m in turnover for 2017. It is one of the premier go-to platforms for Gamers wanting to save on gaming purchases and acquire in-game assets. Kinguin aims to serve as a decentralized provider of digital games, items, and services. This enables global, player-to-player trade at the highest levels, empowered by blockchain and smart contracts.
The tokensale is part of Kinguin’s two-year plan to raise $50 million through a series of private and public rounds. The company says each round is tied to a new product launch, and allows investors to participate in the development and testing and to track its progress. A peer-to-peer network to buy, sell, and trade digital games and other game-related services allows gamers to buy, sell and trade games and in-game items with high transparency and security as well as monetize services like coaching and in-game training.
Kinguin enforces stricter-than-market-standard criteria in the ICO approval process, and all rounds adhere to KYC (Know Your Customer) and AML (Anti-Money Laundering) policies. Moreover, the project has been able to engage MC2 Solutions to develop its smart contracts which undergo independent third-party security and code audits.
The company uses the Ethereum blockchain network as a system of accounting completely secured from attacks, fraud, and data mutability. Every bit of information from the first block to the one-hundred millionth Krown, processes securely through smart contracts. As a result, Gamers and merchants can trade with confidence, see proof of ownership, and access historical data from all transactions recorded.
Gaming Projects with ICOs in 2018
This is a gaming project based on blockchain and crypto technology. It uses the benefits of decentralization and cryptography to make cheating impossible. The platform provides the best forms of technologies implemented in an online gambling and gaming platform. Fatum has not been limited to an online casino. It is a platform where users can play various games. There is a low commission charged on each game which is less than other online casinos. Because of the fee structure, they have no stake in who wins or loses.
To ensure fairness and use of unpredicted, random numbers, Fatum has come up with the RNG Coin. Since there are a lot of vital problems with cryptography, decentralization, and randomization, it has allowed Fatum to solve them. The Fatum tokens are used to play the games allowing the games to be transparent. The FTM tokens can be used to play via smart contract and classic game modes.
Hybrid Betting is an Ethereum-based betting game without a mandatory house edge. The project model is totally different compared to any other betting platform out there. No quotes, no man in the middle, simply competitors playing against each other at the same level. This betting game platform is based on its own token, HYB, an Ethereum-based (ERC20) token.
The Hybrid Betting profit model is based on the number of shifts played. Each sporting event can be a shift and takes a small fee at the end of the betting phase (when punters make their decision) before an event starts. Events shift can be composed by one sports event or more events together. The project sets up all the events shifts, but in the future, it is considering events shifts created by players.
Hybrid Betting has fees from 0.5% for bigger events to 2% for smaller events; no matter how low this fee is, it is pure profit for Hybrid Betting as the company doesn’t have funds at risk during play.
The Hybrid Betting Crowdsale began on June 14th, 2018 at 12 p.m. UTC. It lasts until the $4,000,000 soft cap, or the $7,000,000 hard cap has been reached. Those wishing to invest in Hybrid Betting via purchasing Hybrid tokens have the opportunity to do so via the Hybrid crowdsale. The funds received from the crowdsale go to fund the further development of Hybrid Betting including third-party contract security audits and further web/application development.
This is a decentralized marketplace where investors and fans can invest in clubs or players and obtain returns by buying and selling future benefits guaranteed by their image rights, player transfers, prize money, salaries, ticketing, TV contracts or any other income they receive. Fans from all over the world are able to invest large or small amounts of money in their clubs or athletes and are bound to future revenues the clubs and players bring in.
The GLOBATALENT platform helps the global sports community obtain financial support to carry on their activities, promote healthier lifestyles, and eliminate third parties usually taking advantage of clubs and athletes with financial needs.
The investment process is automated with the help of Smart Contracts using Blockchain Technology. This ensures token trading in a fast, secure way. In 2017, The Sports Industry generated revenue of $100 billion worldwide.
MonsterBit is an analogue of the famous cryptogame with interesting additions for both players. The company took the successful project and made made it stronger in functionality and more vibrant in design. To the normal reproduction and a unique DNA was added the maturity of heroes at the expense of feeding them. All users buy and sell monsters of different ages and generations. All transactions in the system are made via Ethereum in the currency of ETH.
The token holder receives Token MB to buy SYSTEM monsters which generate the system. The User can buy or sell the token at the inner market. This is the main goal of the company: to enter the external market. Plus, token holders automatically become sellers of all the valued goods in the game with the System monsters generating, selling and providing the profit. 1 token = 1 System monster.
RankingBall is an innovative gaming platform unlocking a new future for sports and esports, transforming fans from idle spectators to fully engaged participants. RankingBall has developed its own skill-based game using real-time data from live sports and esports events to merge Daily Fantasy Sports (DFS) with Bingo. This gameplay allows fans to put their skills to the test while leveling the playing field with blockchain. Players can enjoy RankingBall games while watching live matches having fun by competing with other players, and to earning rewards based on their performance.
The unbeatable advantage of the company is the way players engage with the sports/esports they are watching within one app. By combining the best elements from existing fantasy sports websites and adding the unique bingo-like card format, it adds more excitement and competitiveness to the way sports and esports are viewed.
Gamico is a platform where gamers can earn money by playing video games. Gamers and game fanatics are able to play, compete, and monetize their skills and time spent playing their favourite video games. Gamico offers bounties various game achievements and milestones allowing everyone to explore fun, new ways to earn GMC. This decentralised platform ensures fair play for all. Users can submit match scores to verify results or get free GMC for verifying other matches.
Furthermore, at Gamico, all people are committed to protecting players’ and stakeholders’ interests and continuously work towards creating a safe, reliable, and fair platform. This is why the company has chosen the unique approach of blockchain technology and smart contracts.
- Public Escrow (GMC custody, smart contracts, and distribution)
- GMC Transaction Verification (fraud/tampering prevention via blockchain)
- Data/Record Integrity (accuracy of records)
What Can We Expect from Future Gaming Industry Development?
The online gaming skill platform is growing at a voracious rate. It is linked to both the eSport and gaming markets. In 2016, skill games captured about 10% of the mobile market which was around $4.3 billion. According to gaming expects, this is expected to hit $7 billion by the end of 2020. With this, the popularity of skill-based crypto gaming is predicted to appreciate and keep growing with rapid speed each year.
ICOs as a great alternative for funds-drawing also have great demand and popularity. However, there are some difficulties one should keep in mind. Share with us the names of gaming projects you participated in or some other top gaming projects deserving people’s attention.
Blockchain as a New Spiral of the Gaming Industry Development and Monetization was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.