Undoubtedly, the gaming industry is flourishing in this COVID-19 pandemic. The sales of video games have progressed rapidly since the lockdowns, and economic shutdowns have catered people with more leisure time.
The game industry, regardless of becoming less prominent due to specific attractive applications of blockchain, might be made fascinating for a generational leap forward through the emergence of asset tokenization. It’s a strategy that can attract an entirely new wave of investors towards itself as well as present numerous advantages to 2.5 billion gamers all over the globe.
Tokenized Teams and Sponsorships
In July 2019, the well-known Dota 2 Esports Team OG was tokenized by Socios- a voting platform powered by blockchain. This process generated Fan Tokens that can be brought on the Socio Marketplace and sold, enabling the holders to take part in polls and acquire distinctive OG prizes.
Though it is not the best method of making use of Blockchain technology, however, it marked a significant first step in the tokenization of esports, which will probably take towards a point where tokenization of all contracts, sponsorship deals, and teams will take place.
Tokenization of indivisible assets such as brands, team players, and realistically everything can be done with the help of this system and can be sold to nearly anyone. In this way, the gaming industry attracts a broad range of investors and brings fans and their favorite teams nearer.
Through the blockchain technology, the esports team will be enabled to establish community-backed sponsorships, funding initiatives, sales of tokenized-merchandise, and maybe tokenized contracts, allowing the investors and fans to possess the team partly.
With the system, we might also see a time when esports teams tokenize potential winnings in exchange for an upfront payment. It leads to developing a whole new kind of investment. Along with the chances of the establishment of nonfungible tokens and tokenized-merchandise, identifiers such as membership might experience esports teams arranging additional revenue sources.
The tokens showing fractionalized contracts, brands, and the team will be present, like every other token, on the fixed blockchain ledgers which allow peer-to-peer transfers with no need of lawyers for conducting ownership transfers. The liquidity of formerly illiquid esports assets will be significantly increased, along with raising the process’ transparency.
Moreover, the ownership can be proved to third-parties for acquiring services without consulting any mediator or token issuers. These form an integrated web and a frictionless market.
Tokenized Video Games
As stated by Newzoo’s Global Games Market Report 2020, revenues of 159.3 billion dollars are expected to be reached in 2020 by the global games market, increasing 9.3% each year. The credit goes to 2020, being one of the most advantageous years for the game industry.
The main reason for this astonishing increase is the transformation of games from physical media-dependent ones to digitally available ones that are brought from the seller or via dissemination platforms of video games. Mainly from the gush in the mobile game industry lately, that is of 68.5 billion dollars worth and constitutes nearly half of the game industry.
Regardless of this increase, the investors interested in the game industry have been limited to purchasing stocks in their preferred publishers, dissemination platforms, and game houses. On the other hand, large-scale investors are capable of acquiring an advantage from the success of their property and private equity in studios.
This narrowed investment environment is ideal for changes by tokenization technologies.
Instead of gratifying backers with an advance game copy or extra material, tokenized publishers and developers can offer equity in the form of digital security tokens. Each token will indicate fractional intellectual property ownership and the profits it generates and enabling the organizations to go public through an initial public offering or acquire instant funding.
In-game currencies and objects are also ripe to go through the tokenization process.
In-game assets can be made accessible by game developers to a broader range of investors through allotting token, based on blockchain, to in-game assets and enabling them to be traded on external platforms, also allowing the transfer to of NFTs among games and catering opportunities for Ready Player One Style cross-game communications and cross-platform play.
Till now, the tokenization process has not been accepted by any AAA title. However, tools and platforms composed for facilitating the process, such as Loom, TokenScript, Worldwide Asset eXchange, and Enjin, are under evolution. Someday, these platforms might cater to the road map for the first traditional tokenized asset and in-game currencies of the world.
Casinos – On the Forefront
Though the tokenization will change every segment of the game industry, some sections have retaliated firmly in the same way as the online gambling industry.
Presently, dozens of web-based cryptocurrency casinos exist possessing a token component included as their operation segment. It usually exists in the form of enabling gamers to acquire tokens as an additional prize to play and disseminate tokens to players as the “buy-in” process part, in which gamers transform cryptocurrencies into tokenized chips.
These applications can be regarded as more disciplined instances of tokenization. However, it has been taken to a new level by certain cryptocurrency casinos and tokenized their proceeds. It enables the investors to buy tokens, which indicate a fragment of revenue produced by the platform.
Till now, the yields of these platforms have been decent and usually exist in the form of a few annual percent ratings because of the cryptocurrency gambling volatility.
Their deep-rooted success has indicated that this investment process is most wanted nowadays. It shows that the 1st tokenized casinos’ generation might be a green flag for new things and that an entirely player-owned casino may be unavoidable.
