Gamer-earned digital goods on Blockchain could be a trillion dollar opportunity
Disclaimer – This article is written by the team at Gameflip.
There’s no denying that the gaming industry is booming. This year, more than 2.2 billion gamers will generate $108.9 billion in game revenue—87% of which will come from digital games. And that number is only expected to grow.
But if you think $94.4 billion in digital gaming revenue is astounding, consider this: that Newzoo figure only includes the sales of direct-from-publisher digital goods, not the goods that gamers earn themselves. Giving gamers the opportunity to trade their hard-earned digital goods on the blockchain could drive the industry’s annual revenue figure well past the $1 trillion mark. Here’s how.
An increasing demand for gamer-earned goods
Direct-from-publisher goods, which typically take the form of “keys” or “consumables,” have been one of the most successful monetization routes for game publishers using the free-to-play model. But the goods that gamers earn by playing the game—defeating other gamers, levelling up, beating bosses, and more—also hold immense value. Depending on their rarity, some of these goods can command top dollar. Take, for instance, a StatTrak M9 Bayonet Doppler skin, from CS: GO, that sold for $23,850, or a Dota 2 Pink Ethereal Flame Wardog, for which one gamer paid $38,000.
The volume of gamer-earned digital goods is already much higher than direct-from-publisher digital goods. Gamer-earned goods are more valuable than the ones purchased through publishers, and they seamlessly aggregate within the game economy. Yet while healthy revenue is generated from the sale of direct-from-publisher digital goods, the immense demand to be able to sell gamer-earned digital goods has been largely unmet.
Most digital goods are currently locked within a single game. This means that some gamers might have spent hundreds of thousands of dollars, and countless hours of playing time, to earn digital goods, only to find that the value of their investment is zero when they stop playing the game.
At Gameflip, we’ve seen the market for gamer-earned goods grow rapidly, without a trading solution that benefits both gamers and publishers. To realize this trillion-dollar opportunity, we’ve developed a new decentralized ecosystem that facilitates the secure, transparent trading of gamer-earned digital goods across games.
The blockchain opportunity
Not surprisingly, numerous platforms have already tried to facilitate the sale of gamer-earned goods. Unfortunately, most of these marketplaces are short on transparency and fraught with fraud. Forums, for example, do not offer buyers and sellers any protection, which often leads to fraud. The Steam Community Market only allows sellers to cash out their trade for other purchased within the Steam platform.
In the three years since our team launched Gameflip, we have built one of the largest digital goods marketplace platforms in the industry. Our platform is home to more than 2 million registered users, 500,000 of which are active monthly. We’re now leveraging our knowledge of the gaming industry and goods marketplace to grow and scale a decentralized ecosystem for trading gamer-earned digital goods–where gamers and publishers both win.
Built on Ethereum, our ecosystem will provide a fully transparent, frictionless infrastructure for transacting digital goods. With our new FLIP token, we aim to unlock digital goods from each individual game and create liquidity for them through decentralized trading. Blockchain technology allows safe, secure trading to take place not only on the Gameflip platform but also universally across any and all marketplaces. This, in turn, will advance the entire digital goods ecosystem.
How does it get to $1 trillion? Under this structure, the demand for digital goods will increase, causing gamers to gain trust and buy and trade more. Multiplier effects will kick in, and the overall market will grow exponentially.
A win-win for gamers and publishers
At first read, you might be wondering why publishers would support a decentralized ecosystem for earned-goods trading. But in reality, this is a clear value-add for both gamers and publishers–although none of our competitors has even thought to tap into the publisher base as the solution.
Between our core team, our advisors and our investors, we’ve got connections among some of the biggest names in game publishing. And with years in the industry ourselves, we understand the unique challenges game publishers face to own their game from the bottom up. And we’ve created a way for them to do just that.
Using Gameflip’s new platform, gamers will have unprecedented flexibility to buy, sell and trade the digital goods with other gamers. These transactions will be made in a zero-fraud environment that could not have existed before the blockchain.
This will generate additional revenue for publishers. First, it will encourage gamers to purchase substantially more digital goods, at higher prices, because they know they will be able to recoup their investment later in a liquid marketplace. Whenever gamers make a transaction using blockchain smart contracts, publishers will also receive a commission—opening up an entirely new revenue stream. Gameflip has created an incentives framework to provide additional tangible economic benefits for publishing early adopters.
We shattered our Pre-Initial Coin Offering (Pre-ICO) goal at 112%. When we kick off the sale of our FLIP tokens on Dec. 4 we’ll be doing more than offering a gaming-specific cryptocurrency. We’ll also be shifting the gaming industry paradigm to reflect the values of blockchain: transparency, security and a win-win for the entire ecosystem.
Check out Gameflip – https://goo.gl/Ge1Pyu
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.