While Bitcoin struggles to make it above $7000, the value cryptocurrency can provide outside of the trading realm is becoming evident within the billion-dollar gaming industry.
Cryptocurrency and blockchain technology were hot topics during the Game Developers Conference (GDC) that took place in San Francisco last month. As I made my way through the record-breaking crowd of 28,000 industry professionals, I constantly heard “cryptocurrency” and “blockchain” being mentioned.
DMarket, a leading global marketplace that uses blockchain technology to transform virtual gaming items into real world assets, hosted a blockchain and gaming panel discussion during GDC. The purpose of the panel was to provide an explanation as to why cryptocurrency and blockchain technology are having an impact on the gaming sector, which is expected to become a $143 billion global industry by 2020.
Breaking It Down: Why Gamers Understand Crypto
Jared Psigoda, the CEO of BitGuild – one of the companies that spoke on DMarket’s gaming and blockchain panel at GDC – explained that the concept behind digital currencies has resonated with the gaming community for years.
Gamers in particular understand cryptocurrency because virtual money has been a part of gaming for the last 10 years. For example, dating back to the World of Warcraft, there was a one-hundred million dollar market for buying digital gold. This was the main currency used in World of Warcraft to buy in-game assets, like dragons. However, it would take gamers a tremendous amount of time to acquire digital gold, so they would use real money instead to buy in-game assets.
As a result of gamers using fiat currency (i.e.USD) to purchase gaming items, free-to-play games become very expensive to play, which is why gaming companies are able to generate so much revenue.
To put this into perspective, recent findings from SuperData show that the gaming industry generated $108.4 billion in revenue in 2017. Mobile games were the biggest sector, generating $59.2 billion, followed by PC games, which generated $33 billion last year. Both the PC and mobile sectors were driven by “free-to-play”games. An estimated $82 billion was spent on these games.