There is no doubt that Covid-19 has boosted the video gaming industry, with more consumers enjoying home-based entertainment.
The gaming industry is projected to attract 3 billion players by 2023 with consumer spending on games projected to grow to $196B by 2022. (Source: https://newzoo.com/insights/articles/games-market-engagement-revenues-trends-2020-2023-gaming-report/)
Online gaming is one of the most touted blockchain use cases. The ability for players to wholly own in-game items — thanks to the creation of non-fungible tokens (NFTs) — is an innovation that did not exist previously. They’re so revolutionary that we will cover NFTs in a future article. Moreover, blockchain brings an unprecedented level of transparency and decentralization to the online gaming sphere, to the benefit of the gamer.
However, the blockchain’s features of decentralization, individual asset ownership, unique digital items, and transparency are also disrupting the gaming industry and changing the way players interact with in-game ecosystems. What has been missing, however, is a trusted, in-game currency that can be used cross-platform as well as outside of a game’s infrastructure, in digital ‘dollars’ (or other local stable currencies).
Stablecoins are a class of cryptocurrencies, whose value and stability is pegged to a reserve asset. The reserve asset could be a fiat currency such as the dollar, the euro, the yuan or a commodity such as gold. Stablecoins offer the instant processing, security and privacy benefits of cryptocurrencies, without the associated volatility.
Over the last three years, stablecoins have continued to make headlines. Tether (USDT), with a current market cap of $20.5B, was the first widely adopted stablecoin and mostly used as a tool for traders to easily go in and out of their cryptocurrency positions into a fiat-backed unit of account, without having to go through the arduous process of cashing back out into fiat itself.
Here are some of the potential benefits stablecoins will bring to the online gaming industry:
1. Monetization of in-game currency
In-game currency is typically not worth anything outside the game in which it serves its purpose. Each gamer has to manage multiple different in-game tokens in the various games they play. Next to none of them, however, can be used to make real-world purchases as there are no native ways to monetise this ‘currency’. While some players may sell in-game currency or items on platforms such as eBay, there is no simple and easy way for gamers to monetise their virtual cash. Stablecoin integration would alleviate this issue and enable seamless conversion of in-game currency to a recognised store of value.
2. Create entire in-game payment infrastructures
Building in-game payment infrastructures that allow players to buy, sell, and trade virtual items and to enable game developers to make mass, programmed payments is complex and takes time. Using blockchain-powered stablecoins, in-game payment infrastructures can be built within a fraction of the time and at a much lower cost as the technology stack already exists.
3. New revenue opportunities for gamers
Through the integration of stablecoins as in-game currency, gamers can easily spend their acquired in-game currency outside of the game. For dedicated gamers, this would enable them to monetize their gaming activities, which, in turn, would enable them to spend more time gaming.
In the past five years, several “gaming coins” emerged to address the challenges of the legacy in-game token ecosystem. However, none of them have succeeded, which can be attributed to slow adoption, high price volatility, and a lack of interoperability. Digital dollar stablecoins — like USDC and USDT — are better equipped to meet the needs of game developers, from global game manufacturers and to blockchain gaming ventures.
The combination of decentralization, transparency, price stability, and the global recognition of the US dollar as a currency, makes stablecoins ideally positioned to become the go-to in-game currencies in the future of online gaming. As a digital multi-currency wallet, the WadzPay App is designed to support not just Bitcoin, Ethereum and Alt coins but also Stable Coins such as USDT and IDRP and even Sovereign / e-currencies such as e-Yuan and e-SGD.
The objective of the WadzPay App is to simplify the complexity of using digital assets (cryptocurrencies) for accepting and making payments, and bring them to the masses using familiar methods, with a simple user-interface. The WadzPay App provides convenient access to manage funds and make payments.