Great guest post by JT Nguyen, CEO and Co-Founder of Gameflip
Imagine spending hundreds of thousands of dollars, and countless hours of gameplay, to earn rare weapons, armours, cosmetic skins and other digital goods—only to find that when you switch to a new game, your investment isn’t worth a penny.
If you’re a gamer, this is undoubtedly a familiar, frustrating scenario. Although earned goods hold substantial intrinsic value for players, there is currently no safe, transparent marketplace that allows gamers to buy, sell and trade these goods in exchange for real currency.
At Gameflip, we’re shifting the industry paradigm so that a gamer’s digital goods have real value, across games and platforms. The key to this game-changing solution lies in the blockchain.
Where do gamers go to sell their earned digital goods? In today’s industry, the choices are limited and risky. What typically first comes to mind is the Steam Community Market. Although this is a fine option if you want to trade for other purchases within the Steam platform, it doesn’t allow you to convert anything to real cash.
Forums are also a popular choice. However, these unofficial marketplaces fail to offer buyers and sellers any real protection. When I was the COO of Aeria Games, our top players were spending thousands of dollars each month on digital goods, and the vast majority turned to Reddit to sell them for cash. Unfortunately, many of these transactions ended in scams. This was a frustrating situation for us for two reasons: we couldn’t do anything about these transactions because they weren’t occurring on our platform, and these scams caused many of our best players to drop out of the game.
Numerous third-party sites try, unsuccessfully, to resolve these issues. OPSkins, the largest and probably the oldest in this category, brings in $120,000 per day in transactions. But as a whole, these third parties lack transparency and typically only support Steam goods—making them far from an ideal solution for gamers or publishers.
The blockchain opportunity
As the CEO of Gameflip, the most comprehensive gaming digital goods marketplace, I can attest to the huge demand for selling gamer-earned digital goods. These goods are typically more valuable than ones purchased through publishers, and they tend to hold that value over time. They also represent a massive untapped revenue stream, which we estimate will boost digital gaming’s annual revenue from $94.4 billion to $1 trillion or more. Yet this demand has been largely unmet—until now.
On Oct. 13, Gameflip is launching the Initial Coin Offering (ICO) for FLIP, our digital currency and blockchain ecosystem. Through FLIP, gamers will finally have a safe, transparent marketplace for buying, selling and trading all their digital goods (both publisher-purchased and gamer-earned). Smart contracts will protect gamers from fraud, and blockchain technology will empower people from all over the world to make trades, no matter their game of choice. And here’s the best part: gamers will be able to trade universally on all marketplaces, not just Gameflip.
This is undoubtedly good for gamers, who will finally have the flexibility to buy, sell and trade their hard-earned digital goods in exchange for real value. But it’s equally good for publishers, which, in turn, makes it a boon for the industry as a whole. Gamers will purchase more digital goods, confident that they can recoup their investments in a secure, liquid marketplace. Publishers will also reap the benefits of a new revenue stream—receiving a commission each time one of their game’s players makes a transaction using our smart contract. To make it easy for publishers, we’ve developed open-sourced plug-ins and software development kits that will allow their games to recognize the transfer of digital goods to and from gamers’ blockchain wallets.
Gameflip’s 2 million gamers have shown that there’s a consistent, unmet demand for selling all their digital goods online. Through blockchain technology and cryptocurrency, we’re answering that call—and transforming the gaming industry for both gamers and publishers.