Video gaming has become much more than a hobby for players worldwide. From professional eSports teams to lucrative streaming careers, the gaming industry has evolved over the past decade. Today, there are roughly two billion global gamers who spend over $100 billion on gaming every year, and the majority of this revenue stems from the purchase of in-game items. For example, Fortnite has generated $1 billion in revenue entirely from in-game purchases.
While the amount of money players spend on these digital items is staggering, in most cases, the game creators retain ultimate control over what players can and cannot do with the items they purchase. For example, many prohibit the transfer of item ownership and restrict item’s use to a certain game or platform. They can also revoke or ban access to the gamer’s items at their discretion – regardless of how much money the player spent on them. In the end, gamers do not truly own the content that they purchase.
To examine this ecosystem in-depth, Worldwide Asset eXchange™ (WAX) commissioned a study of 500 game developers and 1,000 video gamers in the United States. The study found that the video gaming community wants more freedom and flexibility over their in-game virtual items, a concept known as true ownership of in-game items. Interestingly, it is not just gamers but game developers are also interested too.
True ownership of in-game items – defined as allowing players to buy, sell, trade and use their items with no restrictions from third parties – would enable a free-moving virtual items market.
The inception of blockchain technology has the potential to change the status quo of video gaming and ownership protocols. WAX’s study found that game creators are currently missing out on a valuable market segment by failing to enable true ownership of digital items.
For example, 68% of gamers said that they feel players deserve to truly own the items they purchase. Combine that with the 66% of game developers who said virtual items are a pivotal component of their game’s monetization strategy and item value is being suppressed by publisher or developer control. While in-game items currently play a key role for game developers, 86% believe tradeable virtual items will be even more important in future games than they are today.
Gamers and game developers alike see the benefits of allowing players to freely buy, sell and trade their virtual items. According to the survey, 69% of game developers believe when items are freely tradable, it increases the value of those items, and 62% of gamers feel having the flexibility to transfer virtual items from game-to-game would make spending money on those items more worth it.
And, nearly 75% of gamers said they would purchase virtual items if they could use them in multiple games – which is made possible by true ownership. Of game developers surveyed, 84% would create cross-compatible in-game items if the technology allowed them to do so.
“True ownership of digital items is the future of video games. Players and game developers are both eager for a free-moving virtual item market, and the community’s interest will shift towards games that offer this,” said William Quigley, CEO of WAX. “By enabling cross-compatibility, which is made possible by true ownership, game developers can stand out from the millions of free-to-play games created every month and attract the most valuable segment of players to try out their game.”
WAX found that over half of game developers cited marketing as the highest unforeseen expense in game development. Developers are starting to see true ownership of items for what they could be in the future – a customer acquisition tool. Developers of free-to-play games that enable cross-compatibility of items could attract players who are already proven to purchase in-game items. Since they’re proven to be purchasers of in-game items, they may have a much higher propensity to buy more from a new game than players who never spend money on in-game items.
You can read more of the report here.