Why the gaming industry is fueling the next wave of branded tokens
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The gaming industry, which spawned NFTs in the form of CryptoKitties, has long paved the way for new forms of customer engagement and monetization.
While NFTs aren’t exactly new to the game, their uses are maturing. The games also explore the use of branded tokens and stable coins. This will mean big changes for games and adjacent industries, from mainstream brands to sports, eSports and entertainment.
Games prove the pitfalls and benefits of crypto
The games give players the chance to explore and even create a virtual world. From within a game, players can design avatars, collect rewards and treasures, and more. In some ways, playing a game brings gamers closer to virtual life. But there are limits to the extent to which this life reflects the real world, especially when it comes to the economy of a game.
A gamer who invests hard-earned time and money in a virtual world is at the mercy of the game operators. Typically, anything invested in a game beyond the fun of playing benefits game creators. , but disappears as a sunk cost to players when they stop playing. Crypto promises to change that.
Non-fungible tokens (NFTs) help codify a player’s relationship with a game. With NFTs, players can establish custody of a digital object through a tamper-proof online ledger. They can then trade or sell digital items on a stock exchange or auction house.
CryptoKitties offers a good example to understand how it works in an ecosystem that is essentially composed and driven by NFTs. When the game has other components, NFT dynamics can get tricky Diablo 3 Auction house.consider the failure of Blizzard
Branded tokens and stablecoins introduce a new element into the gaming ecosystem that helps bind and stabilize the tokenomics of a system with or without NFT. Specifically, a stable cryptocurrency provides players with a means by which they can move from the in-game economy to the real-world economy. or “transparent and borderless payments for a global network of participants,” as Tatiana Koffman called it in a recent Forbes article room.
Game creators take advantage of this by enticing gamers with new features and benefits for games. Players benefit from a system that can reward their participation in the virtual world with financial gain in the real world.
While the gaming industry commands hundreds of billions of dollars worldwide and is expected to grow to over $ 314 billion by 2026, it is a decided niche and complex market, reinforced by the introduction of tokenomics.
So why should anyone care? Because how games symbolize their infrastructure will define how consumer-oriented brands gamify their engagement with consumers. In short, games will play with crypto and social app creators, celebrities, athletes, artists, and other gaming-related industries such as sports and eSports will follow suit with the winning innovations.
Opportunities for tokenized gamification in other industries
Unlike Bitcoin and other cryptocurrencies, NFTs can have a graphical user interface or a front end that makes them very easy to understand for average consumers.
In addition, their uniqueness can lead to new forms of engagement, as in the case of “The fungible», An open edition work of art sold in collaboration with Pak. More exciting though, NFTs will help connect the digital world to the real world of art, music, services and more.
In the music world, NFTs will put power in the hands of musicians historically at the mercy of producers. By creating NFTs linked to digital music files, musicians can sell these files and connect directly with their fans, without the need to use intermediary platforms like Spotify and iTunes.
A superfan can boost the future of an artist. Artists will have a better chance to monetize their work, which will make the world of music more accessible and diverse.
What about the tokenization of a sports contract? It also happens. Last year, NBA player Spencer Dinwiddie announced plans to launch a digital token associated with his contract. The NBA balked at some of the more speculative aspects of the project. In the end, Dinwiddie was able to sell his title-backed SD8 tokens.
The athlete sees this as a method for players to leverage their talent to create instruments of debt and, as a result, greater financial freedom. As in the music industry, freedom comes from the athlete’s ability to dislodge an intermediary.in this case, a sports league and connect directly with fans.
NFTs have spread to the world of amateurs, creatives, athletes and even charities. Artist David Datuna, known for eating a $ 120,000 banana at Art Basel 2019, teamed up with Dole on an NFT campaign to raise funds and raise awareness about hunger.
How do NFTs come into play? Artist and business partner Dole believes digital tokens will help generate buzz around the urgent need to address food insecurity.
Like NFTs, branded stablecoins have the ability to propel cryptocurrency out of the world of developers, economists and traders and into the general public. Every year in the United States, businesses generate more than $ 50 billion in reward pointsa third of which consumers leave on the table.
Cryptocurrency promises to make rewards look and act more like cash. The simpler and more transparent a rewards system, the more likely it is to attract and reward loyal customers.
Customer benefit is a reward that can be easily used within a particular brand ecosystem or transferred to another, sold on the stock exchange, or exploited in some way to generate interest. In other words, stablecoins increase the liquidity and fungibility of branded rewards programs.
From gaming to retail, art, entertainment and beyond
The gaming industry brought us the original NFT but still faces challenges with adoption.
First, developers should consider developing NFTs on an infrastructure that ensures affordability and liquidity, which means low transaction costs and the ability to handle large transactions without harming the network.
Second, the games will need an ecosystem native support platform and payment network that can operate in cash, crypto, NFT, and branded stablecoins to ensure interoperability between games and l gaming industry and other markets.
Understanding all of this will require trial and error and significant capital. The results will be worth it and go way beyond the nichealthough in full swing game market.
Daniele Mensi is the Managing Director of DigitalBits Foundation.
Disclaimer: Opinions expressed on The Daily Hodl do not constitute investment advice. Investors should do their due diligence before making high risk investments in Bitcoin, cryptocurrency, or digital assets. Please note that your transfers and transactions are at your own risk and that any loss you may suffer is your responsibility. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in Affiliate Marketing.
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