A rev­o­lu­tion is com­ing – one which may change the na­ture of videogames and the way we play them. It may even change our lives for­ever


The blockchain is bor­ing. Yes, it’s the tech in­dus­try’s lat­est ob­ses­sion, a buzz­word whose mere men­tion will send in­vestors the globe over scur­ry­ing for their wal­lets. (A strug­gling drinks com­pany saw its stock price al­most triple af­ter it changed its name from Long Is­land Iced Tea to Long Blockchain). But it’s ul­ti­mately about data­bases on the in­ter­net, a deeply tech­ni­cal in­fra­struc­ture which only engi­neers truly un­der­stand. Those that do get it will tell you that it’s in­cred­i­bly pow­er­ful. The blockchain is a com­plete re­vi­sion of how data­bases work – and, since data­bases drive al­most ev­ery­thing, it has the prom­ise of chang­ing how the world works in many ways.

The re­sult is that blockchain is both dif­fi­cult to un­der­stand, and feels a lit­tle dan­ger­ous. It’s be­hind the rise of cryp­tocur­ren­cies such as Bit­coin and Ethereum, which have risen in value so sud­denly that their bub­bles look as if they’ll pop any day. It’s be­hind the cur­rently strato­spheric prices of GPUs, as blockchain min­ers have rushed to cash in, build­ing rigs with mul­ti­ple graph­ics cards to ex­tract money from the gold rush, con­sum­ing en­tire coun­triesworth of elec­tric­ity as they go. It’s be­hind fundrais­ing cam­paigns which at best award in­vestors with val­ue­less cur­ren­cies on the prom­ise they will be worth some­thing in the fu­ture if enough peo­ple be­lieve in them, and at worst dis­ap­pear with all their cash.

To out­siders, then, blockchain is a world in which noth­ing seems real, a Wild West of reg­u­la­tion-bust­ing prospect­ing for for­tunes by spec­u­la­tors, chancers and fraud­sters. But to in­sid­ers, blockchain is so much more. It’s a cat­a­lyst for a rev­o­lu­tion, the bringer of a new world.

And now it’s be­gin­ning to sweep videogames up with it.

“Blockchain is go­ing to be trans­for­ma­tive to the game in­dus­try,” says David Lau-Kee, an in­vestor at Lon­don Ven­ture Part­ners, a VC firm which has pre­vi­ously backed the likes of Su­per­cell, Nat­u­ralMo­tion and Unity. “I’m ex­tremely bullish on what it can bring to the game sec­tor as a whole.” Lau-Kee has watched the rate at which blockchain-based busi­ness pitches come to him speed up from a trickle two years ago to a tor­rent to­day. He’s had nearly 30 over the past cou­ple of months, and while he can im­me­di­ately dis­miss most of them for be­ing bad busi­ness ideas or sim­ply scams, he feels that many have spe­cific iden­ti­fi­able and mea­sur­able ben­e­fits to both play­ers and the in­dus­try in gen­eral.

But there are al­ready many block chain­pow­ered start ups al­ready run­ning. Unikrn, which has high-pro­file back­ing from Hol­ly­wood ac­tor Ash­ton Kutcher and celebrity in­vestor Mark Cuban, of­fers its users the chance to bet on pro­fes­sional games of Counter-Strike: Global Of­fen­sive, League Of Leg­ends, Dota 2 and Rocket League. First­blood is an­other bet­ting plat­form which al­lows any player to en­ter tour­na­ments in the hope of win­ning real prizes. Playkey uses blockchain to man­age

peer-to-peer game stream­ing while also build­ing a net­work of blockchain min­ers on gam­ing PCs. Many star­tups are found­ing new cryp­tocur­ren­cies to raise funds, cre­at­ing value out of pure busi­ness ideas. Jon ‘Neverdie’ Ja­cobs, the En­tropia Uni­verse player who sold a vir­tual as­ter­oid for $635,000 in 2010, has in­te­grated the Neverdie Coin into the En­tropia

Uni­verse so it can be earned and traded. “The blockchain’s ad­van­tages are un­lim­ited. Like the in­ter­net in the early days, we see un­lim­ited po­ten­tial,” Brian Fargo tells us. Pre­vi­ously founder of de­vel­oper/pub­lish­ers In­ter­play and in­Xile, Fargo is now throw­ing his weight be­hind Ro­bot Cache, a dig­i­tal-game mar­ket­place based on the blockchain. “We are only scratch­ing the sur­face with Ro­bot Cache. I love tech­nol­ogy and find­ing ways to con­nect the dots to cre­ate some­thing new, and the blockchain re­minded me of the feel­ings I had when I first be­came knowl­edge­able of the In­ter­net.”

For Hil­mar Pé­turs­son, CEO of Eve On­line maker CCP, the blockchain is en­tirely com­ple­men­tary to the val­ues that Eve is built upon: em­pow­er­ing play­ers, and build­ing a uni­verse that’s de­fined by their ac­tions. “I be­lieve an econ­omy built on the blockchain is a more valu­able econ­omy than one im­ple­mented on a pro­pri­etary data­base, and it also opens up the idea that peo­ple can truly own their as­sets,” he says. For Pé­turs­son, the blockchain could bring about a rev­o­lu­tion in the re­la­tion­ship play­ers have with in-game items and as­sets, break­ing down the bound­ary be­tween the na­ture of phys­i­cal and dig­i­tal ob­jects.


In Jan­uary 2018, in Lyon, France, a young com­pany named B2Ex­pand moved into a new of­fice to ac­com­mo­date its rapidly grow­ing staff. It had re­leased its first game, Be­yond The Void, in Steam Early Ac­cess the pre­vi­ous Septem­ber. A one-on-one RTS set in space, Be­yond The Void in­cor­po­rates an econ­omy and player ac­count sys­tem that’s run on an Ethereum-based blockchain. Two years ago, how­ever, the whole com­pany was just a one-man in­die pro­ject made by con­cept artist Max­ence Burgel. But then his brother, Eric, heard about a new game built on the Bit­coin blockchain, Spells Of Ge­n­e­sis. This mo­bile trad­ing-card game, de­vel­oped by Switzer­land­based Ever­dreamSoft, uses a blockchain to man­age its trad­ing econ­omy. If you own a card in the game, you own it, rather than Ever­dreamSoft. You’re free to trade it for other cards and for real money, com­pletely out­side Ever­dreamSoft’s con­trol.

Ex­cited by the con­cept, Eric en­cour­aged Max­ence to in­cor­po­rate the blockchain into his game, and need­ing some­one to de­velop an Ethereum-based blockchain in­fra­struc­ture, they brought in Eric’s son, Rémi. “It was a re­ally new idea, a new con­cept that we re­ally liked,” says Manon Burgel, Eric’s daugh­ter and sis­ter to Rémi, who joined to work on

mar­ket­ing and com­mu­ni­ca­tions. Their con­cept was to make a se­ries of dif­fer­ent games, all to be built with the blockchain pro­vid­ing the back­bone for their economies, with Be­yond The Void be­ing the first.

As in Spells Of Ge­n­e­sis, B2Ex­pand’s blockchain stores play­ers’ in­ven­to­ries, such as avatars and ship skins, whether earned through play or bought from B2Ex­pand’s of­fi­cial shop us­ing its own cryp­tocur­rency, Nex­ium. “We can of­fer play­ers true own­er­ship of what they’re buy­ing,” Manon says. “It’s not con­trolled by us. They can trade it back and forth with­out com­mis­sion and they have com­plete con­trol.” That’s true whether play­ers use B2Ex­pand’s store­front, or if they’ve been en­ter­pris­ing enough to build their own store to in­ter­face with B2Ex­pand’s blockchain. And since Nex­ium can be con­verted into other cur­ren­cies, these items have real mon­e­tary value.

The flex­i­bil­ity that blockchain affords is en­abled by the fact that it’s trans­par­ent, which is to say that it al­lows ev­ery­one to see trans­ac­tions made on it. This means

B2Ex­pand’s item mar­ket can be read by other games. In­ter­nally, this means that own­ing a spe­cific ship skin in Be­yond The Void can be re­flected in any of B2Ex­pand’s fu­ture games. But it can also ap­pear in com­pletely sep­a­rate ti­tles made by other com­pa­nies. Not the ac­tual skin, mind you; that’s still sub­ject to the fact that B2Ex­pand owns its IP. But if Spells Of Ge­n­e­sis de­tects that a player has in their wal­let a crys­tal ship skin from Be­yond The Void, it un­locks a cor­re­spond­ing crys­tal-based card. This in­ter­play doesn’t re­quire a deal be­tween the two de­vel­op­ers, or any spe­cial func­tion­al­ity, other than the abil­ity to read the blockchain.

This con­cept of real own­er­ship and trans­parency is ex­tremely pow­er­ful. Through it, in-game items be­come trans­portable, lend­ing them a per­ma­nence that tran­scends the game in which they orig­i­nated. Imag­ine if the skins, emotes, items and achieve­ments that you’ve earned or bought in Over­watch and World Of

War­craft could have ap­pli­ca­tions be­yond Bat­tlenet. Bliz­zard has given lim­ited ac­cess to these in­ven­to­ries, but if it closes a game or goes out of busi­ness, no player can guar­an­tee they can hold on to them. “Own­ing, in an undis­puted way, an item on a blockchain – this has never been done be­fore,” CCP’s Pé­turs­son says. “It’s never been pos­si­ble to as­cribe own­er­ship in such a strong way be­fore, not even with phys­i­cal own­er­ship.”

It has a for­ma­tive name, ‘cryp­to­prop­erty’. The term was coined by game de­vel­oper Alex Am­sel, whose com­pany, Ow­nage, aims to pro­vide an open mar­ket­place for in-game items. He de­fines cryp­to­prop­erty as “Dig­i­tal prop­erty in which cryp­to­graphic tech­niques are used to con­trol is­suance, own­er­ship and trans­fer, in­de­pen­dent of any cen­tralised registry.” Ow­nage is de­signed to plug into com­mon plat­forms and en­gines such as Unity and Un­real, and to give de­vel­op­ers a place where they can mon­e­tise their in-game as­sets and take ad­van­tage of cross-game mar­ket­ing – all with­out any cost, be­cause Ow­nage makes its money from trans­ac­tion fees.

“This is what I think will be trans­for­ma­tive for games,” Lau-Kee says. “It’s own­er­ship of in-game dig­i­tal as­sets, giv­ing them tan­gi­bil­ity – and there­fore real-world value and prove­nance. It’s hugely in­ter­est­ing. Game pub­lish­ers worry about what hap­pens with their as­sets be­ing traded, but it hap­pens any­way, right? But in a way that’s out­side the game.” Trad­ing knives from Counter-Strike:

Global Of­fen­sive is big busi­ness, es­pe­cially con­sid­er­ing the game’s niche sta­tus and the lim­ited ac­cess Valve gives its users to buy and sell dig­i­tal goods and to con­vert them into real money.

It’s dif­fi­cult to know when to stop when pro­ject­ing where cryp­to­prop­erty can take games. One place is the Me­ta­verse, the idea of a shared and per­sis­tent vir­tual space which func­tions as a fully al­ter­na­tive world with a

vi­able econ­omy of its own. “If you read [Neal Stephen­son’s sci-fi best­seller] Snow Crash, what kind of tools would you use to im­ple­ment that? It screams at you that you’d use a blockchain,” says Pé­turs­son. “It’s hard to imag­ine fit­ting cur­rent sta­ple game gen­res to it, which have evolved around cur­rent lim­i­ta­tions of mod­ern-day tech­nol­ogy and cul­ture. I can en­vis­age a world a few decades from now where no one would want to work in a game econ­omy to ac­cu­mu­late game as­sets that don’t re­ally be­long to you. In a way you’re play­ing a game not only for your own en­joy­ment and to es­cape re­al­ity, but you’re also feed­ing your fam­ily, be­cause the as­sets of the vir­tual world are no dif­fer­ent to those of to­day’s econ­omy.”

Con­tem­plat­ing what this would mean for our re­la­tion­ship with games is dizzy­ing. Would we still play, or would play be­come work? What is a game if its game­play is en­tirely com­modi­tised? Will we look back to the first 40-odd years of videogames as an age of in­no­cence? Or would this trans­for­ma­tion be em­pow­er­ing? Might it make ev­ery­thing games have achieved so far seem tri­fling? Will play­ing to make a liv­ing be a so­lu­tion for au­to­ma­tion elim­i­nat­ing swathes of the job mar­ket? How­ever things de­velop, it’s im­por­tant to re­mem­ber that this no­tion isn’t en­tirely un­prece­dented, hav­ing al­ready started to be sketched out by gold farm­ing in World Of

War­craft, real-es­tate trad­ing in Se­cond Life, the depth and dy­namism of Eve’s econ­omy, and Valve’s ex­ploratory for­ays into free-mar­ket eco­nomics on Steam.

Brian Fargo’s vi­sion for Ro­bot Cache is per­haps more grounded, but in look­ing be­yond items and at the mar­ket for games them­selves, it could also be trans­for­ma­tional. Its de­cen­tralised game-dis­tri­bu­tion plat­form will sell games that can later be resold. Pric­ing is set by the pub­lisher; a resold game has the same price as a ‘new’ one. For new sales, the pub­lisher gets 95 per cent of a sale, much higher than the 70 per


cent they get with plat­forms such as Steam or the App Store. For resold games, the pub­lisher gets 70 per cent and the seller gets 25 per cent. Whether new or resold, Ro­bot Cache takes just five per cent of a sale, be­cause, as CEO Lee Ja­cob­sen says, “First, it doesn’t take a 30 per cent cut to op­er­ate a dig­i­tal de­liv­ery plat­form; and se­cond, we are get­ting a ben­e­fit from us­ing a de­cen­tralised and dis­trib­uted back­bone like the blockchain. This re­lieves us from the bur­den of ex­tra in­fra­struc­ture, which cen­tralised sys­tems re­quire.”

This busi­ness sim­ply isn’t pos­si­ble with­out blockchain. “The rea­son we can al­low the re­selling of games is be­cause we can get the un­bi­ased truth as to who the real owner is,” Fargo says. Be­cause the blockchain tracks own­er­ship of any given item, it can’t be sold to two peo­ple, de­spite be­ing dig­i­tal and there­fore in­her­ently copy­able. This means the mar­ket is lim­ited to a fi­nite stock of games, and so an econ­omy can be es­tab­lished. “We’re let­ting the ge­nie out of the bot­tle for the re­sale of dig­i­tal games,” Fargo con­tin­ues. “I ab­so­lutely be­lieve this is a win-win for gamer and de­vel­oper. The knowl­edge of know­ing one can re­sell, the so­cial dy­nam­ics of gamers strik­ing bar­gains to sell each other games and the abil­ity to get money that never ex­isted be­fore, will all serve to cre­ate a big­ger ecosys­tem for games.”

There are ques­tions yet to be an­swered, how­ever. If the com­pany goes out of busi­ness, users’ games will still func­tion be­cause their prove­nance is stored on the open blockchain, but Ro­bot Cache hasn’t yet fig­ured out if they’d still be able to sell them on. And sell­ers are paid in Iron, Ro­bot Cache’s cryp­tocur­rency. Though the plan is that it can be ex­changed for ‘var­i­ous cur­ren­cies’, its value will fluc­tu­ate; in­deed, Ro­bot Cache is ex­pect­ing that money from resold games will stay within the Ro­bot Cache econ­omy, used to buy new ones.

More­over, it’s ex­tremely early days. Ro­bot Cache was only an­nounced in Jan­uary as part of a push for fund­ing, and no pub­lisher part­ner­ships have been dis­closed. Tra­di­tion­ally, pub­lish­ers haven’t liked se­cond-hand game sales, and there’s lit­tle rea­son why they’d pre­fer the 70 per cent cut of a sold-on game sale to 95 per cent of a new one. But for Fargo, it’s all about mar­ket dy­nam­ics: the dif­fer­ence in rev­enue won’t add up to much un­less there’s a thriv­ing econ­omy, and if the econ­omy is thriv­ing, ev­ery­one wins. “We be­lieve that al­low­ing gamers to re­sell their games will be a driv­ing force for them to want to pur­chase games on Ro­bot Cache, and al­most ev­ery pub­lisher and de­vel­oper we’ve spo­ken to agrees. It’s com­pelling for them in that they will get 95 per cent from the bulk of those early sales, and the worst case is that they get the same 70 per cent to­day.”

It’s hard to say what es­tab­lished game pub­lish­ers make of cryp­to­prop­erty. There cer­tainly seems to be a dis­par­ity in the way blockchain con­verts look at the con­cept of cryp­to­prop­erty and how large and es­tab­lished com­pa­nies might. “Right now as an in­die game com­pany, we like the idea of giv­ing back con­trol of dig­i­tal as­sets to play­ers,” Manon Burgel says. “Play­ers are al­ready trad­ing knives and weapons on the black mar­ket, be­cause they like the pos­si­bil­ity of trad­ing what they’ve earned in a game. Big com­pa­nies try to dis­cour­age that, but as a small in­die com­pany we want to bring it back to play­ers. When we were kids we had phys­i­cal cards that we could give or ex­change with a friend, and no­body had any say in it. But it’s not pos­si­ble in games, be­cause you only buy the right to use items and you never see your money back.”

“It’s re­ally in­ter­est­ing to see if blockchain can bring con­ver­gence be­tween dig­i­tal and phys­i­cal own­er­ship,” says Jas Pure­wal of Pure­wal & Part­ners, a le­gal firm spe­cial­is­ing in dig­i­tal en­ter­tain­ment. “But I don’t see that it nec­es­sar­ily an­swers busi­ness, le­gal and pol­icy fac­tors which are at play. There has been, for a long time, an unan­swered le­gal-pol­icy de­bate about own­er­ship of dig­i­tal goods – whether it’s pos­si­ble to own them, and in what ca­pac­ity. In the past, it of­ten broke down be­cause we couldn’t be clear about what we meant by dig­i­tal own­er­ship. Does it mean you can de­prive some­one else of own­er­ship? Does it mean you can take it into other games? Can you de­stroy it per­ma­nently? These are all pos­si­ble with a phys­i­cal item. Maybe, from a tech­ni­cal per­spec­tive, blockchain nar­rows the dis­tinc­tion be­tween dig­i­tal and phys­i­cal goods, but it doesn’t fun­da­men­tally an­swer what should be pos­si­ble to do with dig­i­tal items. And even if you can an­swer all those ques­tions, what busi­ness need does it ad­dress?”

For Pure­wal, there isn’t nec­es­sar­ily a de­mand in the in­dus­try for own­er­ship. From Su­per­cell to King, Bliz­zard to Valve, pub­lish­ers and de­vel­op­ers have es­tab­lished for­tunes and huge player bases on the ba­sis of the ex­ist­ing un­der­stand­ing of dig­i­tal own­er­ship. Why would they want to cede con­trol? For the av­er­age Candy Crush or Over­watch player, do they want own­er­ship, or do they sim­ply want to play the game?

Still, in Novem­ber, Ubisoft’s in­cu­ba­tor di­vi­sion, Sta­tion F, specif­i­cally called for en­trepreneurs and star­tups to pitch it with ideas for blockchain busi­nesses. Suc­cess­ful can­di­dates would re­ceive men­tor­ship and of­fice space to de­velop their ideas, and B2Ex­pand were part of a pre­vi­ous round. Sta­tion F de­clined to ex­plain to us what it’s look­ing for and why, be­cause the pro­ject is too early in de­vel­op­ment, but it’s in­dica­tive of a gen­eral aware­ness among the big­gest com­pa­nies of the po­ten­tial for blockchain in videogames.

And it poses a vi­tal ques­tion: what will hap­pen to the ear­li­est adopters if and when the likes of Google, Mi­crosoft, Sony, Ubisoft, Elec­tronic Arts or Valve jump into this new space? “The risk is that big com­pa­nies can eas­ily crush small star­tups,” Burgel con­cedes. But she ar­gues that these com­pa­nies are lim­ited by their size. At the scale at which they op­er­ate, they have to make ser­vices and prod­ucts that are per­fect from their first launch. Star­tups can be nim­ble and de­velop more or­gan­i­cally. And be­sides, work­ing with


some­thing as new as blockchain is very dif­fi­cult. B2Ex­pand’s mar­ket­place took five it­er­a­tions and a year of de­vel­op­ment be­fore it was ready to launch, and through it all, the stu­dio had to mud­dle through, since its core tech­nol­ogy, Ethereum, had lit­tle doc­u­men­ta­tion and was con­tin­u­ally evolv­ing.

Still, if blockchain does prove to be as trans­for­ma­tive as so many be­lieve it will, large com­pa­nies will be com­pelled to join in. ”If Google or Ap­ple steps in and says it will help pro­vide some part of blockchain in­fra­struc­ture, then that would give blockchain a level of cre­dence and cred­i­bil­ity which would ex­pand its over­all value,” says Lau-Kee. “But there will al­ways be purists who would say that would lose one of the cen­tral ben­e­fits of blockchain. Both per­spec­tives hold some truth.” Ul­ti­mately, though, he doesn’t see it bring­ing about the es­tab­lish­ment of a new world or­der. “I think Bit­coin will be adopted and sys­tems will ac­com­mo­date it, rather than be re­placed by it. New gi­ants will emerge, but the ex­ist­ing gi­ants en­trenched in the cur­rent ways of do­ing things will adopt these new ways of think­ing.”

In­deed, Pé­turs­son can see the blockchain be­com­ing an in­deli­ble part of com­merce and cul­ture in gen­eral, whether or not it brings about the Me­ta­verse. “It will take decades for peo­ple to truly un­der­stand, but I be­lieve that own­ing dig­i­tal things in a pro­pri­etary com­pany data­base will be frowned upon be­cause it’s not true own­er­ship.”

How­ever things de­velop in the fu­ture, for now, blockchain is a world of star­tups, dreams and new philoso­phies. Noth­ing is cer­tain, and value is in the eye of the be­holder. All we can know at present is that the mar­ket, in all its shift­ing com­plex­i­ties, will de­cide.

Jas Pure­wal, founder, Pure­wal & Part­ners

Brian Fargo, co-founder, Ro­bot Cache

Manon Burgel, head of com­mu­ni­ca­tions and mar­ket­ing, B2Ex­pand

Hil­mar Pé­turs­son CEO, CCP

David Lau-Kee, gen­eral part­ner, Lon­don Ven­ture Part­ners

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