The mobile gaming industry is the fastest growing sector of the total global gaming market. According to forecasts by AppAnnie, consumer spend on mobile games will cross the $100 billion mark by 2021. This is more than double the spend of $50.4 billion, recorded in 2017.

With the increasing penetration of high-quality smartphones and advancements in low-code technology solutions, the future looks promising. However, in recent years, the mobile gaming industry has been facing some issues that have drawn the attention of blockchain developers.

The Inherent Problems Existing in the System

According to an article by TokenDesk, the main problem lies in the difficulty of monetizing games for free-to-play game developers. Profit making mechanisms are not very productive and also carry the risk of deterring users. Also, the method of building and distributing games is totally different, with developers finding it difficult to collect payments, especially when users are located in different countries.

The in-game economies are also governed by laws of supply and demand, just like the real world. Games attempt to simulate these conditions, by making the items of value finite, so that gamers can get rewarded when they spend more time and money to acquire items like weapons and armour. This reward system, which keeps the games interesting and alive, could also prove expensive, in some cases, for the developers.

Then there are fraudsters and dupers. According to an article on TechCrunch “for every legitimate virtual item sold and downloaded, there are 7.5 virtual items that are lost to fraud”. Fraudsters look for vulnerabilities in a game and create duplicates of items that are supposed to be rare, in high-demand and expensive. Stolen credit cards are also used to purchase in-game items, to be sold later on discount.

Blockchain to the Rescue

Jared Psigoda, the CEO of BitGuild, believes that blockchain and smart contract technology can enable developers to design games that would otherwise be impossible to build, according to an article on Howtotoken. Companies are turning to blockchain technology to enable gamers to trade digital goods amongst themselves. This solves the problem of loss of digital goods, once a player stops playing the game.

According to an article on AppFutura, blockchain with its transparent and immutable technology, will help prevent duplicate transactions, thereby helping in the growth and balance of in-game economies. Registries could be formed, which would store all information regarding the ownership of items, which would curb their duplication and in turn keep inflation levels down.

Blockchain will also make payment systems more effective and secure, with the ability to handle wide-scale payments, without the risk of downtime. An article on Inc.com states that tokenization will give wider payment and publishing solutions to the developers. The ability of cryptocurrencies to facilitate financial transactions, without the need for a centralised bank, is something that will be valuable for this niche industry of gaming. Cryptocurrencies will facilitate value extraction in the mobile gaming sector. According to an article on CCN, “blockchain tokens could serve as the universal unit of value transfer, which influences the liquidity necessary in the gaming marketplace”. Whether the underlying tokens are used as rewards or in auction, they are what allow the fulfillment of gaming contracts.

With the help of blockchain, developers will be able to combat some of the issues that exist today. With this technology, mobile gaming can truly reduce the whole world to one small global village.

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