This article is the second part in the series How Blockchain is revolutionizing gaming. If you missed the first part, be sure to read our article on blockchain gaming from A player’s perspective.

While some of the below points are similar to my previous article, they are written from a publisher’s perspective rather than a player one. The concept of aligning incentives is paramount to creating a product that both publishers and players will benefit from and utilize.

Provable Rarity: Attracting players & collectors

Both players and collectors want to invest in items that they believe will appreciate in value, or earn unique items in-game. The blockchain allows visibility into rarity by being completely decentralized & transparent. With a blockchain explorer you can quickly see how many of a certain type of item have been created, and whether more can be created in the future. Collectors, players, and traders can rest easy, knowing the value of their investment.

Collectors are necessary to every successful game, and having collectible items with provable rarity will attract them. Games like Magic the Gathering have survived for so long because collectors have been in the space for 20 years; keeping card prices high and player interest in the rarest cards. Players will come to own provably rare assets and earn items that can be proved unique and unobtainable by other players.

Cross Game Assets

Publishers are always looking for exciting new ways to attract players to their game. The blockchain delivers a universal standard format for in-game items, allowing one game to easily utilize items from another. Developers have complete control of which assets, if any, are able to be used across multiple games.

Using CryptoKitties as an example: A Kitty Car racing game can attract CryptoKitty enthusiasts by implementing CryptoKitties into their game — immediately exposing their games to millions of players who own CryptoKitties! Attracting more players makes more money for the Kitty Car publisher and for creators of CryptoKitties. As more people wish to use CryptoKitties in the kitty racing game, they must go to the original CryptoKitties game to purchase the CryptoKitties!

Funding games through item sales

Raising money for a game is not an easy task, and indie publishers turn to platforms such as kickstarter or indiegogo to fund their dreams. Unfortunately the success rate of a fully funded campaign on these sites is under 10%, making it impossible for these games to fund their development. Many great games never get the funding needed to get into the hands of players.

Many game projects fail to receive funding because they do not provide enough incentive for their supporters; many supporters have to wait years to receive the rewards that they purchased. With gaming assets being created on the blockchain, creators can reward their supporters with tangible items to use immediately after contributing to the project.

This provides more incentive supporters to fund prospective games. We’ve seen these “founder sales” of blockchain based items run on platforms such as OpenSea, Kickstarter, and most notably Gods Unchained which raised over $3m in funding through item sales.

Revenue Sharing Secondary Marketplaces

Currently game publishers do not receive any benefit from allowing users to buy & sell their items on the secondary market (players selling items for $$$). Secondary markets such as the Steam Community Market, PlayerAuctions, OPSkins and more have been taking 15%+ commissions from gamers buying and selling items for cash. Game publishers get none of this revenue. Blockchain can offer a better solution.

Blockchain marketplaces are unique because they have a lower operating cost than traditional secondary marketplaces, meaning that they are able to operate with a lower profit margin. Instead of the normal model where 15%+ of each transaction is paid to the secondary marketplace, a lower fee can be charged to the end user and split between the marketplace and game publisher. For example, if the marketplace fee is 10%, 5% goes to the marketplace and 5% goes to the game publisher — so if a CryptoKitty was sold for $100, Axiom Zen (creator of CryptoKitties) would get $5.

This completely changes how game publishers profit from their games. Games no longer need to be filled with micro-transactions in order to become profitable; they can profit from a functioning secondary market through their players buying and selling items on the blockchain based marketplace — from which the game gets a fee. Games with a large-scale secondary market can see revenue increases of as much as 25% by simply taking advantage of this one part of the blockchain ecosystem.