The Problem with Virtual Items

Virtual items are an increasingly popular method of monetization.

Epic Games’ instant classic, Fortnite is currently earning its developers over $1.3 million per day through virtual items alone.

Allowing players to customize their experience through microtransactions and the purchase of virtual items is quickly becoming an industry standard.

Unfortunately, there are many downsides in the way virtual items are currently being handled and these issues are costing developers, and their customers, money.

“We have a problem, games are a waste of time.”

Unsecured Transactions

Billions of dollars are currently being lost due to fraud and chargebacks on credit card transactions.

It is estimated that for every legitimate virtual purchase made, there are 7.5 virtual items lost to fraud.

The blockchain, however, can secure the management and transfer of virtual items by handling the transactions, delivery, and storage of those items in an immutable ledger.

No value retention

Players buy virtual items to customize their characters and give them a leg up on the competition, but these virtual items offer little else.

The players don’t own the item, they don’t consider it an asset, and they are resigned to the fact that they will either lose, or cease to use, the item in the future.

This lack of future worth limits the psychological value of an item and decreases the overall amount of purchases that a player is willing to make in-game.

The blockchain, however, is designed to protect ownership of digital assets. Even though in the past those digital assets were limited to being cryptocurrencies, it’s become obvious that a far more ubiquitous form of digital asset can slide right onto the blockchain with ease.

By existing on the blockchain, gaming items will gain all of the wonderful benefits once exclusively enjoyed by cryptocurrencies:

Decentralization

Transparency

Heightened security

Faster and cheaper transactions

Immutable proof of current and prior ownership

Crowdfunding Restrictions

One of the most popular ways for indie developers to fund their projects is through crowdfunding sites like Kickstarter, but they currently have limited in-game incentives to offer their backers.

The blockchain allows indie developers the ability to offer exclusive/rare/discounted virtual items for immediate delivery to backers. This means players would receive their items straight away, store them in their secure wallet for later, and be able to use them immediately after the game is released.

Temporary Value

Currently, virtual items are only useful within the game in which they were purchased.

This reduces the value of those items in time and space, meaning they’re only valuable within one game, and only for the period of time in which the player is interested in that game.

The blockchain offers developers the opportunity to dramatically increase the value of a virtual item by enabling the protected use of that item in an unlimited array of games, apps, platforms, devices, websites, forums, and retail outlets.

It would take co-operation from an astounding amount of people and organizations but in this reality, the narrative of Ready Player One’s metaverse would include decentralized governance that would make the movie’s entire adversity arc null-and-void.