With the esports industry projected to surpass $5 billion in market value by 2029, the oft-heard phrase “stop wasting your time on video games” probably needs an asterisk attached.
Buoyed by streaming platforms and YouTube making celebrities of top players, competitive gaming has gone global, though it would be a mistake to say improvements can’t be made.
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Blockchains hold significant promise for the industry, particularly where players’ rights and earning potential are concerned.
Among other benefits, distributed ledger technology (DLT) can unlock fresh revenue streams, promote player empowerment, and ensure a level playing field among gaming competitors.
This isn’t some pie-in-the-sky vision of the future: bridges have already been built between the seemingly disparate worlds of sport and blockchain.
Some of the planet’s most successful football clubs, like Barcelona and Manchester City, have embraced fan tokens, blockchain-based assets that furnish holders with perks like voting rights over club decisions and VIP experiences. Esports outfits like Team Vitality and OG Esports have followed suit.
If you think this is an extremely niche area, guess again: last October, fan token trading volume soared past $1 billion in a single 24-hour period.
From Tekken to Tokens
Imagine informing a talented gamer fighting their way through Tekken in the mid-90s about blockchain and digital tokens.
They’d assume you were under the influence of certain mild-altering substances. But the suitability of blockchain for esports – or rather the suitability of web3 tech generally – is tough to contest.
While blockchain is the immutable ledger upon which transactions are stored, smart contracts automate payments for competitors, who can earn tokens for victories, milestones, or even just tournament participation.
Fans, meanwhile, can win rewards for their loyalty, receiving tokens for watching a certain number of streams or engaging with an esports team or guild.
These tokens, which are often tradable on secondary markets, create a dynamic economy where value flows freely. For evidence, just look at the NFT market: in 2021, NFT volume totaled $24.9 billion.
While many NFT projects have sketchy utility at best, esports is a different ballgame (literally) with real players, legitimate games, and a growing audience. Integrating web3 tech into esports not only promises to incentivize engagement but lets players and fans share in the ecosystem’s growth.
Another cool feature of smart contracts, in particular, is that they can be used to trigger payments when certain conditions are met, like an esports player seeing out his or her contract with a given team or sponsor, or winning an event.
Thanks to high-speed, low-fee blockchains that are purpose-built for gaming, players also get to keep a bigger chunk of their earnings, while sponsors and organizers benefit from transparent, auditable transactions.
Deeper Integration
Evidence of the convergence of esports and blockchain is all around. Take FIFA’s recent collaboration with tech studio Mythical Games as an example.
The pair have teamed up to develop FIFA Rivals, a forthcoming free-to-play mobile game in which players compete to compile the ultimate XI.
In this respect, the release is similar to Mythical’s smash hit NFL Rivals, which has racked up over six million downloads and features collectible NFT cards.
Built on the scalable Mythos blockchain, FIFA Rivals includes an integrated marketplace where players can freely trade cards of football stars past and present, while facing off in arcade-style gameplay. The game also promises to offer esports competitions for the finest players, with tokenization likely to feature prominently.
Then there’s Coliseum, a Paris-based platform making waves with its seamless gaming tournament setups via Telegram.
Backed by The Chenin Group, Kraken Ventures, and Kevin Durant’s 35V – all of whom contributed to its $3.2 million raise last September – Coliseum uses the Guardian Network, a layered verification framework, to review every match, result, and player action.
As a consequence, cheating is practically impossible. Gaming guilds, meanwhile, get to grow, organize, and reward members effortlessly.
Competitive gaming has come a long way in a relatively short time period, a remark that could just as easily be applied to the web3 sector.
The synergies between the two are difficult to ignore, and with things like token rewards, automated payments, peer-to-peer marketplaces, and decentralized autonomous organizations (DAOs), decentralized tech is setting the scene for richer game economies, incentivized fans, and fairer tournaments.
As the esports market barrels toward $5 billion, blockchain isn’t just coming along for the ride – it’s gradually edging into the driver’s seat.
