Gamification
The gaming industry and crypto industry are a match made in heaven.
They just haven’t realized it.
The gaming industry is printing cash. U.S. video games sales reached record breaking $43.3 billion in revenue in 2018. This is up 18% from $36.9 billion in 2017.
The video game industry continues on record breaking trajectory.
Improvements in smartphones have allowed more sophisticated games to function and given rise to the mobile game industry. Last year the global video game market generated $134 billion in revenue in 2018 with mobile games accounting for almost half at $63.2 billion.
Smartphones have invaded our lives. We spend hours and hours connected to our phones. Bulk of the time spent on social media and gaming.
What separates mobile gaming from console/pc gaming is that one is able to play mobile games anywhere. Instead of having to sit in front of the television or computer for hours at a time you are able to be playing constantly throughout the day on your smartphone.
Mobile game developers want you to be playing their game constantly, but they also know that they need you to take breaks and actually live your life.
The way these developers have been able to combine real life and video game life is brilliant. Instead of demanding your full attention as console and pc gaming does, they demand your attention every hour or every other hour.
The consistency in mobile gaming makes it far more addicting and profitable than previous gaming.
Video games are fighting for the most valuable thing:
your attention.
If they are able to get your attention they are able to create the mechanisms needed to get you to spend money on the game.
What makes a game great is the mechanisms that are existent in the game to get you to play, and to keep you playing.
This mechanism is gamification, creating the structures to have the user engage and continue engaging with you.
The Rise of Free-To-Play
Free-to-play has been around since the beginning of gaming.
In the last few years it has become the dominant model for game developers.
Free-to-play titles amassed 80% of digital games revenue in 2018, largely driven by China, which makes up 62% of global free-to-play revenue.
Tencent’s mobile Honor of Kings racked up more than $1 billion in February 2019 alone, according to Japanese financial firm Nomura. The bulk of the revenue coming from China, the game hasn’t been able to establish roots in the U.S. market.
Candy Crush series saw its player spending surpassed a worldwide total of $1.5 billion in 2018, averaging nearly $4.2 million per day, across the App Store and Google Play.
One of the largest games free-to-play games in the beginning was Runescape which was a massive multiplayer online role-playing game. The reason I bring up Runescape is two fold.
- Because I didn’t play many video games when young and Runescape was one of the only online games I played
- Because the economy that existed within the game is going to make a comeback
In Runescape you were able to make serious online money doing quests, collecting resources, and doing a myriad of other things to go from rags to riches.
It was the place where you can start with nothing and end up with extremely rare items that could be sold on the market.
But we will come back to this later..
The recent success of free-to-play games like Fortnite prompted large video game developers to shift significant attention and resources to the such a model.
While the typical video game makers were comfortable making a ton of money selling $60 games to customers.
They saw Fortnite selling nothing and making $2.4 billion in revenue in 2018.
Fortnite allowed anyone to play their game. This allowed millions of people to enter their sphere of influence. As people flooded to play the game, Fortnite began pushing season passes and selling skins to people that were into the game.
Immediately the large video game makers saw the money signs and began shifting in that direction.
This has brought on releases such as Apex Legends. EA, makers of Apex Legends, rapidly moving their video game developers to build out battle royale games and allow anyone to play for free. Apex Legends then went on to reach 50 million players in one month. Completely blowing Fortnite out of the water and further cementing the free-to-play model.
The Rise of Gamification in Crypto
Gamification will take a leading position in the cryptocurrency space in the coming years.
The cryptocurrencies, exchanges, wallets, and funds that are able to understand and take advantage of gamification will reap plenty of value.
Gamification is essential for the success of cryptocurrency.
The ideologies that are being created and developed in the crypto space need ways to spread their ideology. Building a team of adherents and followers is essential. Gamification is the way to build and spread the faith and accrue followers.
Exchanges will begin to look more like video games.
The gamification of exchanges will be geared towards keeping you engaged daily.
If an exchange can keep you logging in daily it will be able to build a stronger relationship with you and build a loyalty that will make it less likely to have you leave.
This loyalty will be supported by the exchange token metrics and ways to benefit for holding the exchange token.
You become attached to the exchange, to the ethos, to the company. You become a shareholder. You become a follower of the ideology.
The whole point of gamification is to get you engaged and keep you engaged.
Tokenization tied with constantly evolving and improving gamification strategy will separate the top exchanges from the rest.
Exchanges will look like video games. Communities will be created from these gamification strategies that will strengthen the exchange and the development of the exchange token.
Cryptocurrencies will benefit greatly from development teams that understand the power and need for gamification. Systems like masternodes and staking models have begun to understand the value of providing dividends to the holders of the cryptocurrency.
Gamification is beginning to enter the token schemes of cryptocurrencies because of the need to attract and maintain followers. Followers of the cryptocurrency ideology.
The same psychological underpinnings that are being used in exchanges will be used in cryptocurrencies.
Gamification models will be different, similar to how different rules are for games.
Every game has it’s rules and objectives.
The future of gamification is more gamification.
We have only begun to scratch the surface of gamification and cryptocurrency adoption is fueling this development.
The Rise of Gamification in Crypto
There is a psychological difference between hard currency and digital currency. Hard currency is physical and when you spend it you feel it. Digital currency is digital and when you spend it you feel it differently.
Cryptocurrency benefits from the physiological difference that exists between hard currency and digital currency.
It is easier for someone to play around with $1,000 in cryptocurrencies than it is to play around with $1,000 in cash. Digital currencies feel like playing cash even though it’s real cash.
This difference makes gambling and using it more likely.
The reason people blow their money margin trading is that it seems like play money. Being conservative becomes more difficult to do.
This makes crypto be the perfect source to gamify. Crypto is made for gamification.
Exchanges Fueling Gamification
The importance of gamification has begun to take root in exchanges.
Exchanges are the heart of crypto. This is where the real business happens.
The legitimacy, power of narratives, strength of trends are fought and pushed in the price.
It doesn’t matter how great a project is or how great the developers are.. if the asset isn’t well traded and psychologically pushed, it faces failure.
The importance of exchanges in the crypto space makes gamification rise from there far more likely than anywhere else. And this is where gamification has risen.
The exchange game is cut throat because of the upside that exists if you are able to rise to the top. The top is a liquid and highly traded exchange.
Binance, in the recent years, has risen to the dominant position. Many previously dominant exchanges have dropped in influence and are creating new strategies to recover the lost dominance.
There are new exchange entrants in the recent year that have begun to test new ways to grow. This includes trade mining, giveaways, and tokenization.
The basis for the new exchanges is creating a token for their exchange that gives the user perks that are valuable for them.
$BNB is currently at a $3 billion market capitalization. This is the cryptocurrency of Binance that gives perks for customers that use it and it is constantly adding new benefits.
Recently Binance Chain when to their main net and are now in the process of opening their decentralized exchange.
Other new exchanges such as FCoin and Coinex have lauched their own token that provides many benefits for holding it and used trade mining to distribute it.
This trade mining led to huge perks for using the exchange and airdropped to the users that are more prone to use the exchange. Trade mining incentivizes traders to trade and receive the exchange token in return for their trading.
If you hold a token for a specific exchange you are already prone to use it more as you are supporting one of your investments (regardless of the size of your position).
This is the gamification that exchanges have been moving towards in the last year.
Creating a token for the exchange that builds a strong ideology around the exchange.
This strong ideology around the exchange creates devoted followers that will trade on their exchange instead of the competition.
Exchange tokens are in its infancy. The gamification aspect is still being worked out.
Crypto Meets Gaming World
As crypto begins to grow in value and size, the level of interest from game developers as well as hiring from the gaming industry will begin to happen as exchanges and crypto companies begin to move towards gamification.
The experts on gamification are game developers. The individual that have been building game economies, game incentives, and game plots that keep the gamers hooked and wanting more.
This relationship between them and crypto companies will be strengthened as more gamification models are proved successes and create significant amounts of value overnight.
The movement of game developers into crypto will bring gaming companies into crypto.
There will then be a combination of games with cryptocurrencies as the method of currency in the game economy.
In the present economy of games. The relationship is between the game and the user. This relationship is beneficial for gaming companies because they have monopoly over the users that demand the goods they offer.
These goods can be skins, perks, exclusive content, higher ranks, badges, etc. As we have seen with many free-to-play gaming there is an economy that can be created overnight as a game rises in popularity.
The incentives to open up a market within games will become more likely as cryptocurrency expands its influence in the gaming industry.
In-game content will be able to be traded for real money and the monopoly that the video game has with the user will be opened to the market.
The prices of in-game content will follow based on supply and demand. Users will be able to make money by playing the game and understanding the in-game market. This mechanism will makes games more addicting and bring a financial component that had been lacking in the past.
The bulk of the revenue that was going towards game developers will be going towards the sustainability of the in-game economy. Game developers will be focused on creating legitimate economies within games and stand to benefit more from doing so than the current method of operation.
This new method of economies will be risky, but the upside is so great that it will happen.
Crypto will play an integral role in creating and facilitating the creation of these economies.
Runescape created the Grand Exchange which allowed users to buy and sell almost any tradable item.
The price of items where set based on supply and demand and Jagex’s (Runescape company) pricing algorithm.
The price of items are actively updated based on recent trade prices and volume.
Jagex, like a government, was able to intervene when they saw manipulation happening.
Economies that sprang up like Runescape will flourish once Crypto and Gamification is released into the world.
Whole new markets that were once closed off will open up and change the video game industry completely.
Similar to the trend and impact Fornite had on free-to-play gaming, crypto gaming economies will be a wake up call.
Conclusion
Gamification will play many important roles in the cryptocurrency industry.
The trend towards it will speed up in the coming years and transform the ways humans interact and how economies are built up.
The reliance we had on large state actors and systems will be opened up to any individual, organization or community that wants to build its own economy.
If the community and incentives are strong enough there will be able to have economies built within it.
The reason gaming will be the game changer is that it is able to attract and build a huge market in a short amount of time. This allows it to build a liquid market that other industries would have difficulty doing. The easiness of economic building will spur innovation that will influence other industries.
Technology has allowed gamification to explode in usage.
The cryptocurrency leaders of the future will be the ones that harness the power of gamification and cryptocurrency: building ideologies.
