[Feature] Are Blockchain Games the Turning Point for Traditional Game Giants?

Compiled By: Coinlive
Author: Blockbeats

In the traditional gaming industry, platforms and distribution channels are extremely important. Even games developed by small independent studios can easily gain traction and visibility on platforms like Steam if they are favored by major publishers.

But what about in the world of Web3 and blockchain gaming? We have seen many attempts to build Web3 gaming platforms, but so far, they still lack the quality and visibility of traditional gaming platforms. And in the short term, it's hard to expect them to evolve quickly.

Since native platforms are not yet mature, do current blockchain games have to rely solely on promotion through comprehensive platforms like Twitter and YouTube? The answer is no, because the doors of traditional gaming platforms are not completely closed.

Steam's Blockchain Ban
On October 15, 2021, the world's largest electronic game distribution platform, Steam, expanded its listing rules, explicitly stating that applications built on top of blockchains that allow for the exchange of cryptocurrencies or NFTs will not be allowed to be published on Steam.

Along with the new regulations, Steam has also started to crack down on existing blockchain games. The first blockchain game to be removed by Steam was Age of Rust, a game that used NFTs and Bitcoin as in-game rewards. The developer of Age of Rust stated on Twitter that they had communicated with Steam officials, who cited the reason for the removal as the game's items having real-world value, which Steam does not allow on its platform.

However, in the Steam marketplace, there are a large number of in-game items that are directly priced and traded in fiat currency. To purchase these items, players need to top up their Steam account, but cannot withdraw any money from their account back to their bank account. Do these in-game items count as having real-world value?

Months later, in an interview, Gabe Newell, co-founder of Steam and known as "GabeN" to players, explained why Steam chose to ban NFTs and cryptocurrencies.

"Blockchain is a great technology, but its current use is rough, and 50% of cryptocurrency transactions are fraudulent, which is very bad. Also, the volatility of cryptocurrencies means that people don't know how much they are paying, because most people's salaries are not calculated in cryptocurrencies. Today you paid 99 cents for this thing, and tomorrow that number might be 498 dollars, which can be frustrating. I don't think cryptocurrency payments are a good model right now."

Although Steam is a huge platform like an iceberg that fills the entire ocean, it is not the only PC gaming platform.

Embracing Web3: Epic Games
While Steam has expelled blockchain, its biggest rival, Epic Games, has found an opportunity.

Epic Games Store was launched in 2018 to compete with Steam, which had near-monopoly status in the PC gaming market. To attract developers and manufacturers to sell games on its platform, Epic reduced the commission rate on game sales to 12% and an additional 5% reduction for games developed using its Unreal Engine. What is Steam's commission rate? It's 30%. Epic hopes to gain exclusive publishing rights to games by buying them out.

To grab market share from Steam, Epic's craziest move was to directly pay game developers tens of millions of dollars and then give away these games to players for free at a rate of one game per week, and even increasing the frequency during holidays. When Steam directly kicked out a game that exceeded the genre and contained only one type of element, Epic took action.

On the same day that Steam announced its Web3 ban, Epic Games CEO Tim Sweeney took to Twitter to welcome games that use blockchain technology, as long as they comply with relevant laws, platform terms, and are age-rated. He also specifically emphasized that Epic Games welcomes innovation in the technology and finance sectors.

However, just a few days ago, Tim Sweeney said, "We won't touch NFTs because the entire field is currently entangled with various tricky scams, interesting decentralized technology foundations, and scams." What is Epic Games' view on blockchain games and NFTs?

Rails or Shackles?
Although the CEO expressed a welcome to blockchain technology, at a more specific level, Epic Games has thrown out many restrictions for blockchain games. The following requirements must be met when products that use blockchain technology are released on the Epic Games Store:

The Epic Games Store does not allow blockchain products to offer paid goods and services. Products that use blockchain technology cannot use the Epic Games Store payment mechanism for any goods and services, including basic game goods and services and non-blockchain-related transactions.

Links to blockchain, NFT, or cryptocurrency stores are not allowed on the Epic Games Store page.

Products that use blockchain technology cannot be offered to users in China and South Korea (blockchain products are blacklisted in these regions).

Products may not facilitate gambling. Products cannot support gambling with traditional currencies or digital currencies that can be directly exchanged for traditional currencies (i.e., cryptocurrency, digital currency, or other digital assets cannot be exchanged for traditional currencies or other cryptocurrencies).

The Epic Games Store has the right to remove products that use blockchain technology from the store at any time based on market action (such as responding to issues that may have a negative impact on players).

In addition to these, the following conditions must be met:

The "Blockchain Additional Terms" (as well as the issuance agreement) must be signed.

Must be rated in all issuance regions.

Should comply with all relevant blockchain technology laws and regulations in the product issuance region.

Should understand and accept 100% responsibility for payment, customer support, fraud detection, and refunds related to the product.

All terms, conditions, risks, and other relevant information related to the use of blockchain technology in the product must be clearly disclosed.

Furthermore, Epic also has requirements for the storefront details page of blockchain games. When listing a blockchain game, additional information needs to be provided:

Blockchain/NFT product label. When listing a game, NFT and blockchain settings should be checked as "Yes" in the common details section. After checking, the blockchain/NFT label will be displayed on the product page.

Eating crabs of blockchain games
Although the additional regulations and requirements may seem cumbersome, they are not necessarily unacceptable to many blockchain games.

On June 6, 2022, the blockchain game platform Gala Games announced that it would launch the Web3 Battle Royale game Grit on the Epic Games Store, but the release date has yet to be determined. When I saw this news, I was looking forward to what the first mainstream blockchain game on a gaming platform would look like, but I didn't expect that even today, the release date for Grit is still unknown.

On September 16, 2022, Blankos Block Party became the first blockchain game to land on the Epic Games Store.

Blankos Block Party is an open-world multiplayer game with a style similar to Fall Guys. Players can freely design and build their own levels, and collect and trade in-game avatars called Blankos, which are NFTs. Blankos Block Party uses the private blockchain of its developer, Mythical Games.

Mythical Games, the developer of Blankos Block Party, is valued at around $1.2 billion and has raised nearly $300 million in funding from numerous well-known institutions such as a16z, Binance, Galaxy Digital, and WestCap. What does $300 million mean in the traditional gaming industry? The record for the most expensive game ever developed is held by Cyberpunk 2077, which cost only $174 million.

However, despite the extravagant funding, the performance of Mythical Games and Blankos Block Party has not been satisfactory. Trading of NFT avatars has been very sluggish, and the game itself has not generated much discussion.

Chainmonsters, originally scheduled to be launched on March 6, 2023, is the latest attempt by blockchain games to enter traditional game platforms. Chainmonsters is a multiplayer online game similar to Pokémon, where players can battle using pets called Chainmons, and collect and trade them as NFTs, with blockchain services based on ImmutableX.

However, on March 6th, Chainmonsters, which was scheduled to be launched on Epic Games Store, iOS App Store, and Google Play simultaneously, was only successfully launched on Google Play due to approval issues on the other two platforms despite there being no issues with the game itself.

Conclusion:
Steam kicked blockchain games out, and Epic Games' motivation seems to be to attack Steam rather than blockchain games themselves. However, despite the many limitations and troubles, the existence of Epic has not completely closed the door to blockchain games on traditional game platforms.

Perhaps it will take more time to work out how blockchain games can coexist with platforms like Epic Games and fully utilize their resources. The evolution of blockchain games requires the participation of more and broader players, whether it is to attract more users to the game itself or for the mass adoption of Web3. We hope to see more blockchain games land on traditional game platforms in the future.