Gaming Skins and the Blockchain: Creating Real Cash Economies in Games

Gaming Skins and the Blockchain

By William Dawsey

In this article, we will be discussing:

  • GameFi: The Benefits of Decentralized Gaming Economies
  • Integrating Blockchain Technology with Games
  • But What About SDKs?
  • 6 Steps to Creating & Transferring Custom Blockchain Tokens
      1. Download Metamask to Create Wallets
      2. Create a Token Contract with Remix
      3. Use Nethereum and Unity3D to Create Player Wallets
      4. Transfer ETH to Player Wallet with Metamask
      5. Set Up Transactions with Metamask Extension and wallet.ethereum.org
      6. Send Created Tokens with Nethereum and Unity3D
  • Virtual Goods Don’t Stop Here

Though new, and radical in their own way, NFTs have exploded in popularity in the last few years. Thanks to gamers, who picked up the idea right away, having dealt with a similar concept for years in the form of rare and exclusive digital items. However, virtual places, like the current gaming skin betting marketplaces, are expensive, unfair, inefficient, and full of scams.

To rectify this, game developers merged two concepts, game skins and virtual goods, so users could invest in in-game items for profit. Like Gucci has tested the waters of the fashion industry with its augmented reality sneakers, developers want to leverage NFTs and new digital technologies to augment the gaming experience.

This blog will explore just what this means and what its future may hold.

GameFi: The Benefits of Decentralized Gaming Economies

As mobile and PC gaming has advanced, so has the industry’s interest in integrating crypto.

How Do Game Developers Make Money?

Companies usually don’t permit the secondhand trading of in-game items because they can’t make money from it. It’s simply better business to sell new skins to the player rather than allow an unregulated market to run freely within their game for users to sell skins to each other through. However, with new advancements, developers can now ensure they’ll get a revenue cut even through secondhand sales. This is accomplished using blockchain-powered technology married with gaming, a trending idea known as GameFi (or also known as play-to-earn).

A blockchain is a decentralized computer network that maintains a record of every transaction. For example, in gaming, custom gaming skins are connected to a blockchain token; whenever the item is transferred to another player, the blockchain records how the said token has moved and where it has moved to.

Consider Enjin, for example; the Singapore-based company that created blockchain SDKs for engines like Godot and Unity. Both can be used to integrate a blockchain economy without developers needing to write additional code. Using this method, developers have more opportunities to regulate third-party marketplaces and establish fees on peer trades, allowing them to automate profits whenever these items are transferred or traded.

NFTs in Gaming

Any in-game item, including armor, utility, weapon skins, pets, or any other asset, can be converted to NFT and owned, sold, or traded on the blockchain. These digital tokens represent ownership of these intangible goods. Users can further enhance their earning potential (depending on their game) by leveling up, upgrading their in-game characters, or competing against others in competitive play.

All crypto gaming and NFT transaction information is maintained on a public blockchain that tracks each player’s possessions. There are several advantages to using this technology in games. These include:

  • Players can readily demonstrate that they own in-game items and sell them for real money.
  • Gamers no longer have to worry about losing track of their resources, even if the gaming company experiences a technical failure; the blockchain does not have a failure point.
  • It is impossible to remove, counterfeit, or destroy items earned in a game.
  • Game-native cryptocurrencies can be received and transferred without an intermediary for clearing.

Integrating Blockchain Technology with Games

Blockchain development can quickly grow complex, but tools are available to streamline the process – such as APIs and SDKs.

APIs Could Be a Game Changer

An Application Programming Interface (API) is software that interacts with two or more data sources or programs.

Generally, an API provides an interface so you can carry out transactions or aggregate data from various external databases, blockchain networks, or cryptocurrency exchanges. It is basically the middle man between most programs.

Why Are Blockchain APIs Necessary?

A blockchain API can help facilitate obtaining updated cryptocurrency prices from multiple exchanges. In addition, a user can also connect to a blockchain network like Ethereum (ETH) or Bitcoin (BTC) to carry out transactions such as selling in-game items with real money.

Programmers usually use APIs as part of the software solutions they build. Rather than creating a new communication channel from scratch, developers will use prebuilt APIs to achieve their work. The benefit of using APIs is that they save significant development time on a blockchain project.

Some APIs are accessible by technically-savvy users who are not experienced in developing software solutions. These APIs usually have extensive documentation and are as user-friendly as possible.

As a general rule of thumb, the more feature-rich the API is, the harder it is for someone without a programming background to use. Therefore, if you plan on using a new API, be sure to read through the documentation thoroughly.

But What About SDKs?

A Software Development Kit (SDK) is a series of software development tools bundled into a single installable package. For example, this bundle might include a database development environment, a programming language compiler, and even an API in the same installer.

An SDK allows developers to create complete software solutions within an integrated environment. Think of it as the Swiss Army Knife for developers that gives them all the different tools needed to cut down on significant amounts of effort. All tools required are conveniently bundled into one installer. To top it off, SDKs often include one or more APIs.

How Blockchain SDKs Work

As the name suggests, blockchain SDKs contain software designed to develop blockchain platforms, like games with real cash economy or other advanced functionalities. Unfortunately, unlike certain APIs, SDKs are rarely suitable for non-developers to use as sufficient programming skills are needed to install and use them properly.

6 Steps to Creating & Transferring Custom Blockchain Tokens

The gaming industry currently runs on several systems that rely on central authorities. Blockchains can readily create decentralized applications, giving developers the power to take over this market entirely.

If games were developed outside of the traditional model (decentralizing value away from app stores and advertisements) and smart contracts were involved, then developers could ensure that they too will profit.

Here are 6 steps to taking advantage of such an opportunity:

1. Download Metamask to Create Wallets

To get started, install the Metamask Chrome browser extension to create a wallet. This wallet will deploy the token contract that creates your custom token. It will also initially hold all tokens the contract creates.

2. Create a Token Contract with Remix

Next, with Remix, you will make a simple contract template. This will be deployed on the Ethereum (ETH) blockchain to create a token contract. You’ll need to have ETH to cover the transaction fee, which means buying ETH from an exchange or using faucets.

3. Use Nethereum and Unity3D to Create Player Wallets

Players need their own wallets to receive your tokens; use Nethereum or Unity3D to do this. This is why games with real money economy should allow players to import their personal wallets from other software.

4. Transfer ETH to Player Wallet with Metamask

Return to Metamask. Use it to transfer ETH to the user wallet from Step 1 and to the first player wallet from Step 3. In Metamask, select the recipient’s address from the dropdown menu and select “Send.”

5. Set Up Transactions with Metamask Extension and wallet.ethereum.org

Navigate to wallet.ethereum.org to send your created tokens that represent custom gaming skins and other goods. Because you have the Metamask extension installed, the website will automatically display the details in the Accounts section. Click the Contracts tab followed by the Watch Token button. Input the recipient’s address and select “OK.”

6. Send Created Tokens with Nethereum and Unity3D

Finally, you can use Unity3D technology to perform peer-to-peer transactions. Everything is ready for completing this step because you’ve already established your token contracts and provided a source wallet. If you’re successful, you’ll see a “transfer tx submitted” message appear in the Log Window, and the browser will open an Etherscan tab.

Virtual Goods Don’t Stop Here

Industry pioneers need to take advantage of trends like GameFi (play-to-earn) in order to stay competitively ahead of the curve and remain profitable. As the fashion industry has begun to embrace NFTs, some gaming companies are starting to realize the potential blockchain has for creating real-money economies.

After a decade of gradually entering the limelight, cash economies in games have grown into their own as well as grown their own following. Finally recognized for its many applications, it also has developed a safe, reliable, and secure tracking of digital transactions to protect its users. Not to mention, it is BLMP Licensing Marketplace’s secret weapon.

Virtual goods have grown alongside gaming and social media trends, allowing for benefits such as omnichannel features, advertising, and seamless user transfer. There is plenty they have to offer each other.

Currently, gaming skin marketplaces that trade virtual goods gain little and are overall expensive and inefficient. But with Blockchain-based solutions, gamers and even developers can benefit from the virtual goods market. Buying pixels to appear in your game and, for instance, on your avatar is given real value using blockchain. It is the monumental difference between paying for something virtual (not real) and having actually invested in a virtual asset (owning it).

This has resulted in a real marketplace that is estimated to have an annual revenue (of virtual products) of more than $15 billion. These virtual goods have huge scope; they can be anything from digital stickers for messaging apps to gaming skins/outfits for your avatar or even your avatar’s pet.

There are multiple benefits to the creation of crypto gaming. The secured platforms allow gamers to trade for monetary value, making the purchase of virtual goods that much more appealing. For developers, there are exciting benefits in the chance of partnerships – which can be established to provide commission-based incentives in the form of smart contracts.

But this is only the beginning. Virtual goods are continuing to trend, and who knows just how far the potential of the gaming marketplace will go.

About the Author

William Dawsey

William Dawsey is Vice President of Sales for Finance and Payments Technologies at Chetu, a global provider of world-class custom software development solutions. William has nearly a decade of experience in the financial technology space and has helped numerous brands and institutions develop and integrate the latest in POS and FinTech solutions. William Dawsey facilitates programmers with expertise in utilizing cloud-based, web, and mobile solutions for financial service modules such as payment gateways and POS software, accounting & tax preparation software, plus banking and finance service modules.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.