Blockchain Gaming: An Opportunity for Luxury Brands
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Blockchain Gaming: An Opportunity for Luxury Brands
The world of gaming is constantly evolving. Massive advancements in graphics and processing power have resulted in a level of realism that seemed unfathomable ten years ago. With gamers devoting more time and effort than ever before to honing their skills, esports has seen a rapid ascension to the cultural forefront, particularly amongst Gen Z. Aside from this, we’ve witnessed the rise and rise of mobile gaming- a division whose global revenues are on track to surpass $100bn in 2023.
These developments have not only changed the way people play games, but also how they are designed, marketed, and perceived by the wider public.
Now there is major hype building around a new phenomenon; the latest gaming development that some are calling the biggest tech trend of the century. We’re referring, of course, to the integration of blockchain technology in gaming. Web 3 gaming, as it is known, promises a new level of player engagement and community building: as well as significant and varied opportunities for monetisation.
One lesser talked about element of this is around the unique opportunity it presents luxury brands to reach a new and growing market of gamers and tech enthusiasts. As you’ll see, some forward-thinking and opportunist brands have acted already. For others, 2023 could be a defining and critical year.
Fear not if, like most people, the world of blockchain gaming is a new concept to you. This blog post details everything you need to know.
Let’s talk about Web3
So, let’s start with why Web3 gaming exists. The Web 2 gaming model has several undeniable shortfalls. The most often cited are a lack of secure and robust systems for transactions, limited opportunities for player customisation, and the players’ inability to ‘own’ in-game assets that render them valueless in the event that a game’s company shuts down or goes out of business. Further to this, there is a growing sentiment amongst gamers that they are on the wrong side of a longstanding imbalance in favour of game producers and developers. Amateur gamers feel they are not appropriately rewarded, in real world terms, for the time and effort they devote to playing.
Cue Web3 gaming; a new model that addresses these imbalances and offers players a fairer and more equitable gaming experience. In this new model, players are rewarded for their in-game success. This creates a new level of player engagement and further incentivises players to invest time and effort into the game, with a view to extracting value. Hence the emergence of the term ‘play-to-earn’.
So, how does it work exactly?
Web 3 gaming uses blockchain tech to create decentralised and player-owned virtual worlds. Assets owned in-game exist on a decentralised and open internet, meaning that they can be better controlled by the players who own them. This is to say that they can easily be bought, sold, or traded which marks a great step towards player empowerment, enabling amateur gamers to reap financial reward for their achievements.
What’s more, Web 3 games have introduced earning mechanics whereby players are issued cryptocurrency as reward for the completion of in-game missions. Take The Spaceminers Club for example. Set to launch later this year, this title will see players extract gold from asteroids in their open world, which can then be traded in for real gold of the same value stored in secure Swiss vaults.
Despite the potential benefits of Web 3 gaming, there are still some doubters who question its viability. Some argue that the complexity of blockchain technology makes it difficult for players to fully engage with the games. Others worry that the play-to-earn model will lead to players becoming less invested in the actual gameplay and more focused on earning rewards. This concern became a reality for many, as the market became flooded last year with games that placed so much emphasis on the earn element that they lost sight of the play.
Despite this, there are examples of play-to-earn games that have seen great success. One of the most notable is Axie Infinity, a blockchain-based game where players can earn rewards by breeding and battling creatures known as Axies. The game took the Philippines market by storm, reaching over 250,000 monthly active users at its peak, and enabling many to quit their day jobs in an effort to make a living from the game.
As the popularity of blockchain-based virtual world games continues to grow, this year is poised to see the release of more sophisticated and feature-rich Metaverse games. Two of the most highly anticipated games, expected to make a splash, are Star Atlas and Wilder World. Star Atlas, a space-themed virtual world, promises to offer players a vast and immersive universe to explore, complete with its own economy and player-driven stories. Meanwhile, Wilder World aims to offer a eco-friendlier and more sustainable virtual world, known as Wiami, in which players reside, work and compete for a diverse range of tradeable in-game assets.
So where do luxury brands fit into all of this?
The most obvious way in which luxury brands can benefit from all of this is in partnering with game developers to offer in-game items and experiences that can only be obtained through the use of their products. This, of course, stimulates brand engagement and loyalty, as a new subculture are incentivised to use and invest in these brands. This was wonderfully demonstrated by Louis Vuitton, who partnered with the blockchain-based game, The Sandbox.
The collaboration involved Louis Vuitton creating a virtual version of its iconic LV trunk and a limited-edition set of virtual clothing items for players to purchase in Sandbox’s metaverse. The virtual products were sold using the platform’s native currency, SAND, and were highly sought after by collectors and fashion enthusiasts. The partnership was widely seen as a significant moment for the intersection of luxury fashion and blockchain technology and demonstrated how established brands could engage with the growing virtual world space.
A second, apt example of this is Prada, who partnered with the blockchain-based game F1 Delta Time. Again, this collab involved Prada creating virtual versions of its iconic bags and shoes, for players to purchase in the game’s virtual world. These virtual products could be used to equip and customise the game’s racing cars, which offered players a unique and high-end way to personalise their gaming experience.
Other luxury brands that have partnered with blockchain games include Gucci and CryptoKitties, Burberry and Arianee, and Dior and Sorare.
These are just a few examples, and it remains to be seen how other brands will make their mark in the space. As metaverse games continue to evolve and attract more players, the opportunity grows larger and larger. There is a digitally-savvy, captive audience awaiting luxury brands who dare to try something different in the space.
If you’d like to discuss Web 3 and how VERB Brands can support your digital marketing requirements, please get in touch. We look forward to working with you.