The global gaming industry is growing at lightning speed.
Just three years ago, the games market earned $93 billion in revenue, and in another three years, those earnings are projected to reach $180 billion.
Statistics show that a large percentage of this increase can be attributed to mobile gaming and virtual item sales within freemium monetization models.
Despite the influx of revenue for gaming as a whole, independent developers are struggling now more than ever.
Average indie game sales on Steam reached a low of 2,800 median average sales per game in 2016.
This decrease in average users is caused primarily by an increase in competition among game developers, but paired with a lack of monetization options, these struggles are quickly compounding and drastically affecting the lives of millions of game creators.
The gaming market is one of the biggest entertainment markets in the world, but while 2.2 billion people actively play games, the average annual spend per customer is estimated to be just 20% of the books market and 10% of the gambling market.
All of this leads to the conclusion that game developers are in need of better ways to generate revenue without raising their overheads.
At Enjin, our solutions are specifically designed to help developers increase profits by utilizing unique gameplay mechanics that give gamers new and exciting experiences.
Blockchain: The Solution
Our suite of tools is used to create virtual items that are authorized, validated, and certified by the blockchain. This means the items are stored on a decentralized network, rather than within centralized game servers.
Because the blockchain acts as an incorruptible certificate of ownership and authenticity for all of the items it protects, it enables players to truly own their items.
Benefits for Game Developers
We believe our powerful suite of tools will revolutionize gaming as we know it by revamping the psychological value of virtual items and redefining them as valuable assets.
Digital assets can include items such as characters, currency, weapons, items, power-ups, skins, employees, real estate, pets, universes, and even games—anything a developer can imagine.
As property of the player, you as a developer can enable such digital assets to be used, traded, bought, sold, loaned, leased, upgraded, lost, augmented, or cashed-in for cryptocurrency.
This evolution from virtual item to digital asset introduces some exciting new possibilities for fundraising, promotion, monetization, revenue protection, and retention.
- Raising the Intrinsic Value of Digital Assets: Considering that less than 3% of players currently purchase virtual items, raising the intrinsic value of items through true ownership will increase a player’s value perception of each purchase, leading to increased sales and a more positive player experience.
- Taxing Secondary Markets: The Enjin Platform will enable you to set up secondary marketplaces both within and outside of your games, where you can earn a percentage of all player-to-player sales. This can also have a viral marketing effect for your game because you are giving players a powerful financial motivator to promote and advertise the game’s digital assets.
- Selling Collectibles: Crypto Kitties have used this tactic perfectly by enabling the trade of rare collectibles, some of which have sold for over a hundred thousand dollars. Over $25 million in transactions have occurred within the Crypto Kitties marketplace. The very nature of the blockchain ensures that everything is open for audit, including the type and volume of digital items created. Scarce items on the blockchain are transparent and trackable, their scarcity is verifiable, and their relative value is assured. Their history is also public, so if the items were involved in an event of historical significance, the proof remains on the blockchain.
- Regulating Third-Party Markets: The Enjin Platform enables you to regulate grey markets by selecting specific locations in which items can be bought and sold. By enabling specific third-party websites to promote and sell your items, you will be able to earn a commission from their sales and gain extra exposure for your game.
- Creating Taxable Rental Markets: By enabling players to rent out their items, you can earn a percentage of the rental fees. This feature will be added in future updates of our platform.
- Cashing in for Crypto: You will be able to set an exchange rate for players to cash in their items for cryptocurrency and, in turn, receive a portion of that cryptocurrency back into your own wallet.
- Enabling Time-Based Subscriptions: Our platform will eventually be upgraded to provide facilities for time-based subscriptions. This can be useful for enabling access to games, levels, power-ups, rentals, and more. Time-based subscriptions can be minute-to-minute or even second-to-second, enabling customers to get exactly what they pay for.
- Ending Chargebacks and Fraud: It is estimated that for every successful sale of a digital item, seven more are lost to fraud. This wreaks havoc on in-game economies and costs the gaming market tens of billions of dollars annually. Items created using our platform are protected by the blockchain and actioned through smart contracts, making this kind of fraud impossible.
- Restricting Third-Party Markets: As previously mentioned, the Blockchain platform enables you to regulate and restrict third-party markets by selecting specific locations for items to be bought and sold. This makes it impossible for unauthorized third-parties to sell your items without permission.
- Item Pre-sales: Crowdfunding is a popular way to raise money for game development. With our development platform, you can create digital assets before you have even built your game, enabling you to reward supporters instantly by delivering rare, valuable, or discounted in-game assets. Players can hold these assets securely in their Enjin Smart Wallet for later use when the game is released.
- Crowd Marketing: You can use Enjin’s solutions to mobilize your community and provide incentive to promote your game. By providing influencers and publications with digital assets to use, customize, give away, and sell, you will create a powerful motivator to push your products, helping solidify your gamer base before your game is even launched. Every player that receives a pre-release digital asset is likely to use it and try the game out, especially if they paid for it. You will be able to generate revenue by taxing a portion of every sale and receiving the profits automatically.
- Creating a Digital Metaverse: Using the Enjin Platform, you can choose to set digital assets, such as characters and their possessions, to be easily ported between games. This allows you to team up with other game developers to create a digital multiverse in which players can be transported through different universes while retaining their base attributes and possessions. This level of cross-promotion and collaboration enables a new form of game development partnership, allowing you to share user-bases and pool your marketing resources.
- Utilizing Digital Asset Gift Cards: The Enjin team will eventually develop the ability for you to create gift cards for digital assets. We envision a future where you can sell your digital assets in retail stores or allow players to purchase gift cards online to give to their loved ones. Importing these assets into your games will be a simple process handled by the Enjin Smart Wallet.
- Boosting Community Engagement: Economics is fundamental to community, and ownership is essential to economics. By utilizing our platform, you will give players more reason to interact, cooperate, collaborate, and increase their emotional connection to your games. Increasing a player’s emotional investment is a proven way to also increase their financial investment. But this is not just about creating more valuable products for you to sell — true ownership makes the virtual worlds you create more meaningful and gives players a greater sense of purpose.
- Enabling Continued Storylines: Enabling characters and their possessions to be ported between your own games gives you the unique ability to create continued storylines in which a player’s character and story continue to grow and evolve as they travel through new games.
- Creating Vertically Integrated Communities: The Enjin Platform also enables you to create digital assets that can be ported between limitless platforms and devices, meaning players could use their items on integrated websites, forums, apps, and even Wi-Fi-enabled devices like TVs and smart fridges. The potential of this innovative approach to digital asset management has yet to be thoroughly investigated.
How It Works
Virtual items stored on the blockchain are truly yours to own forever, if you wish. This is a stark contrast to the current reality in which players lose their items if they get booted, leave the game, or if the game shuts down.
True ownership over one’s digital belongings enables gamers to own their digital identities and makes virtual worlds much more meaningful.
Our one-of-a-kind suite of smart contracts, apps, and APIs is integrated into the Ethereum blockchain, and the full array of its tools and functions can be activated, customized, and developed using our development platform. The Enjin Platform allows gamers to:
- Truly own their virtual items and hold them securely in decentralized item management apps.
- Hold items that are valuable as in-game utilities and also have an attached cryptocurrency reserve, allowing users to melt their items and retrieve the cryptocurrency contained within.
- Manage virtual items on decentralized networks, enabling them to use, trade, buy, sell, lend, rent, lease, upgrade, lose, and augment these items securely.
It is important to note that these tools are modular, meaning you as a developer can pick and choose the specific tools that meet your needs. You can also use our platform to code your own smart contracts over and above those we provide.
Minting Virtual Items
Minting describes the process of creating a virtual item to be stored on the blockchain. When creating virtual items, a number of smart contracts representing specific item attributes can be activated based on your discretion:
- Tradable: Items that can be equipped and traded normally between players.
- Bound: Items that cannot be traded.
- Whitelisting: Restricting item transfers to only occur between whitelisted addresses, which can be used to define specific channels and locations where trade is allowed.
- Consumable: Items that can be used once and disappear after consumption.
- Compounding Items: Enabling token bundles which combine multiple tokens into one gives players the ability to fuse and augment items.
- Fixed Maximum Supply: Pre-setting the static supply of rare items.
- Annual Supply % Increase: Dynamic supply enabling item inflation over time.
- Annual Supply % Decrease: Dynamic supply enabling item deflation over time.
- Periodic Increment/Decrement by a Fixed Amount: Dynamic supply altered based on demand.
- Item Rental: Players can rent out their items to other players and receive payment in return. Rentals can be set for fixed amounts of time, and returns are automatic.
- In-game Item Loss: Select items can be lost in games based on circumstantial parameters.
- Commission on Sales/Rentals/Trades: The minter of an item can opt to earn a percentage of all sales, rentals, or trades of that item.
- Commission on Melting: The minter of an item can opt to earn a percentage of that item when it has been melted.
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