I’ve talked about how Enjin works in one of my previous articles.

In this one, I’d like to explain incentives game developers have to use it, along with a few key blockchain game development concepts like true item ownership.

I’ve consolidated everything into 10 key points and put them together in a clean infographic.

Summed up, from the perspective of a game developer, Enjin offers a blockchain game development platform that solves hard problems for developers and opens up new game design possibilities—with the end result being increased revenue.

I’ll include a detailed elaboration on each point for game developers (as well as investors and gamers) that want to gain a better understanding of the Enjin Platform—and find out why it’s a win-win solution for both gamers and game developers.

Empowering Game Devs with Blockchain Tech

True Item Ownership

“True item ownership” is a concept that lies at the very core of Enjin.

The term is used to make a distinction between items that are hosted on game servers—and items that are “held” inside a gamer’s private Enjin Wallet.

True item ownership frees items from a single game or a single server—gamers are always able to pull value out of the game and use it elsewhere.

They can “melt” the ENJ-based items back into ENJ and receive a portion of its value in ENJ—and use it in other games, or sell it for other cryptocurrencies or fiat money.

Game developers can choose a “melting fee” which can’t be higher than 50%, meaning that they can get a portion back of their initial investment used to mint the item.

Enjin-powered monetization models are inherently ethical due to true item ownership—harshly contrasting the recent years marked by monetization controversies.

True item ownership is an extremely valuable proposition for gamers, meaning they will be more likely to purchase an in-game item. In turn, this would mark a “shift” of the bulk of revenue earned by game developers moving from a tiny percentage of high-paying players “whales” to a significant percentage of their entire user base.

This blockchain-powered concept will result in increased game developer revenue due to more players willing to spend—and due to increased user loyalty caused by ethical monetization practices.

Gray Markets & Trading Fees

Studios and publishers are losing virtual item sales to gray market trading.

Because gray market sellers often sell items for a fraction of the cost compared to the in-game store, some players will purchase from them regardless of the long-term cost to the game.

This loss may be as high as 40% of total revenue.

Game developers are able to regulate or eliminate third-party marketplaces, and implement trading fees by utilizing two features of the Enjin Platform: bound tokens and whitelists.

Witek Radomski, Pat LaBine, and Roger Walco discuss trading fees.

Bound items are non-tradable. They can be only melted back into ENJ. However, the game developer can whitelist specific wallets to transfer or receive bound items.

What this means is that game developers could regulate or eliminate third-party trading sites—and earn a trading fee for every transaction, thus increasing their revenue.

Intrinsic Value

It’s important to understand the difference between an item's intrinsic value and its ENJ-backed value.

"Backed value" refers to the ENJ imbued in an item.

A wizard’s staff might have only $5 worth of ENJ in it—but it could be sold for tens, hundreds, or even thousands of times more.

An item's intrinsic value can depend on its utility, rarity and/or other variables.

It could depend solely on its creator (e.g., a famous Twitch streamer that crafted an enchanted sword; a talented artist that created a skin for a rifle; or a real-life architect that built a magnificent castle).

It could also simply depend on its rarity—rare drops tend to be priced in thousands of USD.

This means that game developers could actually use a very small amount of ENJ to “mint” blockchain-based items—and increase their revenue by implementing trading fees, or even use trading fees as their sole monetization model.

Now that I’ve explained the difference between ENJ-backed and intrinsic value, I’d like to point that the previously mentioned melting feature (where a gamer can melt an item back into ENJ) is the absolute worst-case scenario.

It means that the item’s intrinsic value is lower than its ENJ-backed one—which can happen if the game server goes bust, for example. In this case, ENJ acts as an insurance—gamers still have value in items they attained in games/servers that no longer exist.

Compound Items

Efinity introduced the concept of token bundles.

Token bundles will allow for compound items—for example, crafting a sword from 10 pieces of steel that has 0.1 ENJ in backed value each, and ending up with a sword that has 1 ENJ in backed value; creating an in-game character and adding cosmetics, equipment and customization features or building a spaceship or a city out of ENJ-backed items.

Compound items are likely to have a high intrinsic value, and it will likely correlate with the number and type of possibilities players have when creating them. A combination of two items (for example a wooden staff and a magical orb), would be traded for less than the same enchanted staff that has an interesting back-story written by the items creator attached to it.

Here, we come to an extremely interesting feature of ENJ. It enables real-life value creation by players, in case the game design supports any type of player input in regards to compound items.

Artistically-inclined players could create custom skins for rifles, or compose music tracks to listen to during heists. Lore-masters could write highly-valued books, or combine their skills with players that invested their time, energy and experience points into mastering their crafting and enchanting skills to create history-rich, powerful, unique items.

These types of compound items, combined with trading fees, could result in self-sufficient, profitable game economies.

Blockchain-Powered Gaming Multiverses

Enjin makes it possible for gamers to use their characters and items in multiple games with interlinked environments.

A Gamer’s Journey Through the Enjin Multiverse
A thought experiment about a blockchain-powered gaming multiverse written from the viewpoint of an in-game character.

The implications could be profound; consider, for example, the potential for ongoing character development through multiple games. A gamer could play a sci-fi MMORPG today, a multiplayer RTS tomorrow, a FPS the day after, a single-player RPG the day after that—leveling up a single character, and even his items all the while.

Game development studios could even work hand in hand to create parallel gaming universes—a tactic that could result in increased loyalty across all inter-linked titles, and a pre-existing, established audience for every new game that gets added to the mix.

Creation of gaming multiverses would enable game developers to explore new, multi-linear ways of video game storytelling—and likely spawn new genres of games in the process.

Combination of gaming multiverses with the compound items mechanics could lead to quests spawning multiple gaming worlds—collecting items across several games that can be forged into a powerful and rare gaming item, for example.

Monetization Models

There are a number of monetization models that can be used in games powered by ENJ— depending on the game design, game developers could implement only one or all of them.

  • Trading fees, where game developers would set a percentage for in-game or web-based, regulated marketplace trading.
  • Subscriptions, which are based and charged based on elapsed time, and which enable game developers to provide time-based services like power-ups, ranks, or unlock website content for subscribed users.
  • Microtransactions, which can be used to monetize games by selling cosmetics, in-game items and other types of virtual goods.
  • Game-as-a-token, where game developers could tokenize game accounts and sell them for a fixed price.

It’s important to emphasize that all of these monetization options will inevitably result in increased player loyalty, due to items being hosted on the blockchain, meltable, easily tradable, and safe from theft.

Transaction Fees & Speed

Game developers rely on third-party payment providers in order to sell virtual goods. For example, PayPal charges 2.9% plus $0.30 per sale (in the US) and Visa charges anywhere between 1.43% and 2.4%.

Both gamers and publishers/communities are impacted by this, as virtual goods need to be priced higher to cover these fees.

Additionally, this process is usually slow, where virtual goods take a few minutes to appear on the “game account”.

Efinity, our upcoming game-channel framework, will allow nearly infinite volumes of transactions between millions of players and the game server—at high speeds and nearly no costs.

Malicious Players

Harmful activity in video games comes in many forms, including account hacking, cheating, botting, and credit card fraud.

All of these activities negatively impact games, their players, and ultimately, their revenue. Player churn directly and indirectly impacts top line revenue, but bad activity has other financial consequences for games as well.

When an account is hacked or a virtual world is filled with cheats and bots, players will leave a game and take their money elsewhere.

Games built with Enjin will be able to eliminate these issues in numerous ways. For example, by ensuring that valuable in-game items on the blockchain would have their value based on player creativity and/or intellectual abilities—not on grinding which can be easily automated.

Existing and upcoming games could utilize a combination of whitelists and bound items to eliminate gray markets, thus removing incentive for malicious players.

Depending on the game, developers could utilize the ENJ voting feature to galvanize and reward their user base for identifying and reporting botters—players who use programs to gain an advantage in-game or acquire in-game items they can later sell via gray markets.

Item trading-related scams would be completely eliminated with the Enjin Coin’s escrow feature. Incentivizing and including the user base in the fight against botters, scammers and cheaters would significantly reduce security team-related overhead costs.

Eliminating the effects of malicious players would also result in less users leaving the game, which would in turn mean increased revenue.

Meanwhile, unauthorized credit card transactions, which also supply the gray market trading, are expensive. According to Merchant Risk Council, they cost a merchant on average, an additional $2.40 for every $1 of losses.

It is estimated that for every legitimate virtual purchase made, there are 7.5 virtual items lost to fraud. Assets stored and managed online can be open to manipulation or chargebacks. Merchants have to deal with extra burdens, and scammers damage the game’s reputation.

Gamers will use the Enjin Wallet to store their ENJ and blockchain assets—and to trade and purchase in-game goods.

The Enjin Wallet foundation rests on top-of-the-line security architecture, making it the most secure mobile cryptocurrency wallet in the world, which means it’s practically impossible for hackers to gain access to gamers accounts and perform fraud.

Regulating In-Game Economies

The most important variable (in-game economy design vise) when minting a large volume of in-game items (currencies, or mineable resources, for example) is the supply model.

Enjin smart contracts will support six different token supply models, enabling game developers to solve a complex issue: regulation of in-game economies.

Token supply models allow for a wide variety of solutions to inflation and deflation, making it possible for development studios to balance in-game economies.

Efinity allows for 6 different models of token supply:

  • Fixed maximum supply
  • Annual supply % increase
  • Annual supply % decrease
  • Periodic increment/decrement by fixed amount
  • Settable by token minter
  • Smart contract or Oracle

Token supply model could indirectly influence game developer’s revenue. For example, an annual supply % decrease implemented in an MMO game for an in-game currency or a resource would increase its intrinsic value over time (due to it becoming rarer), and combined with a trading fee monetization model, would result in increased profit.

User Base Growth & Engagement

Game developers could incentivize players to spread the word about their game by rewarding them with real-life value digital items for every new, referred user.

Think in terms of “Get 10 in-game coins for every referred user” or “Claim your spaceship after recruiting your crew”.

In multiplayer games, “players=content,” so the number of users would have an indirect impact on revenue.

Previously mentioned features and possibilities could be relevant to user base engagement—compound items, voting mechanics and trade could be used in tandem to design bloody brilliant, captivating virtual worlds—and I’m not even going to throw gaming multiverses into this mix.

Disrupting the Gaming Industry

Let me hit you with a scary beautiful thought.

Imagine a world where gamers and game developers collaborate to create real-life value. Where microtransactions are ethical. Where malicious players are a distant, unpleasant memory.

Where the Enjin-powered gaming meta-economy is…

Well, bloody. freaking. epic.

A single, semi-decent blockchain-powered game can have a market cap of tens of millions.

What about ten? A hundred? What about thousands?

Imagine the pure, unrelenting power such a decentralized ecosystem would have over the gaming industry as a whole.

How beautifully complicated and brilliantly elegant that meta-economy would be. Millions of items being created and traded every day, games interlinking, gamers connecting, game developers innovating, collaborating and creating—all powered by a simple, cyan-purplish coin.

Ponder the technological tsunami that would bring fairness and purpose to gaming.

Imagine a world where creative freedom of game developers is not limited by fiat-powered monetization models.

It could change gaming—forever.

Just a Platform

In the end, ENJ is just a platform.

All we’re doing is providing a suite of open-source tools to build blockchain-powered worlds.

A magical pen that can be used to write beautiful digital stories—and it’s up to the binary-code-powered writers to fill the blank pages.

To explore, experiment and discover.

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