Understanding the impact of blockchain technology on sports gaming

Sports gaming is a growing industry, with new technologies further fueling interest. This year, the total revenue of the sports gaming industry is estimated at $10.24 billionand is expected to reach $13.80 billion by 2027. In-game advertising is expected to make up the majority of this figure, followed closely by in-app purchases.

There are challenges facing the industry and there are use cases of new technologies like blockchain that aim to fill these gaps. For example, the decentralized and transparent nature of blockchain transactions can solve long-standing problems in traditional sports games, particularly in areas such as asset ownership and prize distribution. This can prevent the sector from reaching its full potential.

Challenges in the traditional sports gaming industry

There is a lack of transparency in the transactions and ownership of traditional sports games, especially since these are mostly under the control of gaming operators. Without the ability to freely trade or transfer their game content, players have no true ownership of these items. Reward systems can also be unclear, resulting in low community trust. Players are unsure whether they are receiving fair compensation for their efforts and achievements in the gaming ecosystem.

There is also a security issue, as traditional sports gaming platforms have centralized storage of player data. This can potentially expose your game information and assets to cyber attacks or breaches. This may include given by both players and developers such as the DDoS (Distributed Denial of Service) attack on Blizzard Entertainment games. Hackers also have a variety of them reasons to attack gaming platforms or even individual player accounts, from the theft of hard-earned game resources to revenge on opponents or even the collapse of the entire game itself.

The bottom line is that players have limited control over their gameplay, which results in a lack of trust in the community and ecosystem.

How blockchain improves asset ownership and community involvement

The main advantages of Blockchain technology lie in its decentralized and transparent nature and the immutability of transactions. This means that once transactions are confirmed by the consensus mechanism, ownership of assets across the entire network is also established.

THE creation of non-fungible tokens or NFTs has become a game changer in how these non-physical objects represent both digital and real-world assets, including player cards, virtual merchandise, or exclusive prizes. NFTs are becoming so popular as an asset that global revenue is expected to reach $2.378 billion in 2024with a CAGR of 9.10% to a forecast of $3.369 billion by 2028.

NFTs provide verifiable ownership and control over such assets, which can be traded not only within the gaming ecosystem itself but also on other markets. This means that NFTs can be used in different games and can also be used as investments, offering new economic opportunities inside and outside the gaming ecosystem.

“NFTs are unique because they meet all the requirements for digital property rights, facilitating the efficient management of markets. They also perform an important social function, that of promoting self-expression, creativity and ownership.” says Flora Li, director of the Huobi Research Institutereferring to that of the Institute Overview and trends of the global cryptocurrency industry relationship.

Blockchain use cases in improving gaming ecosystems

Several sports gaming platforms have successfully used blockchain technology to bring about significant improvements in asset ownership and player engagement.

Start of game is pioneering the use of NFTs as representations of player avatars in fantasy sports. Users actually own these avatars, which allows them to participate in games. This is not limited to a particular league, but can happen across different platforms. Avatars can also be traded on NFT marketplaces, which increases the value of engagement. Players have a tangible stake in their virtual assets. To enhance the seamless integration of Web3 and blockchain technologies, GameOn announced a strategic partnership with Arbitrum, a Layer 2 blockchain network with $3.13 billion in total value locked (TVL). As part of this collaboration, GameOn also has obtained funding from Arbitrum.

Expanding its approach, GameOn uses blockchain technology to offer flexible rewards with these NFTs. For example, if a user’s LALIGA players are in the off-season and not earning rewards, they can spend a small amount to temporarily convert the players into participants of another league or even as UFC fighters who earn rewards.

ZED RUN is a digital horse racing platform that uses NFTs to breed, race and trade horses. Each horse has its own unique traits and attributes and these influence performance on the virtual track. Owners can earn rewards based on their horses’ racing results, which creates a dynamic competitive environment.

F1 Delta Time, meanwhile, was a platform owned by Animoca Brands focused on Formula 1. It allowed players to collect and trade unique cars, drivers and car parts as NFTs, with the added bonus of being officially licensed by the FIA. Over time, assets can be used in virtual races, and performance has also been influenced by the rarity and characteristics of the NFT. The games also featured a staking mechanism, where users can earn rewards by staking their tokens into the system. F1 Delta Time had the highest value NFT sale of its time, despite the system had to close after the official FIA license expires.

Finding a balance between technological progress and user benefits

The transformative impact of Blockchain technology is on the distribution of rewards. First, such rewards can be defined via smart contracts or self-executing agreements with predefined conditions that automate reward payments for maximum transparency. This eliminates the possibility of human error or manipulation, increasing confidence among players that they will receive rewards fairly.

According to Matt Bailey, CEO of GameOn, it is important that NFT-based sports gaming platforms offer advantages while ensuring technical advancements in the background. “It is extremely important that blockchain remains technically in the background, with only the benefits marketed on the front end.”

He emphasizes that for consumers to better realize the benefits, they should not think of it as an NFT platform but rather focused on sports and gaming. “We are a fantasy sports and gaming company, made better by Web3. Fans don’t care about three-letter acronyms and tech jargon. They just want the benefits.”

GameOn offers this approach to sports gaming, providing tokens to players through gameplay, participation in challenges, or simply by holding certain NFTs. These can be used for in-game purchases, wagering for prizes, or redeemed for real-world goods and services.

Thanks to partnerships with major sports leagues such as LALIGA and the Professional Fighters League (PFL), the platform focuses on match-based games and live game action to provide an enjoyable and rewarding experience for users.

The Future of Blockchain in Sports Gaming

As blockchain technology matures and becomes easier to use, we can expect its adoption in sports gaming to accelerate. More and more platforms and industries will adopt the use of NFTs, smart contracts and decentralized systems to improve user experiences and create new revenue models.

The integration of blockchain technology into the gaming and sports industries will play an important role in defining how users benefit from participating in gaming ecosystems.

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