The digitization of both the economy and the entertainment industries over the past 10 years has presented opportunities for tech entrepreneurs to address customer needs that didn't exist until recently - and the potential rewards are vast.
On the one hand, the online entertainment sector has been driven by a revolution in gaming that has seen the popularity of the pursuit skyrocket as of late. Over two thirds of US households have a next-gen gaming console and around half of Americans play regularly, according to the Entertainment Software Association.
Add to this the amount of revenue and transactions that flow through this sector, and you can start to see what a large market it is. Sophisticated buying and selling markets for online goods surround almost every game, with some items being sold for hundreds of thousands of dollars. Online assets are a big business in the gaming world.
Couple this with the recent cryptocurrency revolution enabling new forms of payment, and the situation is ripe for innovation. In many ways, Blockchain technology is ideally placed to disrupt the gaming industry: leveraging a digitally-native financial system like cryptos (along with their built-in features of security and immutability) is a no-brainer.
The global gaming industry is worth over $100 billion, and it is clear that it will see widespread crypto adoption in the near future. There are some unique challenges present however. One Blockchain project, WAX (short for Worldwide Asset eXchange) is hoping it can address these problems and become the standard platform for trading online assets.
Problems in the gaming asset ecosystem
Despite the fact that it is technology-based, the worldwide marketplace for gaming items is more of a segmented landscape than a seamless market.
This landscape is unexpectedly even further behind other channels like online shopping; different games have different currencies and the markets for these games are often region-specific, making a proliferation of platforms when in reality only one system is needed.
First of all, this creates obvious problems of convenience. Customers’ choices are severely limited or hindered when transacting with users in other regions. Payments and price comparisons are difficult and at times require several middlemen. This should be surprising to most, considering the amount of digitization obviously involved.
On top of this, the real issue of transparency and security plagues these markets. Users often experience fraud through receiving incomplete goods or total failure to deliver on the part of the seller.
These security concerns are part of the reason why so many intermediaries exist. But in a world of such significant fractionation, issues like currency rates can make some transactions prohibitively difficult. In turn, this drives users away from the platforms and exacerbates supply and demand mismatches.
To those involved in the video game industry, this should be all the more frustrating in light of both the usability and the added features of crypto. Crypto users can avail of smart contracts, they can transact worldwide easily and they can control their funds securely. So why can’t gamers do the same?
Creating the market for gamers
With these difficulties in mind, consider how much value the WAX solution can provide. For example, instead of needing to go to a separate trading platform after viewing an interesting in-game item used by an eSports player they are following, a person can quickly and easily purchase the aforementioned item in real-time without needing to stop viewing the event.
This is a big improvement on what is currently available, and is made possible by the WAX Token and supporting technology. This technology allows sellers to easily add a simple “sell” widget to their stream or site and sell directly for WAX Tokens.
This is also better on the user’s end, because of the ease of currency exchange and the decentralized nature of cryptocurrencies. Instead of needing to jump through hoops with multiple intermediaries and the resulting wait times, a user can simply top up their WAX wallet on an exchange with fiat or other cryptocurrencies and then spend money immediately the next time they are viewing their favorite player on Twitch or during one of their own gaming sessions.
Applying experience to the next challenge
The team behind WAX sees this as the next step in their already successful journey of making the gaming industry easier to work with for professionals and gamers.
They had a lot of success with their OPSkins platform, which helped to resolve some of the inefficiencies mentioned earlier in the fragmented gaming market worldwide.
The team has considerable experience in all aspects of tech entrepreneurship, having previously raised large amounts of capital. It seems that if any team is able to solve the challenges in the space then the OPSkins experience will go a long way. Supporting their pre-sale efforts are some heavy-hitters in the venture capital industry including Pantera Capital and Hyperchain Capital.
The WAX token pre-sale starts on Wednesday, October 18th, ahead of a wider sale on November 1st.
- Eoghan Gannon, Guest Author
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