GUEST: They line the rails along the exits at sporting events – eager fans and autograph collectors, straining to nab that sweaty wristband or scrawled signature from their favorite athletes. For some, it’s pure fan worship. For others, it’s part of a worldwide sports collectible market that totaled more than $370 billion in 2016. Now, there’s […]
GUEST:
They line the rails along the exits at sporting events – eager fans and autograph collectors, straining to nab that sweaty wristband or scrawled signature from their favorite athletes. For some, it’s pure fan worship. For others, it’s part of a worldwide sports collectible market that totaled more than $370 billion in 2016.
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Now, there’s a whole new type of sports memorabilia about to become available – in-game assets won by elite esports athletes. One company is paving the way for what could be an incredibly lucrative in-game esports memorabilia marketplace – and it has investors both inside and outside the gaming industry paying close attention.
The system will utilize smart contracts and blockchain technology to provide a unique signature and history of any virtual item in-game item earned. For example, when elite esports athlete Michael “Flamesword” Chavez earns a flaming sword of mega-death in his latest league battle, that item will have the ability to become a valuable – and easily tradable – asset. In other words, you could be using the unique item your favorite player had equipped in their biggest matches.
Memorabilia is big money
The sports collectible marketing is big, big business, especially for in-game assets, as Darren Heitner writes in Forbes. “Only a few years ago, the shoes that Michael wore for his infamous ‘Flu Game’ with the Chicago Bulls during the 1997 NBA Finals sold for over $100,000 at auction,” Heitner writes. “The seller once turned down $11,000 for the shoes.”
The goods are traded and sold at swap meets, industry events and online auctions; in fact, most sports memorabilia is now being sold online, Heitner continues, in an industry that shows no signs of letting up.
Enter the esport athletes, set amidst a burgeoning esports industry and a growing cult of celebrity surrounding its key players. According to NewZoo’s 2017 Global Esports Market Report, esports revenues are on track to hit an incredible $1.5 billion by 2020.
As the business grows, we’re witnessing a rise in the branding and culture around this industry, with the growing popularity of specific teams like Evil Geniuses and organizations like Na’Vi and SK Gaming, for example. As both money and attention flow their way, it’s only natural that esports collectibles and tournament memorabilia will become more and more popular.
Many of these items will look like typical sports collectibles: event posters, team jerseys, individual player gear are all hot properties on eBay and other auction sites. But thanks to blockchain technology, the market for in-game asset trading is about to blow open.
The potential of blockchain
According to DMarket, there are 2.3 billion gamers worldwide. No existing technology yet connects them all in a way that would make it possible to trade, buy and sell in-game items across the gaming environment. That’s why DMarket is out to build the platform to make it happen.
If the idea sounds familiar, it’s because in-game technology does offer this ability, but in a much more limited way. As Panchenko explains, the Steam platform allows in-game trading, but the proceeds remain trapped inside the platform, and it represented only a few games. Still, the massive popularity of the idea – Steam posted $3.5 billion in revenue in 2016 – proves there is a tremendous market for this kind of trading.
In August, DMarket announced that they had raised more than $1.5 million in support of their new blockchain-based game marketplace. It’s quickly gaining popularity, with a total of just under $11 million raised in the last two months. The marketplace will allow gamers to freely trade, buy and sell in-game assets and turn those assets into real spendable currency. The DMarket API will eliminate the need for developers to create their in-game marketplaces on their own, and incentivize them to build rare, collectible items. These key features play right into this idea of esports memorabilia.
“What we’re doing is, in effect, synchronizing hundreds of thousands of gaming databases with each other,” Panchenko notes. “Think of it this way. Steam, SkinsCash and Opskins allow trading within a limited number of games. So about six percent of gamers can now do this kind of cross-game trading. Even with that limited number, they’ve generated $4 billion in revenue.
In effect, DMarket’s API solution opens up the in-game market to virtually any developer – and their players – giving the other 94 percent a real opening into this marketplace.
“We’ve talked to a lot of the big game developers already, and we will cover the most popular engines like Unreal, Cry Engine and Unity 3D,” he continues. They’ll cover pay-to-play, free-to-play and pay-to-win business models on any platform including mobile, what he calls a “win-win solution for every gaming market.”
The outlook for esports memorabilia
With esports memorabilia, players will be able to collect items from all the championship finals, or even collect the armor worn by their favorite stars. And all of that history is secured on blockchain technology so that fraud will be virtually non-existent.
Not only does this open up a huge potential market for in-game esports memorabilia, but it also eliminates the vexing problem of fraud that is so rampant in the physical sports collectibles industry. Because the marketplace is built on blockchain technology, each item has a unique and unbreakable digital signature. This means that in-game item cannot be “faked” in the same way that a signature on a baseball might be, adding to the value for serious collectors.
It’s looking like the extension of the market into the rapidly growing world of esports is close to becoming a reality, turning those digital assets into tangible collectibles with real-world value.
Aurangzeb A. Durrani is a former professional gamer and an esports analyst. His interests include esports, online gaming, tech businesses, and blockchain.
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