The potential of blockchain technology in the gaming industry has been a topic of discussion for quite some time. Many game studios have shown interest in leveraging public blockchains to enhance the gaming experience and create new opportunities for players. However, according to Colleen Sullivan, co-head of ventures at hedge fund Brevan Howard Asset Management’s crypto-focused division, public blockchains are currently inadequate for the demands of fully powering the biggest video games.
Sullivan points out that major public blockchains, such as Solana, can only handle around 2,000 user-generated transactions per second. While this may seem impressive, it falls far short of what is needed to support a popular mobile game or an AAA-rated title. These types of games typically require a significantly higher transaction throughput to ensure smooth gameplay and accommodate the large number of players.
One of the main challenges is scalability. Public blockchains operate on a decentralized network, where every node has to validate and record every transaction. This distributed nature of public blockchains limits their transaction processing capabilities. As more users join the network and initiate transactions, the network becomes congested, causing delays and high fees.
To achieve the necessary scalability for gaming, alternative solutions need to be explored. Layer 2 solutions, such as sidechains or state channels, can help alleviate the scalability issues by processing transactions off-chain and settling them on the main blockchain periodically. These solutions can significantly increase transaction throughput and reduce latency, making them more suitable for gaming.
Another approach is the use of private or permissioned blockchains. These blockchains operate in a more controlled environment, where only trusted entities participate as validators. This allows for faster transaction confirmation and higher throughput, making them more suitable for gaming applications that require real-time interactions.
However, the adoption of private blockchains raises concerns about decentralization, one of the core principles of blockchain technology. Some argue that private blockchains sacrifice decentralization for better performance, which goes against the ethos of blockchain.
Nonetheless, the gaming industry continues to explore the potential of blockchain technology. Several game studios have already integrated blockchain elements into their games, such as digital asset ownership and decentralized marketplaces. These implementations, while not fully utilizing public blockchains, provide players with new experiences and opportunities to monetize their in-game assets.
In conclusion, while game studios are enthusiastic about incorporating blockchain technology into their games, the current state of public blockchains poses significant limitations. The scalability and transaction throughput of public blockchains are not yet sufficient to fully power the biggest video games. As the industry evolves and explores alternative solutions, such as layer 2 solutions and private blockchains, we may see more substantial integration of blockchain technology in gaming.
