Esports & Blockchain: The Power Play for Fan Ownership and Revenue

The League of Legends World Championship, one of the world's largest esports competitions, brings together over 20 global esports teams to compete. The tournament attracts a global community united by their love for League of Legends, with fans cheering on their teams and regions in stadiums or from home. In 2022, online viewership reached 5.1 million concurrent viewers, with the event being streamed in real-time across platforms like Twitch, YouTube, and Riot Games' LoL Esports website. The event is a norm in the esports industry, with large, global audiences and fierce competition.  This blog explores the integration of blockchain technology and esports monetization strategies.

 

How To Monetize a Blockchain Game

Game monetization refers to the different methods in which a game developer or company generates cash from their game. For example, Blizzard monetizes the MMORPG World of Warcraft by collecting a monthly membership fee, selling in-game assets such as mounts, and providing paid in-game services such as swapping races, changing usernames, and so on. Riot Games, on the other hand, makes the majority of its money from League of Legends by selling players in-game cosmetics.

 

In terms of design, most modern blockchain games are pretty similar to traditional ones. For example, Gods Unchained (one of the first Web3 games) and Hearthstone are both trading card games (TCGs) with comparable gameplay from the player's perspective. The upcoming Web3 extraction shooter Deadrop is largely influenced by Escape from Tarkov, with similar gameplay throughout.

 

In idea, blockchain games and traditional games with identical gameplay aspects should have similar revenue mechanisms, which is true across many game genres. For example, time-tested approaches for mobile game monetization, such as threat creation, are likely to be applicable to mobile blockchain games. Given enough demand, subscription models for blockchain-enabled MMORPGs are likely to be viable.

 

However, there are several circumstances when NFT technology conflicts with standard monetization strategies and methods: Specifically, microtransaction-based models like loot boxes and cosmetics.

 

Understanding Blockchain Games

At its foundation, blockchain games provide game producers with a new form of technological infrastructure based on blockchain technology. While this technology has enormous potential to transform the gaming industry, Web3 gaming is still in its infancy, with early adopters experimenting with which game design and revenue strategies will succeed and which will not.

 

However, the primary advantages of this technique are clear:

• Player empowerment is achieved by on-chain governance.
• Increased involvement through digital asset ownership.
• Universal blockchain wallet logins help to establish digital reputation.
• Value preservation is achieved by linking to bigger digital economies.

 

Benefits of Blockchain Technology for Esports

Esports organizations can utilize blockchain technology to expand and monetize their core communities, while also enhancing their fan relationships.

 

Community Identity Through NFTs

Fan loyalty is often difficult to display outside specific platforms, such as League of Legends subreddit, where users can post "flairs" for specific teams. However, NFTs offer a solution to this issue, providing persistent, user-oriented digital ownership. By purchasing and owning an esports team NFT, players can show their loyalty to the team, which is natively digital and can be followed across platforms, creating a sense of persistent digital identity within the community.

 

NFT Loyalty Programs

Esports NFTs can serve as a gamified experience to deepen loyalty and inspire engagement within communities. These loyalty programs can be implemented in various ways, with the design space for NFT-esport synergies open for innovation. Early fans can be rewarded with dynamic NFTs that change as engagement deepens, based on positive actions like contributing to forum discussions, attending tournaments, purchasing sponsored products, or team merchandise. Esports teams can also reward players by offering special perks to NFT owners, as demonstrated by Fnatic, which offers exclusive opportunities for fans to receive merchandise and meet professional players. This approach can leverage community identity initiatives and enhance the overall experience for fans in esports.

 

Team-Branded NFT Composability

As NFT games gain popularity, many members of the present gaming community are likely to start playing these cutting-edge games. Because of NFT compatibility, this gives a unique possibility for esports teams to generate income streams based on in-game assets.

 

There are two reasons why this is more likely with Web3 games:

NFTs are interoperable—they are not stored on a central server, but rather on a decentralized ledger known as blockchain. This permits interchange between various applications and NFTs. For example, an esports team's NFTs may be integrated into an NFT-based game, giving NFT holders special benefits, character designs, and more.

 

The Web3 gaming scene is still in its early stages, with gaming companies seeking for new ways to recruit gamers and esports teams offering access to a vast gaming audience. With current community-based NFTs or NFT loyalty programs, NFT interoperability creates a win-win opportunity for esports teams to provide another advantage to their NFTs while also attracting a new player base.

 

This concept of NFT composability fits seamlessly into the preceding principles, as well as the gaming industry's multi-channel, multi-stakeholder structure. NFTs utilized in an esports team's loyalty program can provide customized access to a number of NFT-enabled games, increasing usefulness for NFT holders, raising visibility for Web3 gaming firms, and increasing income for esports teams.

 

The Collaboration Between Web3 Gaming and Esports

There's no denying that the Web3 gaming and esports sectors are quite similar. They have the same core demographic, with the esports business attracting a larger underage audience. They are both emerging sectors that are completely digital and borderless. They both rely on strong communities to support their operations and business strategies.

Esports firms, like other sports organizations, are primarily brands. All monetization initiatives are dependent on the community that these esports companies can attract, build, engage, and convert.

That is why non-fungible tokens (NFTs) and blockchain games represent an especially attractive prospect for esports companies to achieve economic sustainability. Because video games are entirely digital, the esports community has its roots online. The core esports audience understands the desire for digital goods such as in-game skins, equipment, and battle passes. Blockchain technology is pioneering a new and improved type of digital asset, one that is already being utilized in Web3 to ignite communities, increase participation, and inspire brand loyalty.  

 

Wrapping up

The esports sector has expanded dramatically in recent years, enthralling millions of followers across the world. However, monetizing its fan base and achieving long-term profitability remain substantial obstacles. The complexity of multi-game ecosystems, platform dependencies, and the changing digital landscape necessitate that esports teams investigate novel tactics for better engaging and monetizing their audience.

 

Esports teams can create unique and engaging experiences for clients by leveraging blockchain technology and NFTs, hence promoting loyalty and community development. As the esports and Web3 businesses expand, businesses who embrace and implement new technologies in inventive ways will most certainly be at the forefront of determining the future of digital entertainment and community interaction. Dappsfirm provides blockchain development services that will assist your gaming business reach new heights. Our team of professionals has considerable expertise with blockchain technology and can assist you in developing and learning more about Blockchain for esports to engage and excite your users.

Contact us today to learn more about our services and how we can help you build blockchain games for your business !