Virtual Gaming Tokens vs Blockchain Based Tokens: Sgame Pro a Game Changer?

Virtual gaming tokens have been around for a while now, but the Sgame Pro project is set to change things with blockchain-based tokens.

Fiat virtual currencies have dominated the gaming world for decades, be it gems in Clash of Clans or V-bucks in Fortnite - but they have little in common with their crypto-coin counterparts.

Could blockchain technology help change the paradigm of microtransactions in video games? And more importantly—what are the differences between virtual gaming tokens of the past and the blockchain-based tokens of the future?

History of In-Game Tokens

In 2003, South Korean game publishers were facing a problem - traditional publishing methods of shipping boxed games proved to be a risky task in a country where illegally downloading pirated copies of software was the norm. Protecting games from being copied and counterfeited proved to be more difficult than developing them. To solve this issue, one publisher borrowed ideas from the software as a service industry (SaaS) - the games were to be free to download and play. It was the in-game currency that cost money.

South Korean publishers were not the first to introduce in-game currencies, but they were the first to perfect them. For the first time, gold, gems, coins and other fantasy measurements of wealth could be bought at a fixed price from the publisher and spent in-game. This created vast virtual economies in games such as Second Life, World of Warcraft, and Maple Story.

However, these in-game tokens have very little in common with blockchain-based tokens. And while the world’s perception of money is changing with the advent of cryptocurrencies, video games still rely on the same “microtransactions” model they have been using for the past 15 years.

But this model is about to change as developers experiment with blockchain and consider better alternatives that will benefit both publishers and gamers alike.

Virtual Planned Economies vs. the Laissez-Faire Blockchain Approach

But this model is about to change as developers experiment with blockchain and consider better alternatives that will benefit both publishers and gamers alike.

Virtual Gaming Tokens

Blockchain-based Tokens

Centralized – solely controlled by the publisher

Decentralized – controlled by the network’s community

Encourage irresponsible spending due to one-way utility

Encourage responsible spending due to multiple use-cases

Exist only within the game’s ecosystem

Exist independently of the game’s ecosystem

No value - only price, determined by the publisher

Value is determined by the free market

Players have no control over their tokens

Players retain complete control over their tokens

There is no incentive to save or ‘hodl’ these tokens

These tokens are like money, you can spend or save, both have benefits

No maximum supply - publishers can create infinite tokens

Supply controlled by the blockchain network, giving it real value

Basically an expense

Essentially an investment

Video game economies operate on principles similar to those of ‘controlled’ economy states, where the exchange rates, price and the total amount of tokens a person can hold in their account are all decided by the publishers. Publishers also exercise complete control over the potential uses of virtual gaming tokens and can revoke the right to use those tokens on an individual basis - and without prior notice.

And just like such economies, the current model of virtual gaming economies is far from ideal for the end-user.

On the other hand, games that may use blockchain-based tokens are closer to free-market economies. While regulations imposed by the publisher can exist (and remain necessary in some cases), the approach is mostly laissez-faire. The value of blockchain-based tokens is subjective and determined by participants in the ecosystem, and their flow is dictated by the same principles which control markets such as the US or the EU. Most importantly, players remain in full control of their token assets, and can actually make a living by ‘earning’ or ‘mining’ them.

Virtual Gaming Tokens Destined for Failure

Virtual Gaming Tokens are directly tied to microtransactions - a business model where players can purchase virtual items or currencies through micropayments - financial transactions of small sums of money. While in-game purchases make sense for publishers, the one-way direction of virtual gaming tokens incentivizes irresponsible spending by players.

Moreover, in-game currencies encourage a ‘pay-to-win’ mentality, and since this is their only utility, the model has been accused of promoting addictive behavior. Even publishing juggernauts such as Electronic Arts and Blizzard Activision have been criticized over this practice by the gaming community.

Watchdogs in America, Asia, and the European Union are looking into ways to regulate or outright ban microtransaction practices, which calls the whole existence of the business model into question.

Moreover, traditional Virtual Gaming Tokens exist solely in the ecosystem of a single game, which isolates them as an expense as they are non-exchangeable and players cannot use them outside of the game.

Blockchain-based tokens avoid most of these pitfalls due to their inherent nature - being flexible, immutable and limited-supply transactional instruments with real-world value.

Sgame Pro and the SGM Token

One of the forerunners of the upcoming blockchain gaming revolution is Sgame Pro – a mobile gaming platform which rewards players with native SGM crypto-tokens for their gaming skills and allows investors to benefit from Sgame’s organic liquidity model.

SGM is a blockchain token based on Sgame’s unique ‘Proof of Play’ protocol. By simply playing games on the Sgame platform, gamers will get the chance to ‘mine’ “Play-Blocks” and claim the SGM block reward.

The SGM token is the native currency for the platform and will be compatible with all games for in-app purchases, as well as offering multiple utility functions, such as launching challenges with other players and buying products and services from the Sgame marketplace.

Sgame Pro focuses exclusively on mobile games and is going to be compatible with some of the most popular titles on both Google Play Store and the App Store.

Additionally, the platform incentivizes top players and influencers to create their own followings and earn rewards for their referrals. Game publishers are also able to tap into a new stream of revenue due to the platform’s Asynchronous Multiplayer mode, where players challenge each other to win SGM tokens, a split of which is credited to the publisher.

Ultimately, Sgame Pro’s entire economy revolves around the circulation of SGM tokens between the platform and players, publishers, influencers, and merchants. And since the token has a limited supply, it appreciates in value as demand goes up, benefiting all participants and stakeholders.

Sgame Pro has already attracted major mobile game publishers and will release the second version of their platform later this year. The platform has also partnered up with several major industry influencers, including PewDiePie, the most popular YouTuber in the world.

Currently, the project is gearing up for its public sale at the back of its hugely successful private sale, where it raised over $6 million. The public sale is scheduled for September and you can learn more about participation on Sgame Pro’s official website or follow them on Twitter and Telegram for more updates.