Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Will GameCredits make money from gaming?

Speculators are asking will GameCredits make money from gaming because of the recent boom in MMOGs. 

GameCredits (GAME) is one of several cryptocurrencies creators design to cash in on the booming games industry. The Entertainment Software Association and The NPD Group estimate US 2018 gaming industry revenues at $43.8 billion, TechCrunch reports. Thus games revenues were up 18% from 2017.

Massive Multiplayer Online Games (MMOGs); like Fortnite, are driving games industry growth, Netflix (NASDAQ: NFLX) CEO Reed Hastings tells shareholders. “We compete with (and lose to) Fortnite more than HBO,” Hastings admits in is latest shareholder letter.

Gaming is Larger than Streaming

Hastings is scared of Epic Games’ Fortnite because video-game makers generate more money than streaming services.

Multichannel News estimates 2018 US video streaming revenues at $28.8 billion; for example. Therefore, game producers’ revenues exceeded streaming services’ proceeds by $15 billion last year. To clarify, $43.8 billion-$28.8 billion equals $15 billion. However, streaming services made $69 billion globally in 2018 and could grow to $129 billion by 2023, Multichannel News calculates.

In contrast, estimates the total value of the worldwide games industry at $134.9 billion. Interestingly, mobile games (valued at $63.2 billion) and smartphone games (estimated value $50 billion) are the most lucrative, Gamesindustry calculates.

MMOGs are making a lot of Money

Meanwhile, traditional console games brought in $38.3 billion, tablet games earned $13.2 billion, PC games generated $33.4 billion in revenues, tablet games and boxed and downloaded games grossed $29.2 billion.

Revenues  for all segments of gaming except Browser PC games are growing. However, browser PC games are a minor component with $4.3 billion.

Games revenues grew at a rate of 10.9% between 2017 and 2018. Interesting, old-school console games experienced the most growth (15.2%) in 2018. Unfortunately, Gamesindustry’s numbers do not include MMOGs.

However, Statista estimates global PC/MMO (massive multiplayer online) gaming revenues at $30.7 billion for 2017. Additionally, Statista estimates 2017 revenue from MMOGs at $2.5 billion. Additionally, one category of MMOGs, Shooter online games saw its revenues increase by $237 million in North America in 2017.

Will GameCredits make Money from MMOGs?

Thus it is easy to see why there is so much interest in cryptocurrency payment solutions for MMOGs. There is a vast consumer base of people used to spending real money on digital products (MMOGs).

Consequently, the brains behind blockchain platforms like The Abyss (ABYS) and GameCredits bet those players will be willing to pay for gaming with digital currencies. Unfortunately, there is little evidence MMOG players are rushing into the cryptocurrency markets.

What Value Do the GameCredits Have?

Notably, CoinSwitch estimates GameCredits (GAME) had a Market Cap of just $6.746 million, a 24 Hour Market Volume of $143730, and a Coin Price of 9.7₵ on 7 June 2019. GameCredits achieved those numbers despite a Coin Supply of 69.836 million GAME.

Meanwhile, CoinMarketCap gave GamesCredits a Coin Price of 9.7₵, a Market Capitalization of $6.761 million, and a 24-Hour Market Volume of $145,096 on the same day. In addition, CoinMarketCap estimates there was a Circulating Supply of 69.836 million GAME and a Maximum Supply of 84 million GAME on the same day.

Plus, GameCredits was the 423rd ranked cryptocurrency on CoinMarketCap on 7 June 2019. I think these numbers demonstrate there is little truth the arrogant boast that “GameCredits (GAME) is a blockchain-based digital currency widely used by the gaming community.” However, GameCredits makes several such boasts at its website.

Yes you can Buy Games with Game Credits

Yet the GameCredits website does not list a single example of a game you can buy or play with GAME. Instead, you have to go the GameCredits Store to shop for games like TitanFall2.

However, when I visited it on 4 June 2019, the GameCredits Store was accepting payment in US dollars and Game Credits. However, the GameCredits Store is not pushing GAME. Instead, GAME is available as an alternative payment method in the checkout.  

Moreover, GameCredits has an alliance with Microsoft (NASDAQ: MSFT). You can access both the Windows Store and XBox Live through the GameCredits Store. Interestingly, you can also buy Apple (NASDAQ: AAPL) and STEAM and Rockstar games through the GameCredits Store.

Therefore, GameCredits offers access to more games than The Abyss. Currently, The Abyss offers access to several MMOGs through its site. However, The Abyss has a close relationship with Epic Games, and participates in Epic’s Unreal Engine games creation platform.

Are GameCredits a Good Cryptocurrency?

I think GameCredits (GAME) attributes as a cryptocurrency are questionable. In particular, GAME is not Ethereum convertible or compatible.

Consequently, GAME cannot be used on popular Ethereum platforms like Bancor’s Liquidity Network. In addition, you cannot easily convert GAME tokens into Ethereum Request for Comment (ERC20) tokens. Since most platform tokens are ERC this could limit GAME’s use.

Finally, there appears to be no fast way to convert GameCredits into fiat currency. This could be a real problem because the GameCredits Store appears to be the only platform that accepts GAME. Instead, you have to go to an exchange and sell the GAME for cash.

Thus, GameCredits adds a cumbersome; and potentially expensive, step to the transaction process. My guess is that step will deter a lot of gamers from using GAME.

Notably, there is probably no grocery store, restaurant, filling station, or landlord that accepts GAME tokens. Unless gamers have stopped eating, driving, and living indoors that severely limits the appeal of GAME.

Moreover, there are many gamers in countries like China and India where cryptocurrency is illegal or severely restricted. How are those people supposed to buy from the GameCredits Store?

  Gamers Need a Stablecoin

I think what gamers really need is not another gaming token but a stablecoin for gaming.

A stablecoin is an altcoin that contains a smart contract. The smart contract controls access to fiat currency a platform keeps in a bank’s trust account. Essentially when the stablecoin is spent the smart contract releases the fiat currency to the recipient of the funds.

For instance, the Winklevoss Twins’ Gemini Dollar (GUSD) releases US Dollars held by the State Street Bank (NYSE: STT). Thus, I like to think of a stablecoin as an API (application programming interface) that enables a transaction rather than an altcoin.

Why We Need a Gaming Stablecoin

A gaming stablecoin could drive mass adoption of cryptocurrency by giving players something they can cash out quickly if they need money fast.

For example, a player could use her game tokens to pay her electric bill. The electric utility could accept the tokens because they will instantly pay in dollars or Euros.

The smart move for platforms like The Abyss and GameCredits will be to offer US Dollar, Euro, Rupee, and Yen Stablecoins, in addition to platform tokens. Importantly, stablecoins provide an added layer of protection because they store the fiat currency funds in insured bank accounts. Thus, players’ money will be safer.

My prediction is that the blockchain gaming platform that introduces a gaming stablecoin will be the first to be widely adopted. Another popular option could be for GameCredits to start accepting payment in stablecoins like Tether (USDT), MakerDao (DAO) and Carbon (CUSD).

Stablecoins will be the future of gaming tokens. Thus I think it is only a matter of time before a gaming stablecoin supplements tokens like The Abyss (ABYS) and GameCredits. Finally, I think avoiding GAME is a wise move for speculators because I do not foresee gamers widely adopting this cryptocurrency.