Organizers of small esports tournaments have begun to use blockchain technology to host tournaments and distribute prize pools. But don’t expect to see it in the big leagues, investors say.
Esports, or electronic sports, is a form of organized competition through video games. Players sometimes called esports athletes usually compete for prize money individually or as a team.
Dave Harris, managing director of esports investment firm Guinevere Capital, told Cointelegraph that he has started to see blockchain being used in amateur gaming competitions.
However, in my opinion, it will take more time before the big titles and professional tournaments will consider using the technology.
“There are certainly many places where this technology can be used or used in sports, but it will take time for mass adoption into mainstream titles and events, and as always the major game publishers are king,” he said.
Ivy Fung, general manager of the Esports Players League (ESPL), said that he believes that blockchain technology is a perfect fit when it comes to distributing prize pools.
The Singapore-based company operates a blockchain-powered platform that distributes prize money through digital assets like nonfungible tokens (NFTs) and crypto tokens directly to winners’ digital wallets.
According to Fung, the use of blockchain makes the distribution of prize pools easier because it bypasses barriers such as cross-border transfer fees charged by traditional banks.
“If you’re talking about a global tournament, you need an effective way to distribute the prize pool so you don’t have to wait for the winner to give you a bank account and then verify it and all this.”
However, the prizes are nowhere near international esports tournaments, which can reach millions of dollars.
Harris believes that blockchain and Web3 have an important role to play in esports, but thinks that future developments will need to look outside the box to gain mainstream attention.
“There are also more efficient ways to use this technology to track and display results, but I’m not sure that this will really change the phone,” he said.
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“I think a model that allows user-generated content to be commercialized and revenue to be fairly distributed among all stakeholders is an opportunity for the industry,” he said.
related: NFT gaming trends in 2023: Industry executives expect big players to enter
Gaming enthusiasts have a love-hate relationship with crypto, especially when NFTs are involved.
An October survey from Coda Labs found that traditional gamers are not fans of cryptocurrencies or NFTs, rating them 4.5 and 4.3 out of 10, respectively.
French gaming giant Ubisoft Entertainment was slammed last year for its Quartz NFT project, forcing the company to later backpedal on plans to integrate NFT into games.
Even so, Harris says that ultimately, the technology will benefit players, stating:
“In principle, ‘actually owning’ an item in a game and potentially being able to transfer it to another game or environment is a great proposition for gamers.”
“Real technology will be used more in the future, but I think now there is skepticism and in some cases pushback from the public where technology so far has often manifested in what it sees as over-commercial or get-rich-quick plans,” he said.
“I think the learning curve is definitely there,” Fung said.
“Of course there will be people against it, but as long as we can show the benefits of using this system, I think they will use it sooner or later. That will be the norm. Everyone will use it,” he added.
The total market value of the esports industry is predicted to reach $1.62 billion in 2024, according to data released by Exploding Topik.