Blockchain revolutionizes video game transactions, Marc Andreessen among billionaires funding leading gaming startups

by Arthur · March 29, 2023

Venture capital firm Andreessen Horowitz led a $40 million funding round on March 21 for CCP Games, a developer of blockchain-based massively multiplayer (MM) online games.

CCP will use the funding to produce a high-budget and exciting game title with blockchain technology. The company will enable smart contracts to build a closer relationship between players in the game. CCP Games introduces its planned game in the popular Eve Online game universe.

Marc Andreessen and Ben Horowitz run Andreessen Horowitz, which invests in early-stage startups and established firms. It invests in various verticals, including cryptocurrency, financial technology (fintech), various information technology (IT) solutions and healthcare.

The investment from Andreessen Horowitz reinforces the growing interest in blockchain gaming and a shift in the ways players engage with games and each other.

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Microtransactions on the blockchain

Microtransactions in video games occur when a player pays money for a virtual item such as a new skin, upgraded weapon, or a “loot box” filled with various items. These transactions are common in free-to-play games that operate under a “freemium” model, but also appear in premium games with a traditional fee to buy or play.

Microtransactions bring significant revenue to developers, with many free-to-play games earning more than traditional games. A 2022 report by research firm Mercator Advisory Group found the market for global online microtransactions to be approximately $33.4 billion. It also noted that some games bring in huge sums, with League of Legends taking in roughly $1.75 billion annually from the game’s loyal 115 global player base.

Blockchain-based networks and games create a new pay-to-earn gaming model instead of the pay-to-play structure enabled by traditional microtransactions. In the new blockchain-based model, called GameFi, users can invest in virtual assets such as non-fungible tokens (NFT), use them in games or hold them as investments and resell the digital assets for profit. GameFi describes an intersection between gaming and finance, where users can invest in digital assets and turn game-specific tokens into cryptocurrencies and dollars.

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Blockchain-based virtual goods marketplace

One startup poised to capitalize on microtransaction growth, GameFi models, and the move toward pay-to-profit is Gameflip. The company allows players to turn in the virtual goods they have purchased through microtransactions. It recognizes the frustrations of players who may spend hundreds of dollars on in-game purchases but want to see that spending disappear when they stop playing the related game.

Gameflip unlocks the value of these digital assets from a particular game by providing players with a blockchain-based platform to buy, sell and trade digital gaming assets. By using blockchain, the company can provide transparency, authenticity and ease of operation to millions of players. The company looks towards the player-owned gaming future made possible by blockchain, NFTs and other digital assets and technologies. The model is already attracting the attention of gamers, with the company reporting lifetime sales of more than $160 million in its community of over 6 million players. Revenue comes from the marketplace’s business model, including seller commissions and buyer purchase fees.

Gameflip seeks equity funding through StartEngine. The minimum investment is a minimum of $250. The company’s valuation at StartEngine is $34.78 million.

The shift to blockchain gaming reflects growing interest in blockchain technology as a foundation for next-generation applications. For example, Amazon.com Inc. recently announced a partnership between Amazon Web Services and Ava Labs, creator of the popular Avalanche blockchain platform, which will enable NFTs, Web3 gaming and custom-built blockchains.

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This article Blockchain Revolutionizing Video Game Transactions, Marc Andreessen Among Billionaires Funding Leading Gaming Startups originally appeared on Benzinga.com