Beyond CryptoKitties: 10 Trends That Defined the Year in Crypto Gaming

Brian Flynn is a product designer and writer, who publishes NIFTY News, a newsletter on crypto collectables.

The following is an exclusive contribution to CoinDesk’s 2018 Year in Review. 

While the digital asset market has been volatile this year, a new set of digital assets emerged: non-fungible tokens.

Non-fungible tokens (NFTs) are digital sound goods that are unique and openly programmable by nature. Here’s a list of the top headlines and stories affecting non-fungible tokens this year, followed by a list of predictions for 2019.

1. New standards — Non-fungible tokens came with a whole bundle of ways to construct game assets. Standards must be enforced and adopted to ensure tokens can talk to one another. Non-fungible tokens on Ethereum were birthed with the ERC-721 standard, but evolved quickly over the past year. Standards like Enjin’s ERC-1155 and ERC-998 allowed tokens to own other tokens and save on gas costs.
2. Non-Fungible Token Marketplaces — New non-fungible tokens started to appear after CryptoKitties launched. OpenSea and RareBits came onto the scene in the first quarter of the year allowing users to sell their game assets directly outside of the game’s environment. New tools started to arise like FanBits so users can make their own unique digital assets. These user-generated platforms have failed to attract buyers because of the value uncertainty, similar to many ICOs.
3. Digital Art Market — The user-generated market was most popular with artist platforms. New platforms such as Rare Art Labs, SuperRare and dada.NYC emerged that ascribed true digital scarcity and authenticity to the art market. With programmable contracts, artists can earn fees on secondary-market sales and even split it between multiple parties, unlike traditional physical art.
4. Record-setting sales — Despite the fluctuating market volatility, some NFTs sold for extraordinarily high prices. This includes the Gods Unchained card that sold for $60,000, the CryptoKitty that sold for $170,000 and virtual real estate in Decentraland selling up to $200,000.
5. Second-Layer Experiences — One of the biggest selling points of NFTs is the permissionless programmability component; being able to build on top of others’ platforms. CryptoKitties created and promoted the KittyVerse to promote third-party developers to create these experiences. This brought about KittyRace, KittyHats and more but they failed to gain any significant traction.
6. Intellectual Property  – In March, CryptoKitties announced the launch of “celebrity kitties” with Curry Kitty (Steph Curry) as the first in the lineup. After some confusion and miscommunication, Axiom Zen, the creator of CryptoKitties, was threatened with a lawsuit over breach of NDA. Axiom Zen hoped to clear up the third-party open programmability component and preserve value capture of NFTs with the launch the NIFTY license. This caused some uproar in the community and eventually led the team to explore other methods of value capture.
7. What’s next for CryptoKitties? – Just recently the team behind CryptoKitties raised an additional $15 million. Dapper Labs (the new entity behind CryptoKitties) will now be building out new blockchain game experiences and tools with their new funding. Some of the investors on the list include Samsung Next, aXiomatic Gaming, and William Morris Endeavor, a talent agency.While the team hasn’t released exact details on their plan, given the list of investors we could expect partnerships with major brands. Niantic Labs, the studio behind Pokémon Go also announced a $200 million Series C, also had aXiomatic Gaming and Samsung as part of the raise, similar to Dapper Labs’ raise. This might be foreshadowing something much larger to come.
8. Better user experiences tools – The most pressing problem of dapps and non-fungible tokens was the need to use MetaMask and have ethereum on-hand to complete transactions. Others took notice, like Bitski, creating a lockbox for users’ digital goods without them needing to manage their private key. Coinbase Wallet, Vault, Opera and Trust Wallet (owned by Binance) also released dApp browsers to play blockchain games from a phone.
9. Developers flock to scalability – As users suffered from a lack of Ethereum scalability, EOS and WAX were able to take developer share. Mythical Games announced a $16 million raise to build blockchain games on EOS and their first title, Blankos. Meanwhile, some blockchain game studios are banking on Plasma like Loom Network and Blockade Games. Blockade Games announced $13 million in funding to build out their flagship title Neon District on top of Loom’s plasma implementation.
10. Title to watch: Gods Unchained – Coinbase-backed blockchain game Gods Unchained came out of the woodwork this year from game studio Fuel Games. The studio dipped its toes in the water with a game called EtherBots in the beginning of the year, but quickly realized the limitations of on-chain gameplay without scalability.Gods Unchained is a trading-card game utilizing NFTs but with off-chain gameplay. Users can still truly own their digital goods while not having to worry about “nerfing” or “buffing” cards in the game. Every time a player purchases a pack, some funds are sent to the tournament prize pool. The prize pool is already greater than $300,000 for the yet-to-be-release game.

2019 Predictions

1. Stablecoins will hide the blockchain – Next year is shaping up to be a battle between centralized and decentralized players. It’s going to be more than likely that stablecoins like the CENTRE Foundation’s USD-C and MakerDAO’s Dai become fundamental to the Ethereum blockchain gaming ecosystem.As users start to earn in platforms, users will cash out in stablecoins. All digital goods will be priced in US dollars instead of ETH or other currencies for easier conversion.
2. Intersection of Play and Work – Consumer mining and staking services will blur the lines between play and labor. Users will know how much they can earn within a specific time frame. As liquidity starts to build in blockchain games, users will exactly know how much they can earn for playing a game for a specific amount of time.
3. Celebrities and digital merchandise – The consumer tech space has seen an influx of avatar apps this year. Snapchat doubled down on Bitmoji, Genies raises $10 million, and Zepeto reached the top of the app store. Celebrities and sports players will issue their own digital merchandise to fans which will grant VIP access and feature discounts.

It may be a while before digital merchandise lives on a blockchain — but it shouldn’t be long from now.

Have an opinionated take on 2018? CoinDesk is seeking submissions for our 2018 in Review. Email news [at] coindesk.com to learn how to get involved. 

CryptoKitties image via KittyWagon