Social gaming platform developer FlowPlay Inc. today announced a partnership with Walt Disney Co.-incubated blockchain Dragonchain Inc. with the intent to build secure blockchain-based monetization for casual and social games.

Dragonchain is a distributed ledger technology platform, also known as a blockchain, that was developed at Disney’s Seattle campus in 2015 under the name “Disney Private Blockchain Platform” and became its own separate open-source project in 2016.

The company recently raised money for the platform with an initial coin offering that raised approximately $14.6 million.

Through this partnership, FlowPlay will use the Dragonchain platform in order to create in-game currencies that can be used for microtransactions, very small payments below a dollar used to purchase virtual items in games. Often microtransactions are used in social games to allow players to pay small amounts for extra lives, similar to how arcades used to work, in-game perks and things such as cosmetics for in-game avatars.

According to a Newzoo report on the global gaming market, digital gaming revenue will represent $94.4 billion, or 87 percent of the global market. Mobile is expected to be the most lucrative segment. Smartphone and tablet gaming grew 19 percent year over year to 46.1 billion, representing 42 percent of the market.

Mobile gaming, in particular, is a tempting space for the use of blockchain technology due to its capability to produce provably tradable currency. Most social gaming occurs on mobile devices when people are away from home entertainment-based consoles and personal computers. Mobile games make up a significant part of the market because people can carry them on their phones and play during commutes, waiting in the doctor’s office, at the grocery store or elsewhere.

When people spend more time in games, it’s more likely they will want to own virtual items in that game, purchase in-game currency and engage in the game’s economy. This is where blockchain technology would offer its greatest potential.

“Dragonchain and its technologies have the potential to make a huge impact in the games industry, by introducing a simple and secure way for players to earn and trade cryptocurrency through a decentralized blockchain system,” said Derrick Morton, FlowPlay’s chief executive.

With the capability of microtransactions, mobile casual and social games themselves use in-game currencies represented by gold, gems and other reflections of currency. Many games form their own economies by allowing these to be exchanged between players. That requires a trustworthy method of trading that currency.

Blockchains can also be used to secure virtual items themselves, making them provably unique and tradable between players. This potential use for blockchain technology has been explored by companies such as EverdreamSoft SA, publisher of Spells of Genesis. It’s a digital tradable card game which uses a blockchain to make cards actually tradable and DMarket, a decentralized marketplace for virtual items in games.

“With the technology’s roots in loyalty and rewards programs, we see several key areas of our business that can be enhanced and expanded through the Dragonchain platform,” said Morton.

FlowPlay will use Dragonchain’s blockchain technology to create an out-of-the-box platform for social gaming developers to simply attach a cryptocurrency to their game. Since a blockchain can be used to create a provably tradable currency or a framework for virtual items, integrating supplies additional value to developers as well as consumers of these games.

“Dragonchain was developed to provide companies with an easy-to-use blockchain platform that allows users to retain complete control of their data, providing a level of security not available in any other platform on the market,” said Eileen Quenin, president of the Dragonchain Foundation.

Quenin added that she believes from here on out, Dragonchain will provide an example for companies across the gaming industry looking to secure and optimize their own microtransaction and monetization systems.

“By strengthening our monetization platform with blockchain, we are exploring ways for our players to earn freely tradeable cryptocurrency in-game and use those rewards as tradable goods, to redeem for cash or in a variety of other ways,” Morton said.

FlowPlay expects to begin to implement Dragonchain’s platform across its suite of games next year.

Image: Dragonchain