Taiwanese multiplatform gaming entertainment publisher Gamania Group announced today at the 2018 Asia Blockchain Summit its roadmap to build and grow a distributed ledger blockchain system for virtual items.

Video game publishers have sought to monetize games by selling virtual items to consumers and allow players to trade items in their games. Securities market trader Deutsche Börse Group estimated in 2015 the market size for virtual items already exceeded $52 billion up from $15 billion in 2012, leading to predictions that the market still has a great deal of room still to grow.

This trend has led to a greater need to secure and track the trade of virtual items, and Gamania believes blockchain technology will enhance the industry in Asia. The gaming company also seeks to allow video game publishers to present what it is calling “Initial Item Offerings,” a play on the blockchain industry standard of initial coin offerings, or the sale of tokens used to raise money for startups.

Sales of virtual items in massively multiplayer online games such as World of Warcraft developed by Blizzard Entertainment Inc. have proven they can raise vast amounts of money. For example, in 2010 the game raised about $2 million in four hours by selling a translucent flying horse mount, more than $2.5 million for the Red Cross in 2012 for a small fiery cat pet and $1.9 million in 2015 for a blue goat pet raising money for Ebola relief efforts.

Gamania will introduce its vast network of customers, with more than 12 million users joining per year, to promote initial item offerings throughout Asia. “Gamania Group has been in the gaming industry for over 20 years with professional market insight,” said Albert Liu, chairman of Gamania Group (pictured). “The virtual item system scheduled to launch this year will demonstrate the value of blockchain and it has the opportunity to become a key disruptive technology within the industry.”

Blockchain technology provides a decentralized, secure platform for tracking transactions between parties using a tamperproof distributed ledger. It is the backbone of well-known virtual currencies such as bitcoin and Ethereum, which see millions of dollars in trade every day. Blockchains can also be used to provide proof of digital ownership for virtual goods and proof of exchange when these items are traded by giving owners cryptographic keys that control access.

Using this technology, Liu believes that the decentralized and digital nature of blockchain technology has the potential to free up many regional restrictions on virtual item trading and add additional security to trades that will increase consumer trust.

“Our proposed [Initial Item Offering system] will feature blockchain technology to create the first business model with large-scale operational economic benefits in the already massive and mature global gaming market,” Liu said.

The system, which will be provided by Gamania subsidiary Gash, will feature the ability for game companies to publish their own limited-run versions of virtual items. Since every item and transaction is recorded in a blockchain ledger, it will be possible to provide unique identifiers for each item and even limit the total number produced – and prove to customers, investors and auditors that the items are actually limited edition.

Game publishers can easily link up the Gash virtual item system without changing game code. Initial Item Offerings will not affect game balance settings, meaning game publishers can blockchain items already in the game. Collectors of special items can use the Gash online exchange and are not limited to trading only within the game itself.

Liu also added that game items attached to blockchain via Gash will be locked within the games they were created. This will be important because it means that different virtual economies will not interact and thus virtual items from other products will not interfere with game settings or balance.

Although Gamania’s blockchain virtual item trading system is carefully designed to limit to online games in this way, other blockchain-based item marketplaces have launched from startups in the industry.

Last year, DMarket announced the development of a virtual item marketplace designed to allow the trade of virtual items between games and Switzerland-based BLOCKv launched a digital goods trading marketplace for virtual tickets, coupons, music tracks and other virtual goods. Video game developer Crytek GmbH and digital currency startup Crycash also announced a blockchain currency designed to allow gamers to exchange currencies for virtual items between interrelated gaming platforms.

Between these examples above of blockchain virtual item marketplaces and the success of Blizzard in producing and selling virtual items, Gamania’s offering enters into an industry that is still figuring itself out.

Although it is difficult to pin down exactly how much gamers spend on virtual items in video games, Superdata Research released a report about the game Fortnite, published by Epic Games Inc., showing the company raised $126 million this year alone from outfits and silly emotes.

Worldwide Asset Exchange, another blockchain-based virtual item marketplace developed by Exposition Park Holdings, estimates that the global virtual item trading industry exceeds $50 billion a year as it extends between gaming consoles, PC games and mobile games. Much of this money is spent by players buying outfits, vehicles, equipment and other items within games and from each other.

Image: Gamania Group