How crypto payments become a game-changer for online gaming

Video games have become an integral part of daily life for hundreds of millions of people worldwide, with the number of players growing each year across all age groups, social statuses, and lifestyles. Even more so, video gaming has gained recognition beyond entertainment, when the International Olympic Committee (IOC) announced the first-ever Esports Games to be hosted by Saudi Arabia in 2025.

Esports, also known as cybersport, is undeniably a massive and rapidly expanding industry. According to a forecast from Statista, the total revenue of esports will be around $2.4 billion in 2024. This figure is projected to grow fivefold by 2032, surpassing the impressive $10 billion mark.

This trend represents just a fraction of the broader online gaming industry. In this article, we will explore how online games have revolutionized the video gaming experience, fostered a new digital economy, and how crypto payments can further enhance the gaming experience.

Going Online: The Emergence of Digital Economy in Video Games

Esports is built around online games that have redefined the video gaming landscape. At the dawn of the video gaming industry, studios focused on single-player, narrative-driven titles meant to be completed once. However, the rise of the internet introduced a multiplayer mode, pioneered by classics like Heroes of Might and Magic 3, Diablo, and Starcraft in the late '90s. This allowed players to continuously engage with one another, enjoying games repeatedly.

The next step was games designed solely for online play, such as Ultima Online and Lineage. Online games enabled developers to regularly add new content, keeping players engaged longer and creating new monetization opportunities, ultimately extending the game's life cycle.

Probably, the most popular genre in online gaming is the role-playing game (RPG). MMORPGs, in particular, create an immersive gameplay loop where players follow a plot, complete quests, and advance their digital avatars with new skills, abilities, and in-game items. They essentially construct a truly unique character on their own.

Another genre that has dominated the online gaming scene is the first-person shooter (FPS). Notable examples include Counter-Strike: Global Offensive (CS: GO), released by Valve in 2012, and its successor, Counter-Strike 2 (CS2). Both titles have not only attracted millions of active players but also established a massive virtual economy centered around skins, and unique appearances for in-game items.

As of mid-August 2024, the market cap of the CS2 skin market was estimated at approximately $3.5 billion, according to Priceempire.

And that’s just the beginning. While hundreds of online games continue to attract new players and revenue, mobile games have outpaced them all. The global mobile gaming market was valued at over $184 billion in 2022 and is projected to reach $244 billion by the end of 2024, according to Precedence Research.

Together, online and mobile games offer huge opportunities for generating a stable revenue stream, bringing this thriving market to new heights.

Payment Methods: Fueling the Monetization of Online and Mobile Games

Despite some criticism of monetization strategies, both developers and players agree that online and mobile games should involve some form of payment. To sustain and grow their games, developers, and publishers have implemented various monetization models, common across both online and mobile platforms, with some minor variations and preferences:

1. Pay-to-Play (P2P). In this model, players pay a one-time fee to purchase the game. Beyond the initial purchase, additional costs may include expansions or downloadable content (DLC).
2. Subscription. This model assumes that players pay a recurring fee to access the game. Subscription is often used by MMORPGs, where ongoing revenue is needed to support updates and server maintenance.
3. Free-to-Play (F2P). Monetization occurs through in-game purchases like cosmetics, items, or features, attracting a large player base and generating revenue via microtransactions.
4. Freemium. This hybrid model offers the base game for free, with essential features or content requiring additional payment. It allows players to try the game before committing financially.
5. Seasonal pass. Using this technique, players are made to purchase a seasonal pass that offers rewards as they progress, encouraging regular engagement. This is often paired with F2P games.
6. DLC and expansion packs. Players pay for additional content that extends the base game, such as new quests, characters, or items. The model is common in both P2P and F2P games to offer ongoing content.
7. In-game advertising. Often used in mobile games, in this model developers earn by displaying ads within the game environment, often without disrupting the user experience, usually in the form of limited ad videos or images.
8. Loot boxes. With loot boxes, players purchase virtual crates containing random in-game items. Although controversial, this model remains popular for its potential to generate significant revenue through microtransactions.
9. Pay-to-win. Players can buy items or advantages that provide a competitive edge, a model that, while lucrative in some markets, is often criticized for creating an unbalanced playing field.

To ensure a seamless user experience, it’s crucial for game developers to offer a wide range of payment options and make transactions as fast and convenient as possible. The availability and accessibility of diverse payment methods directly impact a game’s profitability by influencing player spending behavior and expanding its global reach. Companies like Xsolla, Sightline Payments, and PlaySpan specialize in streamlining in-game payments.

Common payment methods for online games include bank cards, digital wallets (e.g., PayPal), and mobile payment systems (e.g., Apple Pay, Google Pay). However, in a highly competitive industry, offering more payment options can become a significant advantage, attracting more players and becoming a key feature. One of the latest methods the financial industry offers is cryptocurrency payments.

Why Integrating Crypto Payments Can Make Your Online Game a Bestseller

The integration of cryptocurrencies into the online gaming payment ecosystem offers benefits to both users and developers far beyond mere transactions. From expanding the user base to enhancing monetization strategies and tapping into a web3-based economy, crypto payments are becoming a crucial element in the modern gaming landscape.

Expansion of the User Base

Cryptocurrency payments can attract a diverse and global audience by overcoming the geographical and financial limitations of traditional payment methods. While card transactions may be restricted by regional regulations or require lengthy approval, cryptocurrencies are borderless by default. This opens the door to gamers from parts of the world where traditional payments are inaccessible or inconvenient, thus expanding market reach at a lower cost.

Moreover, cryptocurrencies resonate with the tech-savvy younger generation. By accepting crypto payments, developers can engage this enthusiastic demographic group to expand the player base and enhance the game's image as innovative and modern.

More Sophisticated Monetization Strategies

Crypto payments unlock new monetization opportunities. For instance, developers can create unique, tradable in-game assets as non-fungible tokens (NFTs), offering players true ownership and enabling them to buy, sell, or trade items. This can significantly boost engagement and spending within the game.

Blockchain-based assets also allow for innovative economic models. Limited-edition items or exclusive content can be auctioned as NFTs, creating scarcity and driving demand. Additionally, the transparency and security of blockchain reduce fraud and chargebacks, ensuring developers receive payments promptly.

NFTs are no longer niche. It’d be wrong to think that NFTs are still marginal. We can see this technology being adopted by some of the largest game developers. Ubisoft, which owns major franchises like Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six, opened the NFT marketplace Ubisoft Quartz in 2021 and has announced a number of web3 games in the works in April 2024.

Improved Payment Flexibility and Security

Cryptocurrencies add value by offering reliable, secure, and promising alternatives to traditional payment systems. Crypto transactions are typically faster, available 24/7, and more cost-efficient due to being decentralized, effectively getting rid of intermediaries.

The decentralized nature of cryptocurrencies reduces reliance on third-party processors, avoiding fees, delays, and errors common with banks. Additionally, blockchain’s immutable ledger ensures transaction security, making it resistant to tampering and fraud. This transparency builds trust with users, while developers benefit from fewer disputes and a more stable revenue stream.

How to Integrate Crypto Payment Gateway into an Online Game

Integrating crypto payments into online games can become a really challenging task if a company decides to do it on its own. It requires not only significant technical expertise but also ongoing maintenance, along with handling cryptocurrency storage, conversion to fiat currencies, and compliance with regulatory reporting.

Cryptonix offers a streamlined alternative. This all-in-one platform simplifies the process of accepting cryptocurrencies in various ways:

• Easy integration. A crypto payment link can be effortlessly added to a website’s payment options, making it simple to start accepting cryptocurrencies.
• Customizable API. For those who prefer a tailored solution, Cryptonix has API that allows for customizing the process of paying with crypto to align with the specific game design and user experience needs.
• Custodial business wallet. In addition to crypto payment processing, the Cryptonix equips its clients with the special wallet to manage all crypto funds. The wallet supports the 16 most popular digital assets and includes features like conversion to fiat currencies (e.g. USD and EUR), along with an option to automatically convert crypto to fiat. Wallet's users can also perform crypto-to-crypto exchanges within the platform. Conversion rates are optimal thanks to sourcing price data from leading crypto trading platforms.
• Compliance. Cryptonix is a fully regulated EU-based company, ensuring that all cryptocurrency operations on the platform are fully compliant with the existing regulations. It is possible to easily generate reports for government agencies and withdraw fiat currencies to business bank accounts.
• User crypto balances. Beyond payments, the Cryptonix platform enables management of a separate crypto balance for every user. When a user registers in a game and selects crypto as his payment method, an individual blockchain address generated by Cryptonix is assigned to him, which he can top up to spend crypto within the game. These funds are kept separate and clearly identified in a Cryptonix business wallet.

If you're interested in deepening how Cryptonix can provide crypto payment solutions for your games ecosystem, let us know so our team can provide a demo and guidance through the process.

Conclusion

Unquestionably, incorporating cryptocurrency payments into online gaming is transforming the industry for both users and developers. By expanding the user base, boosting monetization opportunities, and enhancing payment flexibility and security, crypto payments can bring additional value and new mechanics to this already mature industry. As we observe the gaming community increasingly adopting digital currencies, we are confident that the future of online gaming will be closely intertwined with cryptocurrencies.

With Cryptonix, game developers can bypass the engineering complexities and seamlessly integrate crypto payments into their products, all while maintaining the flexibility to meet their specific needs and ensuring compliance within a fully regulated framework.