While blockchain technology has started gaining traction among smaller esports ventures for prize pool distribution, it hasn’t yet infiltrated the arena of major tournament organizers.
The world of esports – organized competitive gaming involving players or ‘esports athletes’ vying for monetary rewards individually or as a team – is beginning to explore the potential of blockchain technology. Small-scale esports tournament organizers are currently spearheading this shift by leveraging blockchain to host competitions and distribute prize pools. Yet, according to one industry insider, mainstream acceptance by large-scale leagues remains in the distant future.
Dave Harris, the head of esports investment firm Guinevere Capital, shared with Cointelegraph his observation of blockchain adoption in amateur gaming events. Still, he maintains that its acceptance by high-profile tournaments and renowned titles will necessitate a more extended timeline.
“We’re witnessing areas in esports where this technology is or could be implemented, but for mass adoption in mainstream events and titles, we’ll need more time. As always, key game publishers hold significant sway in these decisions,” he commented.
Ivy Fung, the general manager at the Esports Players League (ESPL), advocates for blockchain technology as an efficient tool for prize pool distribution. The Singapore-based firm manages a blockchain-integrated platform that awards prize money via digital assets, including nonfungible tokens (NFTs) and crypto tokens, directly to winners’ digital wallets.
Fung asserts that blockchain usage facilitates the prize pool’s distribution by eliminating obstacles like cross-border transfer fees associated with traditional banking systems. However, the rewards distributed through these platforms are still a far cry from the multi-million dollar prizes seen in international esports tournaments.
“Global tournaments necessitate a practical method for prize pool distribution that doesn’t require waiting for the winner to provide their bank details and subsequent verification processes,” Fung explained.
Harris envisions a significant role for blockchain and Web3 within the esports landscape, but suggests that creative applications of the technology will be needed to truly captivate the mainstream audience.
“Innovative uses of this technology for result tracking and display might exist, but I’m skeptical about their potential to truly move the needle,” he noted. He further proposed a model that commercializes user-generated content and equitably distributes revenue among all stakeholders as a potential opportunity for the industry.
Despite the gaming community’s fluctuating sentiments towards cryptocurrencies and NFTs, Harris affirms the ultimate benefit of the technology for gamers, arguing for the value of owning in-game items with the potential for transferring them to other games or environments.
“The use of this technology is set to increase in the future, despite current skepticism and resistance from the community, often stemming from perceptions of over-commercialization or get-rich-quick schemes,” he added.
Fung also acknowledged the existing learning curve but remains optimistic about eventual adoption. “While there will be opposition, if we can effectively demonstrate the system’s benefits, I believe adoption will follow. In time, this will become the norm,” she stated.
Esports industry’s total market value is projected to reach $1.62 billion by 2024, as per data released by Exploding Topics.