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Blockchain could help legalise the loot boxes

Niji Ng

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Blockchain could help legalise the loot boxes
Reading Time: 3 minutes

Loot boxes, which have been in existence for about a decade, have run into legal problems in countries such as the Netherlands and Belgium. The redeemable virtual rewards system, which involves accessing maps, weapons and a whole range of upgrades to your in-game functionality, had already become so popular that some developers have wholly shifted their monetisation models away from paid-for-games to free-to-play games because of the revenue they provide.

But the legal issues are threatening the core business model of loot boxes. That is why developers are thinking of reverting to a business model based on advertising or selling games rather than giving them away for free.

However, there can be another option. Rather than making such a drastic U-turn, they could find salvation in the shape of the blockchain. By implementing a new tokenised economic model that this technology provides, game developers could not only continue to make money without having to rely on advertising but also implement a system that would reward gamers for the time they spend playing games.

The problem with loot boxes

Loot boxes first emerged in Asia, but have become more well-known after social game developers like Zynga successfully implemented them. Since then, loot boxes have slowly begun to embed themselves into the fabric of most games, even where their incorporation seems unnecessary. Then loot boxes’ presence in triple-A console games like Overwatch, Battlefront 2, and Shadow of War ramped up their presence in terms of public awareness.

When an entry fee or cost is present in a gaming monetisation scheme, along with luck or chance, and the potential for some type of monetary gain, the scheme is almost definitely going to be considered gambling as a result of those three key elements. Since loot boxes have both a cost and a “random element,” they have landed game makers in hot water with regulators. The cash purchase of these boxes, for regulators in the Netherlands and Belgium, resembles gambling – and is therefore an illegal offering.

While companies like EA have said they will persist with loot boxes, confident that other regulators do not see the situation in the same way as the Belgian or the Dutch authorities, there is no guarantee that other authorities would not act to quash them.

Blockchain as a solution

Rather than putting these key revenue flows at risk though, one potential path that publishers could pursue is to leverage a new form of blockchain monetisation. For example, my company, Loot, has a new mining process that leverages player skill to generate new units of cryptocurrency instead of GPU or CPU mining.

All blockchain networks have some sort of incentive mechanism built into them, which helps the network to function properly. In the case of Bitcoin, this is the proof of work algorithm that keeps the network secure and trustworthy by making it hard to add new transaction data to the blockchain. For game networks, the algorithm could be based not on computational power, but gameplay and the “work” done by players. This would eliminate the initial entry fee, which would prevent regulators from labelling it gambling.

Even though you can already earn virtual currencies within games, cryptocurrencies that are mined and awarded as a result of gameplay are a unique new solution because traditional virtual currencies in games have no value outside of the game, while cryptocurrencies hold their value everywhere. This is the key, because if the coins players spend in the game to buy loot boxes and other items have real value outside of the game, the developers can accept their own in-game coins as real payment for their items. This solves the problem of traditional entry fees and ultimately eliminates the consumer risk that is arguably the most important of the three elements that define what is gambling and what is not.

From the game publisher’s perspective, this would mean they could continue to offer loot boxes but just have them paid for with cryptocurrency that gamers have mined and earned from their skill in play, instead of with real money.

For example, in Overwatch players are currently unable to spend in-game credits and have to spend real money or wait for a level up to grab a loot box. If the in-game credits were a cryptocurrency generated on a blockchain as a result of player skill, Blizzard could accept the credits as payment (at no cost to the user) and exchange the credits for dollars like any other cryptocurrency. This means the players do not have to spend any of their “real” money while the developer has the same revenue they did before.

As publishers and developers consider the effect that loot box regulation might have on profits, they should consider blockchain technology as a potential solution. Publishers should understand that this innovative new technology could safeguard existing revenue streams and also incentivise gamers to play more.

 

 

Tobias Batton is CEO of Signal Zero. The company behind Loot, the world’s first blockchain protocol that allows gamers to earn and mine tradable tokens as a result of their skill and without entry fees.

Niji has been in the writing industry for well over a decade or so. He prides himself as one of the few survivors left in the world who have actually mastered the impossible art of copy editing. Niji graduated in Physics and obtained his Master’s degree in Communication and Journalism. He has always interested in sports writing and travel writing. He has written for numerous websites and his in-depth analytical articles top sports magazines like Cricket Today and Sports Today. Besides reporting industry headlines from all around the globe, Niji is also head of the content management team at Impressions Content Management, based in Kerala, India, which offers writing and editing services to clients around the world.

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SoftGamings teams up with Yggdrasil to offer its innovative games

George Miller

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SoftGamings teams up with Yggdrasil to offer its innovative games
Reading Time: 2 minutes

 

SoftGamings is pleased to announce its partnership with Yggdrasil as it supplies all its best-performing casino slots and table games in its portfolio to its teeming casino operators.

Yggdrasil is an iGaming provider company founded in 2013. Over the years, the iGaming provider has become a creator, innovator, and a game changer, that remains driven by a strong passion for developing outstanding games. Little wonder Yggdrasil is among the best gaming providers with numerous awards and recognition to its profile.

Softgamings: outstanding iGaming solution provider

SoftGamings is an industry expert iGaming provider that knows everything about building and growing successful online casino businesses. The iGaming solution provider keeps sporadically increasing as a result of its innovative approach to handling casino business.

SoftGamings provides the iGaming market with vast products and services that are outstanding. The iGaming solution provider has 40+ top game providers and offers a unified API Integration package for casino operators to seamlessly integrate games.

With these cutting-edge products and services that SoftGamings provides the iGaming industry, it remains a significant iGaming provider to reckon on.

The Director of Partnerships in SoftGamings, Irina Sazonova had this to say:

“We are very excited about the partnership with Yggdrasil. It is a foremost provider with a huge portfolio of fascinating games which are extremely popular among gamblers. We are pleased to have their quality products as part of our integration offerings.”

Yggdrasil – innovative gaming solutions supplier

Yggdrasil is a provider of superior online gaming solutions for igaming operators. The business was founded in 2013 and has since emerged as one of the industry’s most respected and acclaimed suppliers.

Yggdrasil operates a highly scalable business model and covers three product verticals: Casino Slots, Table Games and Bingo, in addition to the business verticals: Yggdrasil White Label Studios, YGS Masters and Yggdrasil Dragons. Since its inception, Yggdrasil has embarked on a solid growth trajectory enabled by a strong corporate culture focused on innovation, creativity, quality and technology leadership. Yggdrasil is headquartered in Sweden and has offices in Malta (operational HQ), Poland and Gibraltar.

With these innovative games and revolutionary gaming solutions provided by the iGaming provider, SoftGamings’ portfolio is perfect for Yggdrasil’s products.

 

About SoftGamings:
SoftGamings is a B2B casino platforms provider and gaming systems aggregator. With over 10 years of experience in the industry, SoftGamings provides solutions demanded in the market and develops its own creative solutions – White Label, Turnkey, Self-Service, Bitcoin platform solutions, Bonus System Standalone feature, Sportsbook solution, Slots Bundle, Live Bundle and Casino Games Integration. SoftGamings’ strong IT team can also provide gamification possibilities, which is one of the major industry trends. Products portfolio includes 40+ gaming suppliers with 3000+ games. The company offers live dealer solutions from Evolution Gaming, NetEnt, Ezugi, Authentic Gaming, Lucky Streak etc, slots from NetEnt, Microgaming, BetSoft, Endorphina, Habanero, Booming Games, WorldMatch etc, sportsbook, hosting, licensing and banking services. Over 100 clients use SoftGamings products and services since 2007.

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Compliance Updates

Belgium heads new project to standardise European gaming law

Niji Ng

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Belgium heads new project to standardise European gaming law
Photo Source: rfi.fr
Reading Time: 1 minute

 

Peter Naessens, the director of the Belgian Gaming Commission, is going to lead a new project aimed to standardise online gambling legislation across Europe.

The project is under the ageis of the European Committee for Standardisation. A number of industry bodies and regulators join hands in the project to create rules for compliance and reporting that will become standard in the industry.

Their most important goal is to implement standards on the sort of data the online gambling operators need to send to their respective regulators, as well as the manner in which they do it. Technical Committee 456 will be the group responsible for setting these standards.

The committee has the task of “Reporting in support of online gambling supervision.”

The impetus for creating this committee came from a request by the European Commission. It was labelled “Standardisation request to the ‘European Committee for Standardisation’ as regards a European standard on reporting in support of supervision of online gambling services by the gambling regulatory authorities of the Member States.”

Currently, member states of the European Union’s regulatory authorities are in charge of supervising online gambling activities in the region. This is done through information reported by the operators or the software suppliers about online gambling.

Standards are currently lacking and need to be improved. This project will develop new requirements for the reporting of online gambling. This will help improve levels of consumer protection, game fairness, transparency of operations, and identifying and stopping match-fixing and other forms of fraud.

Feedback and suggestions will be obtained from gambling regulators, operators, consumers associations and gaming suppliers. They can offer their expertise and guidance on how best the group can create these new standards.

The new committee will strive to rectify any issues present. New standards will help all parties concerned.

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Industry News

GiG signs Swedish artist, Erik Segerstedt, for audio collaboration agreement with GiG Games

George Miller

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GiG signs Swedish artist, Erik Segerstedt, for audio collaboration agreement with GiG Games
Reading Time: 2 minutes

 

Gaming Innovation Group Inc. (GiG) has signed an agreement with Swedish artist Erik Segerstedt, who  will deliver all audio for the upcoming game ‘Popstar’ which is being built by GiG’s in-house casino games developer, GiG Games.

‘Popstar’ is planned to be released in H1 2019 across all markets where GiG Games has a presence.

Mathias Larsson, Managing Director of GiG Games, says: “We are very excited about this agreement as it is the first time in our industry where a renowned artist has been involved from day one to compose audio for a game. Erik will create all audio for the game ‘Popstar’ which include computer sound generated effects, background music and much more. On top of that, GiG has taken a stake in the upcoming album from Erik which will be released simultaneously with the game launch.”

Artist, Erik Segerstedt, says: “I am very excited about this opportunity. I am used to co-working with record labels, however this is a totally new experience for me. Making sounds and effects for the game is very inspiring and I believe my expertise and experience as an artist will bring a new dimension to the game ‘Popstar’.”

Carlos Barth, CEO of Summit Music Management says: “This is the start of a revolution in the music industry where partners of an artist are going to be backing an album instead of a record company. These collaborations are going to support bringing new music to the audience as the business model is not  limited as it was before. Now, we can be more flexible in finding ways to ensure both partners reach a successful result.’”

Popstar’ will be released in H1 2019 across all markets where GiG Games has a presence.

 

About Erik Segerstedt:

Erik Segerstedt is one of Sweden’s most recognised artists. As a singer and piano player, he was first introduced to the public through the casting show “Idol”. Following his appearance on the show he formed a group with other contestants called ‘EMD’ . ‘EMD’ was a big success and produced a string of radio hits and successful tours. Following ‘EMD’, Erik started a solo career and has had a number of successful song releases as well as  appearances in the Swedish television’s dance contest; ‘Let’s Dance’ . Erik is also a regular guest artist on radio shows, movies, television, theatre and concerts.

 

About Gaming Innovation Group (GiG):

Gaming Innovation Group Inc. is a technology company providing products and services throughout the entire value chain in the iGaming industry. Founded in 2012, Gaming Innovation Group’s vision is ‘To open up iGaming and make it fair and fun for all’. Through its ecosystem of products and services, it is connecting operators, suppliers and users, to create the best iGaming experiences in the world. Gaming Innovation Group operates out of Malta and is listed on the Oslo Stock Exchange under the ticker symbol GIG.

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