Blockchain technology is still far from hitting the big esports leagues, says investor

Small eSports tournament organizers have started dabbling in blockchain technology to host tournaments and award prize pools. But don’t expect to see it in the big leagues just yet, says one investor.

Esports, or electronic sports, is a form of organized competition via video games. Players sometimes referred to as eSports players usually compete for prize money either individually or as a team.

Dave Harris, CEO of esports investment firm Guinevere Capital, told Cointelegraph that he has started to see blockchain being used in amateur gaming competitions.

In his opinion, however, it will take more time before the major titles and professional tournaments will consider adopting the technology.

“There are certainly many places where this technology can or is being used in eSports, but it will take time for mass adoption in the mainstream titles and events, and as always, the big game publishers are the kingpins,” he said.

Ivy Fung, general manager of the Esports Players League (ESPL), says she believes blockchain technology is a good fit when it comes to awarding prize pools.

The Singapore-based company operates a blockchain-powered platform that distributes prize money through digital assets such as nonfungible tokens (NFTs) and crypto-tokens directly into winners’ digital wallets.

According to Fung, the use of blockchain makes the distribution of the prize pool far easier because it bypasses barriers such as cross-border transfer fees charged by traditional banks.

“When you’re talking about a global tournament, you need an efficient way to distribute the prize pool so you don’t have to wait for the winner to give us their bank account and then verify and all these things.”

However, the prizes are nowhere near international esports tournaments, which can be in the millions of dollars.

Harris believes that blockchain and Web3 have an important role to play in eSports, but believes that future developments will need to look outside the box to truly attract mainstream attention.

“There may be more efficient ways to use this technology to track and display results, but I’m not sure this is really going to move the dial,” he said.

“I think a model that allows user-generated content to be commercialized and the revenue distributed fairly among all stakeholders is an opportunity for the industry,” he added.

Related: NFT gaming trends in 2023: Industry leaders expect more big players to jump in

Gaming enthusiasts have had a love-hate relationship with crypto, especially when NFTs are involved.

A survey by Coda Labs in October found that traditional players were not a fan of cryptocurrencies or NFTs, ranking their sentiment at 4.5 and 4.3 out of 10 respectively.

French gaming giant Ubisoft Entertainment was criticized last year over its NFT project Quartz, forcing the company to later back its plans to integrate NFTs into its games.

Despite this, Harris said the technology will ultimately benefit players, saying:

“In principle, it’s a good proposition for players to ‘actually own’ in-game items and potentially be able to transfer them to other games or environments.”

“The actual technology will be used more and more in the future, but I think there is skepticism and in some cases backlash from society where the technology to date has often manifested itself in what they see as over-commercialization or get-rich-quick schemes,” he added.

“I think the learning curve is definitely there,” Fung said.

“There will definitely be people who oppose it, but as long as we can show them the benefits of using this system, I think they will adopt it sooner or later. That will be the norm. Everyone wants to use it, she added.

The total market value of the eSports industry is predicted to reach $1.62 billion by 2024, according to data released by Exploding Topics.