Non-fungible tokens, or NFTs as they have become more broadly known, are far more than a new iteration of blockchain technology making global headlines. Over the past few years, the broader inclusion and integration of NFTs in games have shown to be one of the most innovative concepts the gaming industry and community have seen in recent memory.
The concept of NFTs as naturally unique, indivisible, and rare assets that are bought and sold via blockchain poses a multitude of benefits and opportunities for gamers. Since 2017, titles like CryptoKitties, Decentraland, and My Crypto Heroes have experienced widespread success in no small part due to their integration of NFTs into their gaming model. In doing so, these titles have provided gamers a means to create value for themselves by acquiring in-game content inherently categorized as NFTs which can then be empowered, traded, or sold to other players for a profit—all using their own Ethereum cryptocurrency in their blockchain wallets.
As the gaming industry continues to experience a surge in interest regarding NFTs from consumers and developers alike, it can be surmised that we will witness additional video game titles released in the future with similar NFT integration built into their models. How this integration of NFTs into games might evolve, although, still remains to be seen. What can be certain, however, is that there are several key steps necessary to successfully integrate NFTs into additional game titles. Here are a couple of ways through which this can best be accomplished.
In-game purchases and the “play to earn” gaming model
Currencies — or rather, virtual currencies — in video games are nothing new. Think back to the very first Super Mario title you played on one of Nintendo’s systems and how you smashed blocks to obtain coins, or how newer titles like Grand Theft Auto, World of Warcraft, or Call of Duty allow you to earn in-game currency and rewards for completing tasks within their virtual worlds. The only pitfall with these in-game currencies is that they cannot be transferred anywhere outside of the game itself, or even to another game file or gaming profile; once they are lost, they are lost for good.
But with the integration of NFTs into the gaming sector, this no longer needs to be the case. By transmuting these in-game currencies, rewards, and other assets into NFTs, their value and ownership never depreciate over time. Rather, they appreciate, increasing in value as they become rarer and more unique.
In this way, integrating NFTs into games has transformed the concept of a title’s in-game marketplace into a wholly-inclusive gaming economy; one in which gamers can earn real-world value merely by playing the games they enjoy and acquiring NFTs in the form of in-game assets which can then be sold for a profit using their own cryptocurrency. This evolution of NFTs in gaming has spawned what has since become known as the “play to earn” model.
The only caveat to the “play to earn” gaming model is that, when in-game content is produced and released as NFTs on the blockchain, that content operating as available in-game assets must be perceived as valuable to the user. Without inherent value, any asset — NFT or otherwise — will never be desired for purchase. As such, the integration of NFTs into games via the “pay to earn” model can only be as successful as the players wish it to be.
Creating and managing NFTs as desired gaming assets
If you asked any passionate gamer if they would jump on an opportunity to earn real-world money and value simply from playing the video games they love, chances are high that the answer would almost universally be something akin to, “absolutely.” With the integration of NFTs into video games, this has become a reality. Look no further than the launch and subsequent success of the gaming title Axie Infinity. Through integrating not only NFTs, but unique and desirable NFTs acting as valuable in-game assets into its gaming model, Axie has allowed average, everyday gamers to essentially become millionaires overnight, providing much-needed income to many in underserved and poverty-stricken communities around the world.
In Axie’s case, as well as that of CryptoKitties, My Crypto Heroes, and other successful video games boasting NFT integration, the inclusion of NFTs into desirable in-game assets creates a two-way avenue for value. These titles offer value to players in the form of NFTs themselves as a new and emerging economic model. Simultaneously, those players then offer one another additional value by selling or trading their NFTs in the form of desirable in-game assets that appreciate in value over time as they become more unique and scarce.
With this in mind, the creation and management of NFTs as desired gaming assets falls to the responsibility of the developer—the one who creates the game, its in-game assets as NFTs, and releases it on the blockchain. It is not the responsibility of players to inherently place value in a certain game or the NFTs it contains; developers must remain connected to their community base of players (i.e., their target market of consumers) in order to understand where and why players find value from in-game NFTs. Being unable to do so could result in their game’s failure, but succeeding in this could prove to be — quite literally — a game-changer for all parties involved.
This post was written by: Hironobu Ueno, CEO — double jump.tokyo