The worlds of cryptocurrency and video NFT games are becoming convergent. The combination nicknamed “play-to-earn,” and more commonly referred to as “web3,” has the potential to usher in a new generation of gaming experiences with real-world economics and new player incentives. This, in turn, has the potential to fundamentally alter the gaming industry’s existing business structures.
That is if the game industry’s conventional platform gatekeepers choose to open their doors. Currently, many of them remain closed, relegating these NFT games to obscure parts of the internet, and it’s unclear what it will take to convince the industry’s most powerful corporations to embrace this new technology. Meanwhile, the blockchain gaming business has grown to be one of the fastest-growing parts of the game industry, with no indications of slowing down.
Initially, NFT games were pay-to-play, designed for quarter slots and arcades. Decades later, and as a result of innovation and pioneering business strategies, we now have free-to-play games as well, which monetize through an in-game economy of digital products — Fortnite dances and Genshin Impact skins, for example — that is strictly controlled by the creator.
However, NFT games are an entirely new paradigm, based on the concept of producing real-world value from in-game items and other types of digital products via the use of non-fungible tokens, cryptocurrencies, and other blockchain technologies.
If this trend continues, it might help provide the groundwork for the much-desired metaverse that so many social media and gaming companies seem to be pursuing. Mark Zuckerberg believes that the market for virtual apparel in the future metaverse may be worth a billion dollars.
The gaming industry is about to be disrupted by cryptocurrency. At first glance, these NFT games titles seem to be the next buzzy NFT craze, as crypto fans, businesses, and investors apply the non-fungible token idea to all manner of digital commodities.
The concept is straightforward: rather than purchasing a game outright or investing money in a free-to-play title, the game would pay you to play it, with built-in incentives to compensate for your time and often a tiny financial share in the business that created it.
By participating in a game of this kind, a player may earn unique goods with verifiable ownership that can subsequently be exchanged, purchased, or sold. This is where the blockchain and NFT components come into play since these products have unique IDs that attribute a changeable value to them, much like a limited-supply commodity or work of art.
Typically, the game’s exchange is for cryptocurrency, as is the case with the Pokémon-like NFT games platform Axie Infinity, whose parent firm was valued at $3 billion earlier this month after a Series B led by Andreesen Horowitz. In that regard, these gaming NFTs are similar to those made from digital artwork, trading cards, or other sorts of online collectibles that have been swept up in this year’s crypto gold rush. However, gaming NFTs wreak havoc on current game economies, some of which already permit real-world trading of in-game commodities (though many game makers forbid it).
Valve joined the fray earlier this month, and the situation has grown out of hand. The business, which controls the world’s largest PC gaming marketplace, discreetly announced a ban on “blockchain-based apps that issue or facilitate the trade of cryptocurrencies or NFTs.” The firm, which is notorious for its secrecy, had nothing more to say on the subject.
A Steam prohibition on blockchain technology almost guarantees that NFT games will never reach the public, at least in the near future.
Due to the fact that no company has yet developed a mechanism for distributing such software through Apple or Google’s app stores, there are few other ways to reach new players aside from sideloading on Android or traditional desktop apps, both of which require players to seek out the game on their own.
Apple and Google have not officially prohibited such NFT games. However, not even Axie Infinity is accessible on mobile app stores at the moment, but the game’s designer hopes to offer it on mobile devices in the next months.
Valve’s decision has sown divisions in the video gaming industry. Epic, ever keen to destabilize its competition, intervened and said that it will promote blockchain gaming, despite CEO Tim Sweeney’s warning only weeks previously that NFTs and related concepts were fertile ground for frauds and fraud. You can read about A layman’s guide to NFT games by visiting http://yvkids.org/a-laymans-guide-to-nft-games/
Sweeney said that Epic is open to “innovation in the fields of technology and money,” as well as blockchain NFT games that “comply with applicable laws, disclose their conditions, and be age-rated appropriately.”
A group of blockchain and non-traditional gaming firms has now written to Valve, pleading with the corporation to change its decision. Valve has yet to make an official statement on the situation, albeit despite a number of conflicts over the years, the company seldom speaks out on policy or moderation concerns.
NFT games that include blockchain technology and web3 token-based technologies such as DAOs and NFTs may significantly improve user experience and open up new economic possibilities for both users and creators,” the letter states.
The surge in NFT gaming is inevitable, one way or another. The questions now are how large the market can grow without the support of traditional platform providers such as Apple, Google, or Valve, and how it will look in a gaming environment where even Epic, which has stated its support for blockchain in gaming, is not incorporating NFTs into its own products.
Axie Infinity is an excellent illustration of where things may go in the near future. The game, which is being developed by Vietnamese firm Sky Mavis, has a complicated economy based on two currencies that are used to breed new “Axies,” which are essentially imaginary animals similar to Pokémon that are kept on the blockchain. These currencies may be obtained by defeating Axies or by selling the ones you already own.
Axie Infinity’s innovative gaming structure has successfully propped up a whole new cryptocurrency, which is currently developing rapidly and rewarding individuals who invest in its economy with hundreds, if not millions, of dollars.
It’s understandable why investors are intrigued. According to investment company Drake Star Partners, $1.8 billion of the $9 billion in private finance secured in the first nine months of 2021 was for projects using NFTs. Every day, it seems as if new firms are forming, money are flooding in, and more established businesses are jumping on the NFT and blockchain gaming bandwagon. You can read more about blockchain gaming and NFT by clicking here.
Axie epitomizes a new generation of NFT games, in which designers are not motivated by fear but rather by the desire to create an open, free-market economy in which players may freely enter and exit,” Andreessen Horowitz general partner Arianna Simpson said earlier this month. “The new concept enables players to really own portions of the game and profit from their efforts as the game grows in popularity and profitability.”
It seems unavoidable that blockchain technology, and particularly NFTs, will become ingrained in the gaming business in the future. However, there is valid worry today about whether such principles should be completely implemented, with little to no governmental supervision or examination, in an industry already plagued by exploitative monetization and addictive gaming mechanisms. That’s not to mention the frauds, fraud, and other financial risks inherent in dealing with volatile cryptocurrencies that may make or destroy substantial fortunes in a matter of hours.