How NFT Is Changing The Gaming Industry

Over the last few months, the word NFT has made its way into the daily mental lexicon of internet users: news headlines are all about it. Surely, the hype of NFT and the ambiguity of this tech phenomenon have left you uncertain.

A new phenomenon always has a moment of “divisiveness”: some consider it a compelling drive for progress, while others think about the NFT craze as a clear-cut failure already at the nascent stage.

Anyway, NFT is already entering various industries, one of which is gaming. Is NFT considered an impactful bias in the world of gaming? What is the response from gaming giants like Ubisoft? What do gamers think? And finally, does NFT have a chance to become an integral part of the gaming industry in the future? Keep reading the article to find more about NFT in gaming.

In-game NFTs today

Today we see a shift from “play-to-entertain” to “play-to-earn”. Of course, eSports is not a new phenomenon compared to the NFT technology, but the latter is more of an opportunity to improve the “play-to-earn” concept and give it a new lease of life.

The forecast shows that the number of those interested in eSports is only increasing, while the VR&AR implementation is only fuelling this interest. So people will spend more and more time in virtual worlds where the development of metaverse and NFTs adoption can enhance their presence.

Decentralization and new crypto technologies in gaming have made the “gaming approach” completely new. Players will not just want to win but to create their metaverse world with their properties and avatars, which will easily integrate with other gamers’ worlds and thus create the digital economy. In this blockchain-based economy, their properties will be represented by NFTs, and the execution of business transactions for buying and selling will be done through crypto and smart contracts.

The online gaming industry is valued at $59.7 billion. The income from video games grows exponentially every year and it’s not going to decrease. Moreover, the number of gamers will reach ~3.32 billion by the end of 2024.

It is worth paying credit to the gaming giants, who have learned how to make fortunes from the gaming business. Of course, not all game-oriented companies have rushed to implement NFTs in their products, but most of the leading players have already entered this future-proof race.

NFT and game giants

The possibilities of NFTs within games are endless: from ownership to transferability. In addition, a new level of game customization has been introduced with “skins”, which are outfits or weapons to identify the avatar’s personality.

A market leader like Roblox has gained such popularity because of the opportunity for players to use a vast arsenal of skins to customize their in-game avatars. These skins are the object of sale or purchase in the form of NFTs, forcing players to spend thousands of dollars to acquire a “unique skin”.

And take Warcraft: the game allows you to create entire worlds using various tools. As a result, players create their worlds with digital property, which they can later sell. It is the mechanism into which NFTs, representing that property, are implemented.

NFTs can also undergo a modification phase. For example, Vitalik Buterin, a co-founder of Ethereum, wants to make NFTs “soulbound” like a class of items in World of Warcraft. It can prevent other players from exchanging or selling items in the in-game auction and thus avoid “twinking”.

The technology allows the worlds of different games to be connected so that a player from another game can buy your skin. One of the goals of introducing the metaverse and NFTs is to make the game world a coherent infrastructure where players can interact on a cross-game level without “central control”. Some believe that this modification could lead to a game no longer being the “game” but just another way of buying and selling.

According to CryptoSlam, the Ethereum-based game Axie Infinity is now the most significant player in the area, with a trading volume of over $3.6 billion.

At the same time, another game giant Ubisoft is considered one of the first major video game producers to initially take an interest in crypto themes supporting blockchain-based start-ups for the past few years. Now the giant has started to adopt the NFT by introducing Ubisoft Quartz. The platform allows game enthusiasts to monetize in-game items by acquiring them as NFTs.

Square Enix also intends to expand its presence in blockchain gaming. In November, the company declared its plans to produce NFT games. Square Enix’s president Yosuke Matsuda said on 1 January 2022 that decentralization and NFTs “will become a major gaming trend”.

Konami, EA, and Zynga have also expressed a positive view on the adoption of NFT in gameplay.

A different take on NFTs

The world of gaming and cryptocurrency seem like natural companions, but the gaming community is divided between “pros” and “cons”. While NFT devotees see it as a way to monetize the gaming universe, some consider it as a fraudulent approach.

Square Enix’s statement did not find much support, Ubisoft’s NFTs did not sell well, and because of the furious fan reaction, GSC Game World was forced to abandon its plan to include NFTs in STALKER 2.

Environmental issue

The main objection is the environmental issue: minting results in significant power consumption due to the non-stop operation of hardware. Michael Yum, founder and CEO of PM Studios, sees this reason more globally, stating that blaming blockchain alone for “not going green” is not quite right because the global usage of the internet is also “not green”.

Fraud issue

Another reason is fraud in the NFT world. Many gamers see it as a crypto bubble about to burst. As a result, there will not be a cent left of the touted unique NFTs. Gamers don’t want to pay big money and be left with useless digital objects.

Legal issue

Interoperability of digital assets is challenging to implement, as there are many technical, aesthetic, and legal barriers to transferring NFTs within different games. In addition, one of the concepts is that the acquisition of an NFT does not just give the right to take possession of an item, but “the right to represent a thing, the right to do things with a thing, and the right to expect certain things in speculative environments”, according to the article by Ribbonfarm Studio.

Ownership of NFT from a legal point of view remains a major unresolved issue. Realizing this point from a jurisdictional point of view is probably something that should be addressed in the future.

Money issue

Many gamers reject the concept of play-to-earn: “We don’t play games to make money, we play games for enjoyment”.

What’s further down the line?

It’s no longer possible to stop the implementation of NFT and the concept of metaverse adoption. Even though this hype theme is at the origins of evolution, big names and big numbers are becoming more and more common.

It is predicted that the merger of NFT and gaming could lead to a global market of trillions where VR & AR implementation will also contribute.

NFTs in games have already begun to make their mark. But the main challenge for developers is to make the innovation exciting and engaging in terms of gameplay, not just a way to make money.

On top of that, trust is the primary driver of development. So if companies build a solid foundation for a seamless introduction of NFTs into the world of gaming metaverse, where tokens have more than just a monetary essence attached to them, then this whole story will be a success for both game giants and players alike.

We consider NFT to bring more meaning to gameplay than just “play to earn”. So, NFT can have the following use cases:

  • Cross-platform playability
  • Transaction immediacy
  • Facilitated trading terms
  • “Scam-free” environment
  • Game worlds interoperability
  • Enhanced game collectibles
  • “Desirability and utility” of in-game NFT items.
Source: Naavik Research

Finally, the NFT-centric games are a kind of art created by both developers and those who benefit from their endeavours. After all, it’s not just about the money, it’s about making the game world more exciting. In this world, gamer will be the creators of their own real-virtual lives, while the game companies will provide opportunities to unleash that creativity.

AUTHORS

Rustam I. — CCO. LinkedIn

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Ecosystem of NFT&Metaverse Products

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