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NFTs and Video games, it doesn’t sound so crazy anymore

20210517_NFTs and video games

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The rise of blockchain technology paves the way for new business models in gaming. Play-to-earn becomes the next evolution of free-to-play which is transforming users from cash machines into economy contributors.

Speaking of NFTs or ‘Non-fungible tokens’, many people would be scratching their heads wondering what exactly it is and why are we so hyped about it? Even if we try to find the definition online, one may still think the concept is quite absurd. But it HAPPENED, and actually it no longer does sound crazy as one may think it is. 

The simple explanation would be that NFTs refer to something that is UNIQUE and CAN’T BE REPLACED with something else. Unlike money, of which any one-hundred-dollar notes are fungible and of the same value. On the contrary, each NFT has unique properties which cannot be interchanged with anything else. 

The Boom of ‘Digital Art’

According to Forbes, the usage of non-fungible token ecosystems has become more prevalent in today’s world, and their acceptance is constantly growing. Several companies find novel uses for NFTs such as domain names, virtual worlds, decentralized finance (DeFi), art marketplaces, virtual real estate, crypto art museums, and NFTs for physical collectibles. This is no exception for the gaming world, as the industry also embraces the concept of digital scarcity with open arms. 

The blockchain gaming space is growing fast. After a successful entry of crypto-collectibles over the last few years under the popular game ‘CryptoKitties’, gaming decides to move forward and deeper into the world of virtual reality. At the time of writing based on DappRadar which provides real-time top blockchain games, space mining game ‘Alien World’ and property trading game ‘Upland’ have been fighting it out in regards to active users.

NFTs and Video Games

The reasons why the video game sector is going to be one of the sectors that has the most impact from the growing acceptance and usage of NFTs are plenty. According to Newzoo, the gaming industry is expected to grow at an annual rate of almost 10% over the next five years (this is in the most conservative case). The concept of NFTs will help generate a new market niche that we continue to see exponential growth in demand, namely the rise in value of ‘virtual goods’. Today’s gamers are more willing to spend on in-game items similar to what they spend in their real life. This is particularly true during the ongoing pandemic as physical activities are being limited, but this trend will likely continue post-COVID-19. This is a true blessing for game developers and game artists as with NFTs in the game, it is now possible for them to monetize and assign the intellectual property of their virtual good’s creations. 

What would this mean for the Future of Gaming? 

So what actually does this mean for the future of gaming? The answer is ‘greater creativity’ or ‘a continuous gaming product improvement’, given the hard-work of creation now can be ‘valued’ at a very high prize. The use of Blockchain technology in gaming is no longer just about avoiding payment gateways for users to claim that they have won prizes so quickly without intermediaries at a low commission in cryptocurrencies, but now all the artistic creativity and graphic skills could be brought to light on gaming platforms. These high skilled creators will be able to receive the payment that is considered fair for their works, without going through third parties.  

In fact, NFTs are considered “One-of-a-kind” assets.  They are creating a world of opportunities as well as marking a new era of virtual existence in which the next great milestone of gaming will be drawn towards.

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