There are over 3.1 billion gamers globally, making up more than a third of Earth’s population, according to Business Insider. There are different types of gaming customers, all with specific needs and behaviours, but what they all have in common is an inclination toward trying new things, such as new payment methods, new technologies and new ways of communicating. And now, a growing number of gamers and crypto investors are diving into NFT gaming.
What is NFT?
Non-fungible tokens, or NFTs, are digital assets held on a blockchain that allow owners to track their assets wherever they go and that can also be resold to former holders. Gamers’ desire to seek out rare items, collect limited trinkets, and unlock precious artworks and souvenirs are very much aligned with the ethos of NFTs.
In games, these NFTs could be in-game items, collectables, or avatars that give special abilities or powers. As the game grows in popularity, the NFTs gain value. For some games, players are allowed to create their own NFTs, which adds even more value to the experience.
Monetising NFT gaming
NFT games earn from players by charging for entry, by allowing players to buy an avatar or an online content pack, or by taking a percentage from the NFT items bought and traded in-game. Assets within the game world are stored as NFTs, which are valuable to collectors and players, and they can also be sold. NFT game assets can be unique and are also tamper-proof – that is why some blockchain game assets are considered more valuable than others.
Players can gain NFT assets through creating or growing new characters, purchasing digital assets on native or third party marketplaces, or unlocking new items. Once acquired, these assets are in the sole possession of the player and can be sold or distributed as they wish – this is why this gaming model is called Play To Earn.
One of the most popular Play to Earn games using NFT payments is called Axie Infinity, which resembles Pokémon and is based on Ethereum. Players can breed and collect NFT based digital pets called Axies with the purpose of battling other players. These assets are tradable on the Ethereum NFT Marketplaces, and their price depends on their rareness and unique traits. To join the game, you need to purchase three Axies, and for each battle, players receive rewards in the form of the game’s currency called “smooth love potion”, which allows players to further breed digital pets. This currency is an ERC20 token which is the standard used for creating and issuing smart contracts on the Ethereum block and is also sold at exchanges.
The future holds great opportunities
Gaming is moving from the play to win model, where players purchase items with no ROI, to the play to earn model, where players are actively looking for financial rewards for their gaming activities.
As decentralised games have gained popularity, Play-to-Earn Guilds have emerged to help new players get started. These organisations are made up of investors, gamers, and managers who act as intermediaries between players and in-game items by purchasing NFTs and lending them to players to use for NFT gaming. The guilds get a portion of the earnings and the rent paid to the guild by the player. Most of the time, the profits go back into the development of the gaming guild.
The success of the NFT Games is based on the interoperability between gaming assets and exchanges, as assets are based on the blockchain and can be converted or reused in different blockchain-based games.
Another tactic that is gaining popularity in the NFT Gaming world is NFT Staking which allows players to gain passive income by earning tokens from NFT by keeping the NFT locked (or “staking”) and not selling it. As one of the biggest NFT problems is liquidity, it’s hard to find a buyer, and sometimes their value is subjective. NFT staking, on the other hand, provides a solution to this problem since it allows holders to earn from NFTs without having to find a buyer directly.
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