Since their introduction in 2017, non-fungible tokens (NFTs) have ballooned in popularity across many consumer markets worldwide. While NFTs have received a global cult following due to their successful integration into the digital art trade, few consumer spaces hold as much potential for successful NFT integration as the video game industry.
As an emerging class of digital assets that are inherently unique and rare to those utilizing them, NFTs pose several benefits to gamers. For example, the successful integration of NFTs into games developed via blockchain technology like My Crypto Heroes and CryptoKitties has allowed users to create and earn real-world value simply from acquiring NFTs as in-game content in these titles. That content, serving as NFTs, can then be sold or traded to other players using cryptocurrency such as Ethereum stored in their blockchain wallets to generate additional, mutual value.
With the world continuing to watch the broader evolution of NFT adoption and integration into video games, it will not be a surprise to see an increase in the number of games that can successfully master this integration of NFTs into their gaming models. Although the result of this is bound to differ between games and developers, several steps must be taken to master the deeper integration of NFTs into video games.
NFTs as “play-to-earn” rewards
In-game currencies are not a new innovation. Some of the very first video games that achieved worldwide popularity introduced the concept of in-game currency. For instance, Mario smashes blocks to acquire gold coins in the first Super Mario games. Other games — even more significant and online multiplayer games — such as Call of Duty, World of Warcraft, and Fortnite all have their own versions of in-game currency that players can earn through completing specific tasks and use to acquire new, better items. Although, the one commonality between these in-game currencies is their inability to be transferred or used across different games or platforms, regardless of who the player using them is, when, or how.
However, successfully integrating NFTs into video games as a new iteration of in-game currency can break this status quo. Should game developers be able to transform the currencies, rewards, or other in-game assets they create into NFTs, not only is the value of those currencies not lost to players but can appreciate over time as those NFTs become rarer in nature.
Through integrating NFTs into games in this manner, a title’s in-game marketplace and the currency that fuels it can become a fully-inclusive digital economy founded upon a “play-to-earn” model; a model in which gamers can create and earn real value simply from playing the games they wish to and acquiring NFTs as in-game assets they can later sell or trade using cryptocurrency on the blockchain.
The only pitfall to this “play-to-earn” model in video games is that the asset or NFT itself must be considered in some way valuable to players. Without this present value, no NFT, in-game currency, or other digital assets will be purchased by players. This tells us that to successfully master the integration of NFTs into video games, developers must create ways to establish value for players.
Creating and managing assets as an economic model
It only takes a quick glimpse at the “gaming” sections of platforms such as YouTube or Twitch to realize that many passionate gamers would jump at the opportunity to earn real-world value from playing the games they enjoy. By successfully integrating NFTs into more video game titles, this opportunity can become a reality for many more gamers. For instance, through integrating truly unique NFTs that players perceive as valuable in-game assets, Axie Infinity has been able to turn otherwise average players into millionaires — some practically overnight — as well as improve the quality of life for many gamers in underserved communities from little else than letting them play a game they are passionate about.
In the example of Axie Infinity, but also that of My Crypto Heroes and CryptoKitties, the successful integration of NFTs into their gaming model as desirable digital assets establishes a two-way means of generating and earning value. First, the inclusion of NFTs as an emerging class of digital assets creates value by establishing a new model of in-game economics. Additionally, as those NFTs operating as in-game digital assets are inherently unique (and thus, rarer), their value only appreciates over time, granting players an additional means of earning value by selling or trading the NFTs they earn and acquire to others on the blockchain.
Knowing this, it ultimately falls to a game’s developer — or team of developers — to understand how the digital in-game assets they create and manage, including NFTs, can add value to their community of players on the blockchain. Players are not responsible for placing value in a particular game title or its in-game content as NFTs or assets; rather, developers need to consistently communicate with their community of players to know how they find NFTs valuable and how those assets are could be translated into in-game content. Failing to manage this could spell failure for the game in question, but doing so successfully could generate immense value for developers and players alike.
Final thoughts
Simply minting in-game content into digital assets like NFTs will not lead to a game’s eventual success. To successfully integrate NFTs into video games, developers must pay close attention to the wants and needs of their players (that is, their target consumer market) and deliver assets that meet those needs. While there are now several examples of games that have done this successfully, this process is likely to change as NFTs and the technologies used to create, integrate, and trade them evolve in the coming years.
