How NFTs Will Impact the Video Game Market in 2022
12/01/2022 Written by The Game Marketer
By now we are sure you will have heard people talking about NFTs. Some believe that NFTs are a fad that will pass by in a matter of years, whilst others believe that NFTs are here to stay. Either way NFTs are a big topic of interest right now, and nowhere is this more prominent than in the gaming industry.
What is an NFT?
In short, NFTs, or Non-Fungible Tokes, are units of data that are stored on a digital ledger (or blockchain), which can be sold and traded. The difference between NFTs and Cryptocurrencies such at Bitcoin and Ethereum is that NFTs are not mutually interchangeable, in that each NFT is unique and holds a unique value, whereas cryptocurrencies are mutually interchangeable, so, 1 Bitcoin will be the same value as another Bitcoin.
NFTs in Gaming and ‘Play to Earn’
There are other aspects to NFTs that make them interesting thanks to the nature of blockchain technology, like the concept of assigning a kickback from every sale – wherein a percentage of all future sales would go to the original seller - and that you can assign governance protocols to NFTs – like giving original buyers of the NFT the power to make a decision that will impact the game, like voting to decide on an upcoming item release. These aspects make NFTs a very interesting prospect for the gaming industry.
The idea of limiting the amount of an in-game item that are available make that item more valuable and sought after could mean increased interest in in-game updates and item releases. By making these items tradeable that then opens up the prospect of players being able to sell and make money from in-game items – bringing us closer to the concept of ‘play to earn’.
‘Play to earn’ is a relatively new concept in gaming and revolves around the fairly simple concept of players being able to make real money from playing games. NFTs would be a prime example of how developers can make the games ‘play to earn games’. Releasing a set number of tradeable in-game items and then allowing players to buy and sell these items on a marketplace would mean that players would be able to make money from playing your game and add a brand-new dynamic to the gaming experience. There are some games that are following this model already, for example Vietnamese game studio Sky Mavis’ Axie Infinity.
Axie Infinity allows players to complete in-game challenges to earn items that can then be traded on their marketplace. This has allowed some of its players to earn good money from playing the game and trading the items they receive. It is a business model that has worked for them and saw their average monthly users grow from 612k average monthly players in December 2020 to 2.5million average monthly players in December 2021.
What to Expect in 2022
Whatever your opinion on NFTs in video games, it seems that they are here to stay for the time being, so in 2022 we can expect more and more games to turn to NFTs to introduce ‘play to earn’ aspects within their games. Ubisoft have become one of the first major companies to foray into the world of NFTs within their games, as they released a set of NFTs within their military ghost shooter Ghost Recon Breakpoint in December 2021 and with major companies like EA and Square Enix making major investments into blockchain technology in recent months we can certainly expect more and more major companies to dip their toes in to the NFT market.
Whilst there has been some backlash from players who say they do not want NFTs to become part of their gaming life, others who are excited at the prospect of owning their own gaming NFTs and entering into the world of ‘play to earn’. We can expect NFTs to continue to be a hot topic in the gaming world in 2022 and beyond, so, whether you are for or against NFTs in video games, you can certainly expect to see a lot more projects and ideas popping up this year.
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