Cryptocurrency has become a global phenomenon for new-age investors. It is one of the most lucrative investment options that has generated quick wealth for many young investors, associated with high risks.
As crypto continues to grow its popularity in the world, many industries are incorporating the new-age technologies into their core offerings, and online gaming is one such industry. It has become a breeding ground for gaming developers to leverage the capabilities of cryptocurrency and get into NFT gaming.
Non-Fungible Tokens (NFT) - unique cryptographic assets existing on Blockchain are new yet unique in the digital space. It transforms the way people recognise and register the ownership of assets.
NFTs started gaining attention in the world of art, music and trading cards. Quite rapidly, online gaming based on Blockchain technology started capitalising on the potential of NFTs.
According to recent stats - NFT projects in art and gaming were worth several US million dollars in 2020 which is much lower than the worth in 2021. The unique digital tokens are gradually transforming the gaming industry.
Source of income
Traditionally, the gaming formats were based on free-to-play, play-to-win and pay-to-play models where the purchased items and paid upgrades in the game offered no real-economic return.
With the integration of Blockchain technologies, developers started to monetise the games in the most disruptive ways offering users an opportunity to gain financial returns for their gaming skills and time invested.
Gaming developers emphasise monetising the game in two ways - trading NFTs or earning in-game rewards or cryptocurrencies. Instead of making a purchase that does not guarantee any economic return to players, they invest in NFT characters.
These tokens can be further sold to other players or on cryptocurrency marketplaces to create an internal economy.
The emergence of play-to-earn model
This gaming model is the most recent development in the gaming industry. It embraces modern technology while providing financial benefits to all players in the online gaming world.
The developers of the play-to-earn model provide ownership of in-game digital assets i.e. NFTs to players, allowing them to increase their value.
From cryptocurrencies to in-game resources that can be tokenised on Blockchain platforms provides an opportunity for players to get economic rewards.
Though play-to-earn gaming models are new to the digital gaming space, they rely on the success of NFT trading and its demand as digital assets. It works as a win-win for gaming developers to get more players, on the other hand, new players can start earning themselves.
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Sense of ownership
In the online gaming world, digital collectibles are known to be around for quite some time now. In traditional gaming formats, in-game purchases remain locked up in the game because of their non-transferable nature.
However, incorporating NFTs in the gaming environment provides a sense of asset ownership to players that allows them to unlock their digital collectibles in the real world.
These in-game digital assets can be used by players to sell them for real cash or transfer them to other players in the game for their economic benefit.
Apart from this, many new-age gaming marketplaces that are based on blockchain allow the player to own NFTs with a small financial stake in the game's decision-making.
Earlier, the online games that were not based on Blockchain technology, tracking true ownership of assets was not possible. As a result, online gamers were left to spend their hours playing games and never get anything in return.
However, the new play-to-earn gaming models are decentralised in nature that publicly runs digital assets on blockchain platforms. This makes NFTs immutable in which the ownership of in-game assets or digital collectibles is less likely to wipe out as compared to a centralised server.
In simple terms, NFTs exist independently and stay on blockchain technology. Even if a game shuts down, any purchases made in the game can be bought and sold on the existing blockchain protocols. These assets cannot be duplicated or lost, since they have their own records on blockchain.
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Cryptocurrencies are divisible. They can be divided into smaller units and act as a medium of exchange. However, NFTs are indivisible as they can only be bought, sold and saved as one unit.
In the gaming world, NFTs provide a strong base for building healthier and expansive secondary markets for in-game digital assets.
NFTs are proving to transform the online gaming world by providing them a revenue model where players can resell their purchased assets, making a high-value game in the market.
NFTs in gaming are still at a nascent stage. There is a lot of revolutionary progress being made in terms of new games being introduced and their capabilities being upgraded using blockchain technology for NFTs.
Considering their benefits for players as well as gaming developers, NFTs are expected to be a long-term phenomenon.
Furthermore, by making them publicly available on various interoperable blockchain platforms, NFTs become more beneficial in terms of adding value and sustainability to the income of gamers.
(The author is CEO, OneTo11.)
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