Gaming is a multibillion-dollar business traditionally dominated by megacorporations such as Atari, Sony, Microsoft, and Nintendo.
These large corporations have strived to deliver exciting gaming experiences throughout their history to attract new players and expand their market share.
Non-fungible tokens, on the other hand, are seeking to provide gamers with a financial incentive for playing games in the form of NFTs, as well as a compelling gaming ecology.
These games, often known as play-to-earn (P2E) games, are set in a Metaverse, which is a fictional realm. Users of the platform are paid monetarily for their time and effort in the game under the P2E gaming paradigm. As a result, according to Newzoo, the model has a chance to capture a piece of the $175.8 billion global gaming market, which is expected to expand to more than $200 billion by 2024.
Minh Doan, the co-founder of Warena, a personalized NFT game, explained the significance of this model. He stated:
“Today, we refer to the blockchain as a play-to-earn approach.” Because players acquire tokens that can grow in value by tens or even hundreds of times during games, GameFi — the mix of decentralized finance with game mechanics — has become a real market sensation.”
In terms of users and volumes, the protocols in the NFT gaming sub-sector have been getting a lot of traction. Their accompanying native tokens have also done exceptionally well. Axie Infinity (AXS), the native token of the Ethereum-based NFT game, has been leading the drive for the sub-sector. In the last 90 days, the token has gained 83.35 percent, 706 percent in the previous 180 days, and almost 73,000 percent in the last year.
According to CoinMarketCap data, AXS is presently trading in the $120 level and has grown to become one of the top 25 cryptocurrencies in terms of market value, making it the first NFT gaming-related token to make the cut. Since its launch, the site has seen significant growth in terms of both users and volume. According to Dappradar, the platform has seen trading activity worth $2.6 billion, with 836,149 traders taking part. In addition, a staking program for the platform’s native token has also been introduced.
Alex Salnikov, co-founder and head of product at Rarible, an NFT marketplace, elaborated on the factors contributing to the rise of NFT gaming platforms in terms of both volume and users. He stated,
“This rise is in line with the larger acceleration of the NFT business, and it appears to illustrate the breadth of NFT applications.” In addition, gamification has been popular in the crypto world, and it fits in particularly well with the concept of NFTs, which are so tightly linked to participatory and enjoyable community engagement experiences.”
He also stated that the value proposition of blockchain technology is intuitive and natural for the gaming business, citing P2P experiences and in-game assets with transparent provenance as examples.
The number of NFT gaming platforms is increasing
Even though Ethereum is the most widely used blockchain network for the deployment of decentralized applications (DApps), other blockchain networks in the NFT gaming ecosystem, such as Binance Smart Chain (BSC), Polygon, Hive, Harmony, Solana, and Flow, are gaining large user bases and growing volumes.
“Polygon is usually considered one of the leading blockchains for gaming due to its EVM compatibility, high throughput, and low gas prices,” Salnikov continued. It’s also Ethereum’s leading sidechain, which means it’s linked to the main NFT ecosystem on layer one.”
Jesse Reich, co-founder, and CEO of Splinterlands, one of the most popular NFT gaming platforms in terms of users, spoke about the protocol’s decision to develop their game on the Hive network. He stated:
“People have thought our choice of Hive has been bizarre since the early days, but it has a freemium structure. Players can sign up with a username and password and get started. It’s hard to replicate that on POW blockchains with gas fees.”
Binance launched a $1 billion accelerator fund for the BSC ecosystem’s general development on Oct. 12. Popular BSC games like MOBOX: NFT Farmer, Faraland, ZOO Crypto World, and CryptoBlades will undoubtedly flourish due to this money, resulting in widespread network adoption.
Despite the increase shown across many platforms and networks in the NFT gaming sub-sector, the long-term viability of these games may be in doubt, as traditional gamers are accustomed to playing exceptionally well-designed games. These games also have excellent gaming ecosystems, thanks to the bulk of them being backed by large firms with significant resources and development infrastructure.
This cannot be true of games that reward users with NFTs, native tokens, and other incentives at this time because they are still in the early stages of development and hence are not as complex. As a result, it’s critical to assess how much time and effort users of these platforms put in to gain these incentives on games that may or may not be as engaging as conventional games that are also reasonably accessible to acquire.
“First and foremost, there has to be a game that is fun to be a mega-hit,” Reich continued. “I’m sure grind-to-earn, like play-to-earn, will be a thing, and it’ll come down to what minimal salary someone is willing to accept for computer click job.”
These games, according to Doan, are an entirely new generation of games that are difficult to compare to standard PC games. He stated:
“This is similar to a leisure economy, in which users are paid to play games and can then compound their earnings like real traders. The beauty of NFT games is that they are designed for young people, who are the primary target audience. They comprehend trends and technological details that other users may find difficult to grasp.”
Blockchain gaming has several challenges
Despite the fast-growing NFT gaming ecosystem, established gaming behemoths have yet to incorporate blockchain technology or NFT integrations into their existing titles. Indeed, a couple of them have flatly denied the possibility.
Valve recently announced the withdrawal of blockchain games from its Steam platform, as well as a request that users do not upload anything connected to cryptocurrencies or non-fungible tokens. Nevertheless, thousands of titles, including Counter-Strike, Battlefield, Halo, and Resident Evil, are available on the Steam store.
The company dabbled in crypto in 2016, announcing that it would take Bitcoin payments, but quickly ended the service due to high fees and volatility.
Following the ban, Epic Games’ CEO, Tim Sweeney, stated that his firm is willing to host and promote games that employ cryptocurrency and blockchain-based assets.
Epic Games, the company behind the massively popular Fortnite, has stated that developers will not take bitcoins through the platform payment service. They will have to develop their payment methods instead. Without this infrastructure, this might constitute a barrier to game uptake and inclusiveness.
Valve’s perception extends to game industry authorities as well. For example, the Gambling Commission of the United Kingdom launched an investigation into Sorare, one of the most popular NFT fantasy soccer games, on Oct. 14. The gambling watchdog is determining whether the site requires a license and whether its services are considered gambling.
Sorare has said unequivocally that it does not “provide any types of regulated gambling,” despite its willingness to participate in an open discourse and interact with regulatory organizations to explain its game. The platform is worth more than $4.3 billion and is rapidly expanding.
Because the entire ecosystem is still in its infancy, it appears to be more of a waiting game to discover the true potential, utility, and long-term implications of integrating crypto, blockchain, and NFTs into gaming environments.
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