NFT Games as the Future of Gaming?

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Most of the cryptocurrencies are surging again, which is obviously considered a positive sign. It is usually during this “bull market” stages when new trends tend to emerge. This was seen in the 2013 bullmarket with emergence of hundreds of altcoins (and shitcoins), in the 2017 bullmarket with ICO and in the 2021 bullmarket with DeFi and NFT projects. While a lot of these still gain incredible traction and still increase in value, a new branch in the crypto industry is forming. And that is the combination of DeFi and NFT, which is seen mainly in NFT games, also known as GamFi.

What are NFTs?

Before we dive right into the NFT games, lets first spend at least a few sentences on what NFTs actually are. This branch of FinTech sector describes non-fungible tokens (hence NFT). In theory these are tokens that are representing anything that is more or less unique or limited and also cannot be easily replaced by something else. In practise however this is almost anything in the digital form from ID cards to useless jpegs (which are now a huge trend) (Clark , 2021).

The vast difference in what actually can constitute an NFT is a reason why there is also a vast difference in how people perceive it. Some believe that NFTs are one of the most crucial developments and use cases of cryptocurrencies and blockchain technology and that it should help with ownership rights or collectibles. Others however perceive this as nothing more than just another valueless hype that will eventually disappear when the next bear market comes.

The trend right now is clear. While in the year 2018 the estimated value of NFT assets was around 40 million dollars, last year this figure was at around 338 million dollars. Moreover, this year’s estimations point at a figure north of 1 billion dollars, which highlights the expansion stage in which this sector is. Therefore, no matter what the opinions on the NFT craze are, the market itself has now proven that it has to be taken seriously due to its growth. Several of its applications have already made an incredible impact in the whole industry, with NFT games being probably one of the most significant.

NFT games

While NFT games (GamFi) have flourished mainly in the past couple of weeks, the very first NFT game was probably CryptoKitties in 2017. At that time, the huge boom of this Ethereum based game saw a daily transaction volume of more than 50 000 transactions a day. Yet this game seems to be long forgotten, with daily transaction volume of less than 100. However, several new NFT games have emerged in the past weeks and months, proving that there definitely is a thirst for crypto-based games (Clark , 2021).

NFT blockchain games volumes play to earn
Transaction volume of CryptoKitties, Source: min.news

What is more interesting is the fact that most of these new games based on NFT are putting in place a relatively new business model which is play-to-earn (playing games to make money). This does not mean that all the players of NFT games must be professionals and e-sport players. On the contrary, most NFT games are based in such a way that everyone should be able to benefit from it at least marginally (Is Gamfi the next trend?, 2021).

This is thanks to the mentioned P2E model, which allows players to “earn money” through various in-game tokens or rewards. The goal of these tokens or rewards is usually to be used in the game, however, it also allows for public trading or selling. And this is where mostly NFT comes in place as well. Some of these rewards or tokens tend to be NFTs, which means that they are rather rare and therefore their value can be appreciated. Moreover, there are already many other ways players can benefit from the P2E model. These are a bit more traditional, like buying more valuable skins, weapons, tools, services and so on. In the world of NFTs, these can then be resold (if the bought item is limited), leading again to a profit for the player.

The world of NFT games definitely has some interesting options for anyone who wants to relax, play and potentially earn some money. Most popular games now are for instance Splinterlands, Lost Relics, Town Star, F1 Delta Time or Sorare. However, one of them seems to be much more popular than the others (Davis , 2021).

Axie Infinity as the pioneer

And that is Axie Infinity. Axie Infinity is a relatively new P2E game that is by many viewed as the most important of the NFT games. And that is for a reason. Axie Infinity has the biggest NFT collection in this sphere with the value of sales up to 42 million dollars only in June 2021. Only by looking at this number one can see that Axie Infinity is an extremely popular NFT game and is also viewed as a pioneer of this sector.

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Axie Infinity as the pioneer

And that is Axie Infinity. Axie Infinity is a relatively new P2E game that is by many viewed as the most important of the NFT games. And that is for a reason. Axie Infinity has the biggest NFT collection in this sphere with the value of sales up to 42 million dollars only in June 2021. Only by looking at this number one can see that Axie Infinity is an extremely popular NFT game and is also viewed as a pioneer of this sector.  

We have also looked more closely on this project in this article.

The game was released in 2018, and now has more than 58 000 daily users (which is 10x the number that was seen in October 2020). The AXS token, which is the main way of earning money, was only released in November 2020, which clearly shows how the growth of this game was supported by inclusion of the monetary attribute to this business model (Axie Infinity, 2021).

The accumulated in-game revenue is around 7 000 ETH. The game itself offers various options how the players can earn money. These are for instance completion of daily tasks, PvP or PvC fights, sales of land or equipment or earning potions that can help with breeding of “Axies” (axolotl-like creatures) that can be traded or sold.

This game has earned a lot of attention mainly in poorer countries, where people claim they can earn more by playing this NFT based game than is the minimum wage. This also portrays the potential of the NFT games and their value for the players, which can be easily overlooked by people, who are not following this trend closely.

Where does this lead?

As was portrayed in the beginning, while some believe that NFTs and therefore NFT games are just another useless craze, others really see potential in this new development step in the gaming world. For instance, Yat Siu, Chairman of Animoca Brands, which is a parent company of such studios as The Sandbox or Nway, has stated the following:

“If you can play for something that is valuable to you, then why would you choose to play in a game where there is no value. We are not saying traditional games will go away. But we do believe in this thesis that it is better for the player to play in an environment when you have some ownership.”

This statement probably shows the best the potential of the NFT gaming. While it is uncertain in what direction the market will progress, the gaming industry is on its rise, which could also mean a huge untapped potential for NFT games. 

Reference

Clark , M. (2021, 8 18). NFTs, explained. Retrieved from The Verge: https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq

Is Gamfi the next trend? (2021, 8 22). Retrieved from Min News: https://min.news/en/game/b0da1a57782c356ce379c8d17b3e229f.html

Davis , G. (2021, 8 1). Top 5 NFT Games You Can Play To Earn $100 a Day: ‘Splinterlands,’ ‘Lost Relics,’ and MORE. Retrieved from Tech Times: https://www.techtimes.com/articles/263628/20210801/top-5-nft-games-play-earn-100-day-splinterlands-lost.htm

Axie Infinity. (2021, 8 12). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Axie_Infinity