Are NFTs The Future Of Gaming Finance?
Non-Fungible Tokens (NFTs) caused something of a stir when they were first launched, with media coverage of digital art and even memes selling for millions of dollars or more.
Although the initial swell of public interest has died down, leading to something of a lull in the NFT marketplace, there are real-world NFT use cases that have emerged. They do still hold value as tradeable, non-fungible assets, but individuals and companies have found unique ways in which to leverage their capabilities.
NFTs In iGaming
iGaming has not been slow to embrace cryptocurrency and blockchain technologies. Many iGaming websites accept crypto payments, and the likes of Bitcoin and Ethereum have become popular payment options with players thanks to the privacy, anonymity, and security that the payment method offers.
Crypto also offers fast, inexpensive deposits and withdrawals and to encourage players to deposit using this method, casinos offer first deposit and welcome bonuses, as well as instant casino cashback offers and other loyalty rewards.
Casinos have long offered loyalty schemes and VIP rewards or programs to their high rollers. These schemes encourage players to come back and can increase the amount of money wagered on the site. Likewise, cashback programmes allow gamblers who haven’t been successful to try again with a percentage of their losses back.
As well as bonuses like free spins, some casinos have used elements of gamification, such as the awarding of badges or tables of player’s performances. With NFTs, casinos can offer more meaningful bonuses: rewards that can be taken away from the site or potentially even taken from one site to another.
NFTs In Gaming
However, while there is potential for the use of NFTs in iGaming, it is in video and online gaming where NFTs are already finding purpose.
An NFT can be any digital file or digital item. Memes, audio files, and pieces of digital art are commonly turned into NFTs, but they really can be any digital item or piece of data. This includes everything from player accounts to in-game assets like skins and weapons.
Player Avatars
In traditional gaming, player accounts are still owned by the gaming company. If the player decides to stop playing or close their account, that’s it. It may even go against the terms and conditions of the game to sell or trade accounts.
Using NFTs, it would be possible for a player to set up their own avatar and then use this avatar on every game and every account that is compatible. This means that gamers would be able to accrue experience over multiple games, or potentially even sell the account they spent thousands of hours working on.
Accountability
NFTs are registered on the blockchain network. While records do not include personal details, players can link their gamertags or personal details to an account.
The records stored as part of that account are immutable, which means they can’t be changed or deleted. This would make account hacking and the inflation or exaggeration of stats and performance impossible. While this might not matter too much in games between friends, it could prove very useful in online matchmaking and certainly in eSports tournaments.
Tradeable
It isn’t just accounts that could be turned into NFTs, either. In fact, virtually every element of a game world could be. While most of those assets will remain with the game’s creators, player-owned items will be assigned to the players themselves. The vehicle you’ve spent months upgrading in the latest online racing game would be yours. The sword that you’ve spent hundreds of hours mining rare materials for would be yours.
Not only does this bring bragging rights, but because NFTs can be traded on open marketplaces, it would enable players to financially benefit from their hard work and time plowed into games.
Collectibles
Gamification has been implemented in video games for a long time. Achievements on consoles, Windows, and even Steam have proven popular with players, especially those who want to 100% games. But, once these achievements are collected, there isn’t much that can be done with them.
Using NFTs, publishers could offer unique badges, rewards, and collectibles that will not only be coveted by gamers but could generate a market.
Transferable
Every NFT could be tradable. Ownership of the NFTs could be verified on blockchain to ensure that sales and purchases are legitimate and they could be transferred between players.
But, they could also be transferred between games. Player skins could be taken from one game to another, and, in the future, it may be possible to transfer items from one game to another platform. If players know they can take their items across the game, they may be even more inclined to buy in-game items. In-game purchases already account for approximately $126 billion of sales per year, with half of this going on purely cosmetic items.
Play To Earn Games
Play to earn isn’t a new concept but it is almost the antipathy of the standard gaming model where plays pay to play. With play to earn, as players spend time in a game, level up their characters, beat certain levels, or perform other required tasks, they are rewarded with in-game items or in-game currency.
Using NFTs means that players can earn actual assets that have transferrable value. This could prove especially popular in games that have strong followings and attract players to spend more time in games.
Conclusion
The first NFT, called Quantum, was created in May 2014. In June 2021, it sold for more than a million dollars. However, that figure is dwarfed by the $91.8 million that The Merge by Pak sold in December 2021, during the height of the NFT market’s rise.
Although such high prices are becoming less likely, NFTs do have a place and innovators are finding new and unique ways to use them. Buyers can invest in meme NFTs, while sports stars and teams sell limited edition NFTs commemorating their achievements. They are already being used as games, in collectible and trading games, and are likely to become even more prominent in this field in the future.