The integration of NFTs into video games is still in its infancy, and there is great potential for positive change, says Jonathan Schemoul, CEO of Aleph.im.
In late 2021, Ubisoft became the first major gaming company to announce the integration of gaming NFTs. These tokens called “Digits” were launched in beta for the computer version of the game “Tom Clancy’s Ghost Recon: Breakpoint”. Since then, gamers have been able to purchase NFTs of unique items such as helmets, pants and guns, and then use them within the game. In collaboration with Aleph.im, Ubisoft has also been working on integrating NFTs into console games.
Why are some gamers rejecting NFTs?
Reactions to this announcement were swift and some were very negative. Many gamers fear that the integration of NFTs will lead to a price hike for game elements and the creation of a “pay-to-win” environment. Others are afraid that the use of NFTs will lead to further centralization and give the market monopoly to large companies.
These concerns are not unjustified, however. A few years ago, when companies tried to integrate more microtransactions and other paid features into their games, they did not take into account the needs of gamers. As a result, many gamers felt left behind and even overwhelmed by the rapidly changing video game industry.
Some studios such as Team17 even abandoned their game NFT projects after receiving negative feedback from employees and gamers, while Ubisoft received strong criticism.
The benefits of integrating NFTs into video games
It is important to keep in mind, however, that the integration of NFTs into video games is still in its infancy and that there is great potential for positive change. For example, the use of NFTs could give players ownership and the ability to transfer their game assets. It could also give them more control over their gaming experience and strengthen their relationships with the gaming communities to which they belong.
Let’s assume, for example, that virtual item trading in video games is a huge $50 billion industry. If we could take a large portion of that amount and redistribute it to gamers, we could profoundly change the way we view video games and their value. Game items could become more than just little digital props; they could become real assets, with real value.
Game NFTs can solve some problems
It’s also worth noting that NFTs could help solve some of the video game industry’s most pressing problems, including the scarcity of secondary markets for game assets and concerns about microtransactions. For example, if developers integrate NFTs into their games, they could create a more direct link between the value of game elements and the game itself. This would further encourage users to play and support developers, while providing a more transparent and fair secondary market for game assets.
Indeed, the integration of NFTs into video games can result in a fairer and more sustainable industry for all involved. On the one hand, gamers will have more control over their gaming experiences and be directly compensated for their time and effort. On the other hand, developers will have a new tool to create more engaging and rewarding games, while generating more revenue to reinvest in their projects. Finally, the industry will be able to offer a more level playing field, where the value of virtual assets is more closely tied to the game itself.
In addition, the use of game NFTs could help decentralize the gaming industry, giving smaller developers a chance to enter the market. This will create more competition and more affordable prices for gamers.
The future of NFT games
In the movie Ready Player One, Ernest Cline tells the story of a world where the only escape from the dark reality is the virtual world OASIS. In this world, people can be whoever they want and do whatever they want. OASIS is indeed a place where people take ownership of their virtual personalities, and shaped by the interactions between users.
It may sound like science fiction, but it’s not that far from reality. The integration of NFTs into video games indeed has the potential to create a similar world, where players have true ownership of their game assets and the ability to shape the game environment to their liking.
The adoption of non-fungible tokens is still in its infancy. However, there is already a burgeoning ecosystem of projects and platforms exploring this new technology. For example, Decentraland is a virtual world based on the Ethereum blockchain, within which users can buy, sell or trade NFTs of virtual land. More than $500 million worth of “virtual real estate” has been sold by projects similar to Decentraland.
Other projects are also testing different ways to use NFTs in video games. For example, The Sandbox is a content creation platform that allows its users to monetize their 3D voxel creations by turning them into NFTs.
Creating more value with dynamic NFTs
Dynamic NFTs are a relatively new and innovative concept that increases the utility of NFTs within games. These new non-fungible tokens allow the attributes (i.e., the metadata of the NFT) to change and evolve based on player activity. As a result, they offer a level of customization and evolution that traditional NFTs simply can’t compete with. Aleph.im was the first company to integrate dynamic NFTs into mainstream games. That said, other projects like Chainlink are also doing groundbreaking work in the dNFT segment.
With Aleph.im’s technology, NFT metadata transfers from one player to another. Thus, users can get information about gamers who previously owned their NFTs. This builds community and creates a connection that would not be possible with traditional NFTs. In addition, Chainlink allows dynamic NFTs that connect to oracles to extract data from the real world.
NFTs in Gaming: Conclusion
The benefits of using NFTs in video games and virtual worlds are well documented. As the technology matures and new projects emerge, we will likely see even more innovative uses of NFTs in gaming.
So what does the future hold for gaming NFTs? It’s hard to say, but there are reasons to be optimistic. The benefits of non-fungible tokens are clear, and there is already a booming ecosystem of projects exploring different ways to use them. As more and more people begin to understand and embrace this new technology, we will likely see even more amazing use cases for NFTs in gaming and many other areas.