Gaming is not what it used to be.
An industry that used to be associated with a small percentage of the population limited to the stereotype of basement-dwellers and nerds has now become one of the biggest industries in the world.
With data suggesting that over 50.6 million gamers are actually over 50 years old, old stereotypes and misconceptions about gaming are constantly being reevaluated.
A 2021 report suggested that the COVID19 pandemic had allowed video games to become a bigger industry than movies and North American sports combined.
Since then, the industry has continued to grow as new players continue to the ecosystem as eSports, virtual reality, and the metaverse captivate the imagination of millions.
The incredible success in gaming over the past decades has gone beyond its popularity, also becoming a major catalyst for technological innovation.
Innovation in hardware, Artificial Intelligence, Virtual Reality, Augmented reality, and cloud computing is only some of the aftereffects of game developers constantly pushing the limits of their trade.
Now, gaming is also becoming one of the most important applications of blockchain technology, especially when it comes to Non-Fungible Tokens (NFTs).
NFTs and Gaming
Over the past 2 years, NFTs have become increasingly relevant in the blockchain space as developers find new use cases for them and collectors rush to invest in them.
Authentication, supply chain management, art, identification, real estate, and gaming are only some of the ways in which NFTs are now being used. But what is an NFT?
An NFT is a digital asset created using blockchain technology. In the same way as cryptocurrency, NFTs can be traded using blockchain networks, which provide them with all of the benefits this entails, including immutability, security, transparency, and much more.
However, unlike cryptocurrencies, every NFT is unique in its own way, which allows it to represent much more than its fungible counterpart.
This unique trait means that while an NFT might be traded for a similar NFT, they both will differ in some way, for example, an ID or transaction history. The same thing happens in the world of art, with copies of certain works being able to coexist but being valued and appreciated differently.
When you take this to the digital world, the result is an increased capacity to create complex ecosystems and projects that benefit from decentralized systems.
Digital Assets are Here to Stay
With gaming becoming increasingly popular and complex, their reliance on digital assets has also increased.
Even those who are not gamers themselves are aware that most games allow players to acquire in-game items, compete with each other, and gain rewards for their achievements.
Platforms like Steam, PlayStation, Xbox, and the Nintendo Switch have further increased the reliance on such assets by adding a social aspect to them.
Unfortunately, ownership over those assets is an illusion more often than not. Players will find that their interaction with those assets is often limited to the game or platform itself, meaning they can’t use them in other games or trade them with their peers.
Little Middle Ground
Even when in-game marketplaces exist, Anti Real Money Trading policies prevent them from capitalizing on them for monetary gains.
The situation gets even worse as the developer has the power to take those assets away from players for any reason it deems necessary. If the item is too powerful or obsolete, they can remove it, for example.
However, more often than not, assets become inaccessible due to games going out of business or the developer deciding to ban a player. In such instances, all the effort made to gain them is lost and players can’t do anything about it.
NFTs Are Something New
NFTs present a unique opportunity to change this reality by bringing true ownership over the assets. Once an item is acquired, the asset is linked to the player’s wallet and as such, he is the only one able to decide over them.
Sure, the developer can choose how the asset can be used in their digital world but can’t affect the asset itself. This also means that gamers will be able to trade their NFTs freely outside the game itself, allowing them to benefit financially from their skill and gaming activity.
Developers can also benefit greatly from using NFTs. Not only do NFTs come with the necessary features to generate more revenue in the form of royalties or transaction fees but it also allows them to add interesting features to their assets.
An example of this is loot boxes, which when combined with NFT and blockchain oracles would allow for more complex rewards for players with increased transparency.
Enter the Metaverse
Over the past year, giants ranging from Meta (formerly known as Facebook) to Epic Games have been talking about the metaverse. This idea of an open world with a complex economy and capabilities that mirror the real world has captivated billions of people.
If you have ever watched “Ready Player One”, “Minority Report”, “Sword Art Online”, or even “The Matrix”, you are familiar with this idea.
While most headlines regarding the metaverse have been generated when tech giants make a move, blockchain-based projects are also racing to become the next big thing.
The Sandbox, Gala, Axie Infinity, and Decentraland are only some of the names in the blockchain space that chose to focus on creating the go-to metaverse. What do they all have in common? They are based in gaming.
Gaming has always been about the creation of new worlds, no matter if those fall under the realm of fantasy, science fiction, history, or any other genre.
Games like World of Warcraft, Final Fantasy, Runescape, and others have strived to bring as much flexibility as possible to their players. As such, it is not surprising that most gamers are closely familiar with the idea of the metaverse, all while game developers drive the efforts to develop it.
At this time, projects like The Sandbox and Decentraland have already made a name for themselves as some of the leaders in the race to the metaverse.
Popular blockchain games like Axie Infinity also strive to join the race, launching features like real state and social connections in a push to do so.
Growing the Online World
With the Metaverse requiring an open and complex economy, crypto and NFTs have become a major tool to facilitate the creation of such a system.
By bringing true ownership and security to all transactions in the metaverse, users will be able to enjoy an experience more consistent with real life, which is the true objective of the Metaverse.
NFTs are already being used in the decentralized Metaverse to represent native assets, memberships, art collections, and virtual land. With time, these use cases are only likely to expand not only as blockchain becomes more mainstream but also more powerful.
A Q1 report published by the Blockchain Game Alliance and DappRadar showed that blockchain games raised $2.5 billion during the first quarter of this year. This represents a growth in investment activity of over 2,000% already, which was expected to expand to the rest of the year.
With investors continuing to monitor the growth of the blockchain gaming ecosystem, developers have more possibilities than ever to start projects around the metaverse. This virtuous cycle is likely to result in more top talent joining the blockchain gaming industry.
The Future of Gaming is Decentralized
The gaming industry has been facing a big problem over the past decade: player dissatisfaction. From loot boxing controversy to the recycling of game titles, gaming giants like EA Games have made a name for themselves as the enemy.
Multiple sabotage campaigns have taken place as a result, pushing these studios to revert controversial decisions on more than one occasion.
The increasing relevance of the free-to-play model has also resulted in game studios and developers looking for new options to monetize their games.
While tools like Loot Boxes and game passes have allowed them to do so, gamers are not particularly fond of being bombarded with calls to buy them.
Fortunately, blockchain has offered a new alternative to developers and gamers alike: Play-to-earn. Championed by games like Axie Infinity, Splinterlands, Alien Worlds, and Crazy Defense Heroes, this model has allowed players to benefit financially from their effort and expertise, all while allowing both parties to work together for the betterment of the games.
A report by Newzoo suggests that 2022 will see the P2E model gain traction quickly, especially by making it easier for eSports organizations and enthusiasts to run their own leagues.
The report also suggests that Apple and Google’s progressive opening of their app store ecosystems will further favor the adoption of P2E games in the mobile market.
While hardcore gamers have not been big fans of the introduction of NFTs and metaverse-related features in their favorite titles, there is a clear motivation for developers to do so.
At this time, the main barrier preventing the adoption of these technologies can be easily surpassed via education efforts, especially at a time when the NFT craze has slowed down, decreasing in turn speculation around NFTs.
NFTs and the metaverse represent the next step in the evolution of gaming in more than one way. Now, it’s just a matter of time for developers and educators to level up their skills and help gamers around the world understand their benefits. Only time will tell if they succeed.