In 2021 the scene for non-fungible tokens (NFTs) experienced a veritable mania: Although they have actually existed for much longer, the past year was marked by a number of milestones that have significantly changed the public perception of NFTs – once seen only as “overpriced JPGs”. changed. In addition to the increasing financial importance, NFTs have potential mainly due to their remarkable technical attributes and their increasing importance in the creative industries. This also includes the gaming scene, in which creativity, economization and technological development are combined – and perhaps also a democratic spirit through the use of the growing crypto ecosystem.
Bread earning, but not a game for thoroughbred gamers: Axie Infinity
Crypto is already a solid player in the video game industry today, at least by the numbers. Currently there are around 400 active blockchain games, i.e. games based on blockchain technology. However, the spread remains limited to certain sub-areas of the market and is still met with skepticism within the scene. In most blockchain games – including the one released in 2021 DeFi Kingdoms and which is now worth more than four billion US dollars Axe Infinity by the Vietnamese developer Sky Mavis – are actually DeFi applications with which players earn in-game currencies for their achievements, which they can trade with other players or exchange for fiat money.
The Axie Infinity model has certainly revealed opportunities through its specially created microeconomy – in low-income countries such as the Philippines or Venezuela, gaming has become a profitable full-time job for some people – but the recent price fluctuations of the internal currencies AXS and SLP reveal several downsides . In addition, there are the facts that playing requires an initial investment due to the necessary purchase of a game character and, last but not least, also harbors the potential for addiction.
NFTs: First rejection within the gaming scene
Apart from these DeFi games, whose graphics are more on the level of game consoles such as the Nintendo 64 than on the contemporary triple-A title on the PC and modern consoles, crypto technologies have hardly found their way into video games. This is also due to the prevailing mood in large parts of the scene against the trend towards ever deeper profit maximization and monetization by game developers and publishers. Only recently, a wave of internal criticism from employees of gaming giant Ubisoft surfaced when it posted on a forum plans to introduce NFT trading in the franchise Ghost Recon disclosed. The Japanese company Square Enix also experienced similar reactions from its own community when company president Yosuke Matsuda spoke about plans to invest in the NFT and Metaverse technology spoke.
At this point in time, NFTs do not symbolize an interesting innovation for many gamers, but rather another instrument of the ongoing “through-capitalization” of the scene, which is already being poisoned by it – via microtransactions, loot boxes and more.
One ecosystem for everyone?
But crypto has potential for so much more: The gradual rise of Web3 and its potential for technical innovation represent major strides towards ecosystems of the future powered by peer to peer (P2P) trading enable financial and economic democratization and inclusion. In the gaming industry, these innovations could even lead to new value creation mechanisms that benefit gamers and developers replacing old ones.
An example are in-game transactions that players of regularly appearing game series – including the yearly relaunched one FIFAseries from developer Electronic Arts – available for real money purchase. The market for so-called packs alone, which are used to build your own team in the mode ultimate team serve, brought Electronic Arts in fiscal year 2021 1.3 billion euros in sales – and this despite the fact that the packs will be practically worthless for players with the release of the next part of FIFA. Since NFTs, as digital, unique certificates, can be linked to virtually all game objects, they could serve as a substitute for such in-game purchases – and thus be freely exchanged and traded between individual games and even people on secondary markets.
Developers and publishers who support this development could charge a small fee for each NFT transaction – and would thus have a motivation to maximize the quality of their game series and the associated ecosystems. In any case, such an adoption would not only depend on the will of the developers, but also on the favor of the gamer scene and their high demands – for them, crypto should offer a noticeable improvement and answer to sensitive points of criticism.