Are NFTs The Future Of The Gaming Industry?

While NFTs (non-fungible tokens) have been around since the early 2010s, they have only truly entered the spotlight in recent years. Blockchain adopters have flocked to the NFT world, snapping up and claiming ownership of digital artwork, virtual land, collectibles, music and more - all in the form of NFTs.

With so much interest surrounding the concept, it’s only natural that enthusiasts will push the functionality of the technology further and further. This is how we’ve seen NFTs enter the gaming space. NFTs have helped to alter the gaming world as we know it, giving alternative functionality to traditional games.

But this begs the question, are NFTs really the future of the gaming industry? In this article, we will cover the role that NFTs play in gaming and what it means for the industry's future.

Traditional games: Money well spent?

Historically, gamers would have to pay an upfront cost or subscribe to various platforms in order to play their favourite games. This type of game is called pay-to-play.

If users want to excel at the game and reap all the glory and bragging rights, it is likely that they would need to level up their avatars and get their hands on additional items. But unless the player was willing to put years of hard work into it, they might need to drop a bit of extra cash to take advantage of premium weapons, abilities and alternative aesthetics. Some call games like this, pay-to-win, and refer to these purchases as microtransactions.

But what happens to that money once the gamer decides to stop playing? Well, in traditional pay-to-play and pay-to-win games, the money remains in the game, never to be seen again. Your in-game assets will still remain, but unfortunately, there is no way to recoup the costs or resell the items.

NFTs: Revolutionising in-game assets

Since blockchain and NFT technology seeped into the gaming sector, gamers have been able to combine their love for gaming with further investment and earning opportunities.

When making an in-game purchase within an NFT game, your items are not locked to your avatar and therefore rendered useless once you no longer want the item or decide to leave the game altogether. Instead, blockchain and NFT technology has made it possible to sell your in-game items to another interested party. This means that users can potentially recoup the entire cost of their initial investment, or in some circumstances make money from them.

Gamers may list their items on platforms such as CoinSpot or inhouse marketplaces within the game itself and then transfer the ownership in exchange for cryptocurrency or NFT tokens. The exact NFT token required will depend on the platform on which they perform the trade. For example, Axie Infinity uses the token AXS, Decentraland uses MANA both of which can be found on CoinSpot as well as over 370+ other coins.

They play to earn

NFTs have not only revolutionised gaming with the ability to sell in-game purchases and skins, but they’ve also inspired a brand new gaming format - play-to-earn.

The concept of play-to-earn games has added a whole new dimension to gaming as we once knew it. Not only can NFT games be used for entertainment purposes, but they can also be leveraged as an income stream. That’s right, NFTs have made it possible to get paid for playing games, and not through sponsorship deals or online clout either. Play-to-earn games give users the opportunity to earn in-game assets or tokens simply by playing the game and interacting with the game's ecosystem. Players that perform particularly well in the game may even be rewarded more handsomely due to their extreme skill and dedication.

Play-to-earn games not only revolutionised the gaming industry because of the monetary compensation, but also because of the shift in mindset around gaming. Gaming used to only be considered a leisure activity, something to be enjoyed as a casual hobby. But the play-to-earn concept has shown that gaming can be so much more than that, it can be someone’s livelihood. Why shouldn’t someone turn their hobby and skills into a job?

People in developing countries all around the world play NFT games as a means to earn a living wage that far surpasses the average salary in their country. This technology has given them the opportunity to support their families and communities in ways they never thought possible.

As time goes on, it's evident that NFTs will continue revolutionising many industries, especially gaming. They are doing exactly what cryptocurrency did to finance - taking the power and gain away from centralised authorities and redistributing it back throughout the community.