The NFT hype has made many rich. In the Philippines, the NFT game Axie Infinity has even triggered a crypto boom. With thousands becoming unemployed by the coronavirus pandemic, many Filipinos have started playing blockchain games to keep themselves afloat. But there are also negative reactions to NFTs. There has been harsh criticism, especially from the Western gaming world.
For example, when game developer Ubisoft announced in November last year that it would integrate NFTs into its games, YouTube, Reddit and Co. flooded with a stream of rejections. A look at the NFT trading platform Rarible also shows that the NFT collection from Ubisoft was only sold 35 times throughout the month of February 2022 – a sign of the gaming community’s low interest in NFTs.
Many gamers seem to think that NFTs are just another way for publishers to make money fast – at their own expense.
What bothers players at NFTs?
It is precisely this increasing commercialization of their favorite hobby that is the gaming community’s main concern for NFTs. Are non-fungible tokens in the gaming sector really just the further development of EA and Co.’s greed for profit, which began with microtransactions and loot boxes? What really distinguishes so-called play-and-earn games like Axie Infinity, Splinterlands or Thetan Arena from traditional games like World of Warcraft, Minecraft or Call of Duty?
The opposite side argues that unlike traditional games, where the amount of money and items in the game are under the control of the developers, games based on blockchain technology allow players to create their own assets, own them fully and freely use them at all times trade between the crypto and fiat worlds on their own terms.
The benefits of play-to-earn and NFTs in play
These are precisely the reasons why blockchain could herald a new era of gaming, they say. Games would evolve away from a centrally planned “do what we let you do” economy into a “everything can be traded with any, anytime” capitalist economy. For avid gamers, this would mean that they could be rewarded for their time and effort, for example, by selling or lending rare items to other players who have less time invested in a game.
Everything would be documented on blockchains. It should be possible for everyone at any time to understand how rare certain game items really are, what benefits they bring, and at what prices they have been traded in the past. The blockchain could thus create the basis for any functioning economy in gaming worlds through security and trust. In the future, it may prevent game studies from making arbitrary decisions that can make certain skins or objects become meaningless and worthless from one day to the next.
But of course this also comes with certain risks and makes it understandable why players are skeptical of NFTs and blockchain technology. Because games have always been one thing above all else: a way for people to escape the monotony and stress of normal everyday life.
Precisely because everyone in many games is just ahead of the game developers, players do not want to integrate a market economy into games. In addition, some players see justice in games threatened by a blockchain-based economy in the game. In a game world where players can buy resources with money (e.g. NFT characters in Axie Infinity or Thetan Arena), this can allow some players to advance through the game without investing a lot of time.
While the majority of gamers tolerate the purchase of aesthetic upgrades to game items or characters, they often get annoyed when money can buy tangible gameplay benefits.
Why NFTs could still make sense in games
But is it really true that the commercialization of games through blockchain technology and NFTs in general makes games worse?
Hatred for NFTs in games tends to come from passionate gamers rather than casual gamers who make up the majority of gamers. Data from the company Newzoo shows that casual gamers who play on mobile devices now make up more than 55 percent of all gamers. In addition, sales figures speak a clear language. Mobile gaming revenue now accounts for more than half (52%) of the entire industry, while PC gamers account for 20% and console gamers for 28%.
For many players, this development does not seem to be a bad thing. It may come as a shock to some, especially older players, but the numbers do not lie. The market for casual gamers who can not distinguish a “good” game from a “bad” and waste their money on games like Clash of Clans or Clash Royal is growing rapidly, and it does not seem unlikely that many of these players will in the future be able to play their game. Can also put money into NFTs.
The beauty of free markets, however, is that it does not mean that older game models will completely disappear, but rather that a new game category will expand the game world.
A report by blockchain analytics firm DappRadar shows that blockchain games already have millions of users and were responsible for over 22 percent of the volume of all traded NFTs in the third quarter of 2021. Alone, while the play-to-earn model still in its infancy, it appears to have passed the market test.
Play-to-earn revolutionizes gaming?
NFTs and blockchain technology are expanding the ways in which players can make money if they want to. Until now, few of us have been able to monetize our time invested in games through live streaming on Twitch, with YouTube videos, or by participating in tournaments and product sponsorships.
Playing with NFTs can change that. According to the theory, objects acquired in games could be traded directly with others and could theoretically be exchanged for other cryptocurrencies or fiat currencies at any time. Even at the lowest level, it is possible for even casual gamers to make money in mobile NFT games such as Thetan Arena or Splinterlands.
In addition, the tokenization of skins, game worlds, or game objects can allow artists and game modes to sell their builds in Minecraft or their game modes in Half Life to their fans. Blockchain games promise to unlock all of these earning opportunities – and more.
For many years, Microsoft enforced intellectual property laws that allowed Minecraft users to modify and create user-generated content, but prohibited them from selling it for their own profit.
Players are rightly concerned about how blockchains will transform their beloved worlds. But the passion of many hardcore gamers, combined with a gross misunderstanding of blockchains, has led them to end up defending the only true dictatorship for profit maximization, namely the big game studios.
Blockchains offer a way to legitimize gaming economies and engage the majority of all players in the wealth-building process. Not just developers, not just streamers or e-athletes, but everyone. Change will come with risks, but change always opens up opportunities that can benefit us all.
This article has previously appeared in the April issue of BTC-ECHO Magazine.
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