Written by Nicholas Donarski, Founder — ORE Sys, LLC
Since late 2017, the emergence of non-fungible tokens (NFTs) in video games has flipped the gaming industry on its head. With game titles like CryptoKitties, My Crypto Heroes, and others being developed on blockchain technology, the integration of NFTs into the gaming sector has transformed the ways in which players experience and take value from the games they love—and it’s only just beginning.
Historically speaking, gamers have been forced to purchase different gaming systems in order to purchase and play the titles they wish to. But because those titles (as well as any content players purchase in-game) are unable to be transferred from system to system, or platform to platform, this has traditionally left gamers feeling defeated—pun fully intended.
Imagine spending $15, $25, or more for a unique in-game avatar to use online when you play Call of Duty on Xbox, only to find that that in-game asset can’t be transferred to your Call of Duty account on PC. Now, imagine if you could not transfer that purchase from platform to platform, but from one game to another entirely different one like Fortnite. Typically, this transition of purchased in-game assets would be considered impossible. These two titles come from entirely different developers and producers, making cross-game functionality all but impossible without lengthy licensing negotiations.
However, by utilizing blockchain technology to provide developers with royalty protections and prevent cross-game piracy, not only could players more easily determine the true worth of a game or specific in-game asset they purchase, but seamlessly transfer that asset across different gaming platforms or entirely different game titles, themselves.
Determining true value for players, by players
The emergence of NFTs into the gaming industry has reshaped the entire idea of what “ownership” means and entails. Their integration into games developed on blockchain technology allows gamers an opportunity to own — not merely license — the in-game assets they purchase using the cryptocurrency contained within their blockchain wallets. At the same time, it grants game developers the ability to truly own the games and in-game assets they make and release, rather than having to do so through a publishing studio that can limit their creative vision and retain ownership over their titles and any content contained within them.
But like any other asset, tangible or otherwise, the concept of NFTs alone holds no inherent value. Instead, the value of each separate NFT is subjective to (and created by) each individual. For instance, when we look to NFTs in the video game industry, one specific in-game asset may be perceived as extremely valuable to one player — or even the majority of a particular game’s player base — but not to others. The same holds true for games themselves. One game is not inherently more valuable than another, but certain players may find more value in a particular video game title than other ones similar to it.
This is what makes the idea of integrating NFTs more deeply into the gaming industry such an interesting notion. By transforming in-game assets such as unique items or avatar skins into NFTs, players are able to not only utilize their cryptocurrency to purchase or acquire the NFTs they deem to be most valuable, but because some of those in-game assets operating as NFTs are inherently rarer and more widely coveted by larger portions of a game’s player base, those particular assets or NFTs will regardless see their value appreciate over time.
Future applications of cross-platform or cross-game purchases
From the perspective of a blockchain game developer, this perception of value regarding the NFTs they create poses a unique challenge. If one in-game asset they create and release as an NFT is not only inherently more scarce than others, but also able to be transferred across multiple gaming platforms or game titles, this creates additional buzz around that specific asset or NFT itself.
For example, if an increasing number of Call of Duty players see another player using what they believed to be a purchasable avatar skin exclusive to a character in Fortnite, they will want to know how they can acquire a similar asset for themselves. This, in turn, creates a greater perception of value on those in-game assets as NFTs. And because those NFTs are created, purchased, sold, and traded using blockchain, the developers who make them will no longer need to worry about licensing or piracy issues that could detrimentally affect them outside of the blockchain network.
As the integration of NFTs in blockchain games and the gaming industry as a whole continues to deepen and broaden, this will undoubtedly spur the drive for communities in the industry to implement methods for players to use the in-game assets and NFTs they purchase across multiple different gaming platforms, and even across different games. In fact, the foundation of this may already be taking place through the continued development of the digital Metaverse.