The idea of playing video games has changed a lot since the 90s. Today, we demand more entertaining, interactive, and life-like games. And unlike the games of the past, our gaming experience is not limited to the PC. We have mobile phones, tablets, consoles, etc. Now, as technology continues to evolve, we also have NFT games.
In recent years, the popularity of non-fungible tokens has grown significantly. NFTs are widely used in art, real estate, finance, and other industries. What’s more, non-fungible tokens are likely to revolutionize the gaming industry by providing lucrative and innovative gaming experiences. The more exciting and unique the gaming experience, the more players will be willing to engage.
In this article, we will try to understand what makes NFT games so special and what we can expect from them in the future.
An NFT, or non-fungible token, is a unique crypto token that exists on a blockchain and cannot be copied. NFTs are digital assets that represent in-game items, memes, and GIFs. Players own the tokens they earn in games and can sell them later as the items become rare and thus more valuable. NFTs strive to preserve the value of the items associated with a game collection.
NFTs cannot be exchanged for other non-fungible tokens because they are unique. Each NFT contains metadata that cannot be changed on the blockchain. This metadata is like a certificate of authenticity and describes what it represents, its ownership history, and transaction records.
NFTs can be created to hold value outside of the game for which they were developed. Therefore, blockchain-based games can significantly expand game economies, create new game categories, and drive new game development.
NFT games are blockchain-powered games that leverage NFTs to represent in-game assets, including characters, items, and land. NFT games allow users to buy, sell, and trade in-game assets that are stored on a blockchain. In addition, they provide the highest level of security, full transparency, and stability that is difficult to achieve with traditional game assets.
Players can earn and collect rare and unique items and later sell them for real money on an NFT marketplace. In addition, some NFT games have gameplay features that are tied to NFT ownership. These may include special abilities for some characters or exclusive access to specific areas of the game world.
Play-to-earn
Play-to-earn (P2E) NFT games allow users to generate an income stream by playing. Players are typically rewarded with fungible tokens, and sometimes they may be given NFTs. The more a user plays, the more rewards they can earn.
The most common use of non-fungible tokens in a P2E game is item crafting. Therefore, users play until they receive a token that enables them to craft a specific item to advance in the game.
Regular (fungible) tokens are given to users as a reward for playing the game regularly. Unlike these tokens, NFTs are often distributed to players by chance due to their unique nature. Play-to-earn games are particularly popular in low-income countries, where people try to supplement their fixed income or social security benefits by playing such games.
In-game NFTs
In-game NFTs provide another way for players to earn income through NFT-based games. Instead of earning a fungible ERC-20 token like SLP in Axie Infinity or SKILLS in CryptoBlades, users earn NFTs that represent collectible items. Players can trade them either within the game or outside the game on an online marketplace. The value of a particular item depends on its rarity, cosmetic appearance, and utility within the game. For example, armor that grants invisibility or swords that do more damage will have a higher value.
The CryptoKitties game is an example of a game that relies on the collectibility of in-game NFTs to drive its gameplay. The element of chance is the only thing that keeps players engaged, while its absence allows them to earn a stable income.
As the video game industry and blockchain continue to interact, newer NFT-based games offer a combination of earning and finding tokens in different ways.
NFT games offer benefits to both investors and players. Let’s take a closer look.
Complete control over assets
NFT games give players complete control over their assets. This option attracts players because it allows them to earn cryptocurrency when they sell their NFTs. What’s more, physical ownership increases the motivation to play blockchain-based games and can become a regular source of income.
Immutability
Since all in-game items are represented by NFTs, they exist independently on the blockchain even if the game is shut down. Therefore, users can buy and sell their NFTs on a marketplace no matter what happens to the game.
In addition, new games can be designed to use these tokens. NFTs rely on blockchain principles, so the data they contain is unchangeable and secure.
Interoperability
In traditional games, in-game assets can only be used within that game. NFT-based games use blockchain technology to make in-game assets interoperable. Therefore, you can easily use the in-game assets from one game in another if they are built on the same blockchain.
Non-fungibility
Each NFT is one-of-a-kind, so you can’t exchange one for another and expect the same value in return. Likewise, the same in-game items won’t have the same value in blockchain games. This feature of NFT-based in-game assets allows players to make a good profit if their NFT is rare.
Revenues from transaction fees
When players trade or sell an NFT, the original creators may charge transaction fees. Sometimes transaction fees can be a considerable amount, so the profit will be proportional.
Security
NFT-driven games provide players with a highly secure environment. Blockchain technology is tamper-proof and advanced, providing the highest level of security and reliability.
Transparency
The rarer the NFT, the higher its value. When you buy an NFT, you can see its entire history from the moment of its creation. Since blockchain records are immutable, NFT collectors can verify their authenticity and rarity.
If you are interested in entering the NFT market, you should understand the risks associated with NFTs.
Cyber threats and online fraud risks
Malicious actors create replicas of the original NFT marketplaces on the Internet. These marketplaces look legitimate because they have the original logo and content. These fake NFT marketplaces are a major risk because they can sell NFTs that don’t even exist. What’s more, fake NFT marketplaces may also sell counterfeit NFTs.
The risk of online fraud is enormous because of fake airdrops and NFT giveaways, copyright theft, and replication of popular NFTs. Some people may even pose as famous NFT artists and sell counterfeit NFTs, while others may promote these fraudulent activities on social media.
Evaluation challenges
The main challenge that NFTs face is the unpredictability in determining the price of the NFT. The price of an NFT depends on multiple factors, including its creativity, uniqueness, rarity, and demand for it, to name a few. Since there is no set standard for each type of NFT, there is significant price fluctuation.
Market participants can’t determine all the factors that influence the value of NFTs and can’t predict which of them will increase their price. As a result, price fluctuations are constant, and valuing an NFT becomes a challenge.
Intellectual property rights
When purchasing an NFT on the market, verifying that the seller actually owns the token is important. People can pose as sellers when they only have replicas of NFTs. In this case, you get the right to use the NFT, not intellectual property rights.
You can go through the metadata of the smart contract to find the terms of ownership of that NFT. There should be a rule allowing artists to display their own tokens. NFT marketplaces can’t follow traditional property laws, so blockchain technology should have new intellectual property rights.
Legal challenges
There is no universally known legal definition of NFTs, as different countries have different approaches to classifying them. Currently, legislators are trying to find a universal definition for NFTs. However, this is becoming more difficult as the market and variety of NFTs are constantly growing.
Smart contracts risks and NFT maintenance
The risk of smart contracts and NFT maintenance is the most notable in the current NFT market. For example, hackers can attack a DeFi network and steal a lot of cryptos if smart contracts have security issues. Therefore, you can’t guarantee complete security if a smart contract has even a tiny flaw.
NFT games are not as simple as just holding digital collectibles in your wallet. Each NFT-based game uses non-fungible tokens in its mechanics, rules, and player interactions. For example, an NFT may represent your unique avatar or character in the game. NFTs can also represent digital items you find while playing the game. You can then trade your NFTs or exchange them with other players for profit.
Let’s go step by step. How are NFTs implemented into a game environment? Developers build smart contracts to create, implement, and exchange NFTs within a game. Smart contracts are self-executing programs stored on a blockchain. They make up the rules for the NFTs used.
NFT games operate on the play-to-earn model. It allows people all over the world to earn a passive income by playing games they love. Typically, a user is rewarded with native game tokens or, in some cases, NFTs. The longer they play, the more likely they are to earn rewards.
Let’s study an example and take Axie Infinity. Users are required to purchase three Axies to start playing this game. However, you can also get a free scholarship from a friend and start playing the game.
Once you start playing and have a starter team, it’s time to complete challenges and tasks to earn SLP, ERC-20 tokens that can be exchanged for fiat currency on exchange platforms. You can also use these tokens to breed new Axies. Each Axie has unique characteristics, so their value is different. Therefore, you can create a market for Axies based on their rarity and uniqueness.
All in all, in-game NFTs are another way to make a profit. Players receive non-fungible tokens as rewards instead of in-game prizes such as SKILLS in CryptoBlades. However, the value of these tokens will vary depending on their rarity and usefulness within the game.
Each blockchain has several standards that you can use as a template to create a function in a smart contract. Each standard has specific attributes and features that must be filled in when creating an NFT.
Ethereum
Ethereum is still the most widely used blockchain platform for creating and operating NFTs. The original standard for tokens built on Ethereum is ERC-271. Thus, a digital asset must have specific attributes and characteristics that make it unique and rare.
ERC-998 and ERC-1155 are less common standards on the Ethereum blockchain. They have the same characteristics as the ERC-271 standard, but these standards can include both fungible and non-fungible tokens. For example, ERC-1155 tokens allow users to register fungible (ERC-20) and non-fungible (ERC-721) tokens on the same address and smart contract. This feature is used in games where fungible in-game currency and non-fungible collectibles can be stored together.
Flow
The Flow blockchain was created because the CryptoKitties game had begun to consume more Ethereum resources than originally planned. The NFT-based game uses ERC-271 tokens and allows players to buy, breed, collect, and sell digital cats.
Smart contracts in the Flow network are written in the Cadence language. Flow enables the use of updatable smart contracts that can be deployed in beta and then gradually improved by the original authors.
Tezos
Tezos is a multifunctional blockchain platform that supports smart contracts and allows the creation of tokens and decentralized applications. FA2 is a non-fungible standard that provides more flexibility for handling in-game elements.
This section is the most intriguing, isn’t it? Let’s take a closer look at how players can make money through NFT games.
Collect and trade NFTs
The easiest way to make money is to collect and sell non-fungible tokens. Follow the rule of buying low and selling high on an NFT marketplace. For example, complete tasks or missions to earn in-game rewards and then trade them for a profit. It’s always a good idea to study the market first and diversify your portfolio to maximize your earnings.
Develop character assets
Depending on the game you play, the more time and effort you put into the game, the more advanced your character will become. Therefore, there are more earning opportunities.
Participate in tournaments
You can also participate in tournaments to win cash prizes in NFT games. Simply find a tournament you are interested in and sign up. You can also live stream your game for others to watch and earn money out of it.
Play-to-earn NFT games
With P2E NFT games, you can earn money while you play. In general, it’s a logical way to earn in-game currency that can later be sold for real money. All you need to do is find an interesting play-to-earn NFT game, obtain in-game assets for completing tasks, and sell those items to make a profit. You can also use your profit to buy other in-game assets.
Sell game artwork
Players can also sell game artwork for a profit. This can be digital art, illustrations, and more. The best way to do this is to create a portfolio of your work and start submitting it to game publications. You can also post it online for others to see. NFT marketplaces are a great way to sell your artwork.
Sell NFT trading cards
Finally, you can sell individual cards or sets of cards to earn money. These trading cards can be listed on NFT marketplaces and sold at various events.
You can choose a game that offers the best gameplay or one with the best play-to-earn tactics. Here is a list of the most popular NFT games available.
Axie Infinity
Axie Infinity is a Pokemon-inspired game in which users collect, breed, and train Axies, NFT-based digital pets. Players must purchase at least three Axies to join the game. Axie Infinity uses blockchain technology to pass on traits, strengths, and weaknesses to future generations of Axies.
Players can complete quests or compete against other users to earn Smooth Love Potion (SLP), the platform’s native ERC-20 token. The SLP tokens are required to breed new Axies. There is also a governance token, the Axie Infinity Shard (AXS), which can be used for staking.
Gods Unchained
Gods Unchained is a free-to-play trading card game where users collect cards by either purchasing them or winning player-versus-player battles. Users earn experience points for every battle they win. When they have enough experience to advance to the next level, they receive a new pack of cards.
Each card is represented by an ERC-20 token, which can be sold on the open market. Users who sell these cards receive GODS, the platform’s native token, as payment.
The Sandbox
The Sandbox is one of the most active blockchain-based NFT gaming platforms. It allows players to own and customize different parcels of land represented by NFTs on the Ethereum blockchain.
Users can build virtual games, museums, and many other creations. In addition, players can create characters and earn the platform’s native SAND tokens. The Sandbox ecosystem also rewards everyone who contributes to its development.
Sorare
Sorare is a free-to-play NFT game with collectible and tradeable soccer player cards from real life. After completing the registration process, users receive a pack of cards. Players can create their fantasy football team and compete with other players to unlock more cards. They also have to buy rare cards with ETH to advance in the leagues and win prizes.
The game includes four card categories: common, rare, super rare, and unique. Players can use their cards to create a team of five players, choose a captain, and participate in weekly competitions. In addition, users can sell their cards on an NFT marketplace.
Splinterlands
Splinterlands is a free-to-play tradeable card game that allows users to earn rewards for winning card matches. Players can also compete in skill-based matches to build their card collection. Splinterlands lets users buy, sell, and trade their virtual assets. The game features a native token called the SPS, which gives players the power to influence the future of the game.
Players must purchase a starter pack of cards, create a Steam account, and reveal their purchased cards in Splinterlands to begin battling other users and earning rewards. The game operates on the Hive blockchain, which ensures transparency and security by providing a verifiable history of transaction records.
To get started in NFT gaming, players can buy unique digital assets or create digital art, music, and virtual worlds to attract other players and earn money. All in all, the three basic things everyone needs to get off the ground are a game, a crypto wallet, and a cryptocurrency.
First, you need to pick a game. There is a wide variety of blockchain-based games to choose from. You can find life simulators, collecting games, monster battlers, trading card games, and many other genres.
Next, you will need a crypto wallet to purchase cryptocurrencies, store NFTs, and in some cases, create a game account. There are several types of crypto wallets, including software wallets, which can come in the form of browser extensions. A crypto wallet allows its owner to hold their digital assets and perform in-game transactions. Visit the official website of your chosen wallet to install reliable software.
Finally, get the cryptocurrency or NFTs that the game requires to start playing. You can visit a cryptocurrency exchange to acquire some digital currency. Once you have some crypto in your wallet, head to an NFT marketplace to buy some in-game tokens and get started.
Define the game model
NFT-based games can be divided into two main groups: play-to-earn (P2E) and free-to-play (F2P). To start playing a P2E game, players must buy their first NFT. In the future, players can get their investment back. Most P2E games allow users to win utility tokens and purchase NFTs that represent characters, benefits, or upgrades.
As for F2P games, they don’t require any initial costs, so users can start playing instantly. In this case, the potential revenue is lower. In addition, such games may not have utility tokens.
Select a platform
Players can interact with your NFT game through a web browser or mobile app. To make the right decision, define your target audience and the devices they use.
A web application can be launched from any device anywhere in the world. A mobile app runs much faster on smartphones and can have more features. As a result, mobile app development is often more expensive. You can also choose a hybrid app option that works as a mobile and web app at the same time.
Basically, the simplest solution for your first NFT-based game is a web application, as it has the maximum reach. In addition, it is not device-specific and doesn’t require compliance with the rules of a particular platform.
Create design for your game
First, you need to select the type of the future game. These are the same for both NFT-based and traditional games: adventure, combat, strategy, simulation, role-playing, et al.
Then you need to do a competitive analysis. Just find similar blockchain-based games and take the most exciting features to support your idea. Finally, write all the requirements in a document. To avoid misunderstandings, you should clearly define the main milestones of the game, its characters, victory conditions, monetization features, and all that jazz.
Then it’s time to make art. Start with a simple art option to avoid the risks and huge investments in an unproven concept. Once you understand the specifics of NFT games, you can move on to games with a more sophisticated level of art.
Select a wallet
Any crypto wallet must be securely protected. First of all, you need to visit the website of the cryptocurrency you plan to use and check the list of recommended applications. Any trusted wallet must have private and public keys and multiple levels of security.
Create smart contracts
Smart contracts are programs that exist on a blockchain and automatically execute when predefined conditions are met. Smart contracts are written in the Solidity programming language. To work with a smart contract, you can use Web3.js, the official Ethereum library.
Let’s see what happens when users want to access their NFTs. First, the frontend gets the user’s address from the crypto wallet. Next, the frontend sends the address to the smart contract. Finally, the smart contract gives the user the address of the NFT held by the given user.
Build backend
We have already discovered that the smart contract interacts with the address of the desired NFT. The frontend takes this address and requests the backend to get the metadata for the NFT. The backend responds with the metadata, which includes the name of the NFT, its address, and its identifier.
Once the frontend receives the data, it can send another request to the server with the NFT’s address. The interface can then display the available data, and the user can see their NFT name and image.
Test your NFT game
You can use special blockchains to test your game. You need to perform API, functional, integration, security, and UI testing before launching your product.
While there are several benefits of adopting NFTs in the gaming industry, there are also considerable challenges to overcome. First, NFTs need to become more attractive and intuitive to mass users who may not be tech-savvy. There is also a risk that some NFTs will be used as speculative assets because they have built-in value. This could motivate players to acquire in-game assets to sell them for future profit rather than use the assets within the game ecosystem as expected.
Nevertheless, the potential to make money in the gaming industry will incentivize more non-blockchain-oriented companies to experiment with NFTs. For example, they may partner with third-party blockchain projects that have enough technical expertise to bring their ideas to life. At the same time, the greater success of decentralized gaming applications will likely spur further development of innovative solutions that will enable mainstream adoption.
The potential of using NFTs in the gaming industry is huge and doesn’t seem to be slowing down. However, developers, investors, and players should pay attention to the opportunities and risks that come with using this technology in their projects. We are likely to see new use cases and types of NFT games as the technology improves and more projects utilize non-fungible tokens.
NFTs offer benefits to everyone who uses them. They allow players to interact with their favorite characters and games in a modern way, as well as provide excellent monetization opportunities for developers. As the technology continues to improve and players become more comfortable with it, we can expect NFTs to become an even more integral part of the gaming industry.
If you can’t wait to join the blockchain revolution, contact our team.
