By Nicholas Donarski, Founder — ORE Sys, LLC
Non-fungible tokens, or NFTs as they are more commonly known, have become one of the most disruptive innovations in the gaming industry. Since 2017, with the release of games such as CryptoKitties and My Crypto Heroes boasting NFT integration in their models, communities of game developers and players alike have been brainstorming the ways through which NFT could potentially grant them greater value from their passion.
For decades, players have had to purchase separate video game systems in order to expand their libraries of beloved game titles, but those games and any in-game content purchased can’t be moved from one system or platform to another. Imagine dropping $15, $25, or more to buy a unique, limited edition character avatar skin to use in Call of Duty online on your Xbox. When Microsoft releases the next generation of Xbox consoles, that in-game asset purchased can’t be transferred to the new system.
But if that in-game asset was purchased as an NFT, it could potentially not only be transferred from one game system or platform to another, but even from one game to another entirely different title like the hit online game Fortnite. Traditionally, this would be impossible without costly and time-consuming negotiations since these two games were made and released by completely separate companies.
NFTs allow players to determine where true value lies
By using blockchain technology to grant developers protections against cross-game piracy, players could not only determine the value of an in-game asset they want to acquire more easily, but also transfer that asset seamlessly across the different gaming systems they use, or even across different games.
NFTs, like any other asset, don’t possess any intrinsic value. The value of every NFT produced is subjective, created (and held) by an individual consumer. One specific in-game asset or NFT might be extremely valuable to one player, but considered worthless to others.
In transforming in-game assets purchased by players (such as rare items or avatar skins) into NFTs, players are given an opportunity to acquire the NFTs they view as most valuable to them, subjectively, using their cryptocurrency wallet on the blockchain. And because some of those assets or NFTs are inherently rarer in nature, they become more desirable to larger portions of a particular game’s base of players, causing them to further appreciate in value over time.
Potential applications of cross-game purchases
The perception of value regarding in-game NFTs poses a distinctive hurdle to overcome, particularly from the perspective of developers of blockchain-based games. Should one in-game asset a developer creates as an NFT is inherently rarer in nature than certain others, and is able to be transferred across different gaming systems or titles, players will take notice and begin generating additional word-of-mouth speculation around the value of that NFT.
For instance, imagine an online match of Call of Duty in which the players witness another’s in-game avatar sporting a skin they believed was an exclusively available NFT purchase in Fortnite. The players in that match are going to want to know how they can acquire a similar unique in-game NFT, themselves. This fuels those players’ perception of value regarding the NFTs available for them to buy using their own crypto wallets. At the same time, because those NFTs are made, released, bought, and sold via blockchain, that NFT’s original developer no longer needs to fear how potential licensing or piracy issues could affect negatively impact them.
It stands to reason that the broader integration of NFTs in the gaming industry will continue to expand over the coming years. As it does, this will indeed fuel the desire for communities of gamers to utilize their purchased in-game NFTs across different gaming platforms and titles, as well as spur developers to implement methods for players to accomplish this as market demand grows. Even now, the foundation of this projected demand is already being built alongside the development of an entirely new gamified virtual world: the Metaverse.