NFTs in video games
A lot of video game publishers are looking into NFTs and the use cases it brings for the video game industry. It could change the video game industry, but what are the promises of NFTs in video games?
If you want a basic understanding of NFTs, I recommend reading my previous post: NFTs, the basics
Microtransactions
The game industry has been moving to a microtransaction business model for a while. My first experience with them comes from the game ‘Call of Duty: Black Ops II’. In this game, different gun skins, or so-called camos, were being sold for around €2 each.
At the time people were complaining that this was far too expensive, who would pay €2 for just a different paint job on your virtual gun, right?! Well, I think it is safe to say that since then, a lot has changed. Gamers perspective of microtransaction has mostly shifted, today they are unthinkable. I can name countless games that use the microtransaction business model.
- FIFA: Ultimate team cards
- Counter Strike: Weapon skins
- Fortnite: Character skins
- Candy Crush Saga: Lives
- Etc…
Although some may argue that microtransactions are still controversial, especially when implemented in an anti consumer way, they are mostly accepted by players. Where in 2013 people were complaining about €2 for a ‘weapon skin’, nowadays in some games weapons skins are selling for high prices, and when I say high, I mean a thousand euros high.
Considering these prices, I feel like it is safe to say players are accepting that digital assets have value and see them as valuable. Players are also accepting ownership over these assets, but do they really “own” them?
Ownership
This is where the concept of a NFT becomes interesting, the concepts promises real ownership of in game assets. While a weapon skin in Counter Strike may be tight to your account, if the game decides to shut down or ban your account, all the assets are lost.
NFTs will be stored inside your crypto wallet, even if a developer revokes access to the game, a player can still trade their assets. With NFTS, the transactions of players will be stored decentralized. A game developer or publisher will not be able to influence this decentralized storage. Everyone can see these transactions and see what all players own.
Second hand market
Okay, all good and well, but why would any game developer or publisher want this?
The concept does not only promise to benefit the players, the developers, and publishers benefit as well. The publisher is getting paid for the initial trade of an asset, they are the ones initially creating the assets so also the one that get initially paid by the players. They do net get paid when players trade assets between another. A NFT can be implemented in such a way that for every trade, a fee is charged by the original creator of the asset.
In a game like Counter Strike weapon skins can be traded on the ‘Steam market’ a market owned by the developer of the game. On this market, the developer takes a cut of the trades between players. This is the official way of trading, but players are free to trade between one another outside this market. It does not take much ‘Googling’ to find alternative third-party websites where trades can be made, the developer does not take a cut from these trades, with NFTs they could take a cut.
This means that developers and publishers can monetize “digital second hand trading”, this is probably also why publishers like EA are very interested in implementing NFTs in their games.
“Multiverse” assets
A cool possibility would be cross game compatibility. Because ownership of assets are stored in a crypto wallet and not stored by a centralized system of one game, cross game assets would be possible.
If this approach is realistic is still questionable, developers would have to work together across multiple games. A NFT only stores the ownership of a particular asset and some metadata. Items would need to be implemented by these developers in their different games and probable serve different purposes in different games.
Even though real widespread usage of cross game compatible assets is questionable, the cryptonetwork ‘Enjin’ promises such implementation, calling it “Multiverse” assets. The most interesting partnership of this cryptonetwork is their partnership with ‘Microsoft’ to bring some of these assets to ‘Minecraft’.
Beneficial
NFTs do promise benefits to players and game creators, but it is too early to say if these will truly be benefits. Publishers do indeed have interest in implementing NFTs in their games, it is difficult to say if they will do this is in a predatory way, or that they also will truly benefit the player. Only time will tell.
The potential of implementing it in a consumer friendly way is there, and it looks like NFTs will be a part of video games in the future.
