What We Might Expect From NFTs in Games in 2022

How games are implementing NFTs, and why the multibillion-dollar GameFi and blockchain gaming market has been named one of the top trends of 2022.

It's hard to go a day right now without some NFT chatter or rumors popping up — GameFi is the fastest-evolving industry today. You've probably heard of a notorious tech company launching a new collection of NFTs, a video game executive optimistic about NFTs, and the Metaverse, an angel investor startup tweeting about how strong the connection between NFTs and art is. Undoubtedly, NFTs in games promise to provide many opportunities for both players and investors. However, while the market is so fragmented and chaotic, it isn't easy to understand how to capitalize on this trend wisely. To succeed in this fast-growing field, you need to know the secrets of the GameFi industry.

Despite many well-defined definitions, many experts claim that there is still little real meaning or understanding in NFT — at least when it comes to connecting games with NFT.

Looking at the crypto- and NFT-based games that can be played now, there may be objective reasons for skepticism that are clearly worth looking into. Aren't we going to spend less time playing games and a lot more time selling/buying things in the future?

And again about NFTs

NFTs, or non-fungible tokens, are designed to be one-of-a-kind digital goods. Money is fungible; it can be replaced by another identical item. The most straightforward and most understandable example is that one $20 bill is equivalent to another $20 bill. The whole point of NFTs is that they are unique digital items. A token, as defined by the NFT marketplace OpenSea, is a "digital certificate stored on a publicly accessible distributed database" called a blockchain. The information contained in this certificate or "smart contract" makes the NFT unique in every sense of the word.

However, in practice, the distinction between an NFT certificate and the digital good itself has been quite confusing. You must have heard that many people jokingly compare NFTs to JPEGs. However, there is still a difference, and it is significant. It's all about the certificate, which says you own a one-of-a-kind digital product.

There are also NFT critics who only twist the knife. They claim that NFTs are bad for the environment because blockchain transactions are mostly done through a "proof of work" mechanism associated with cryptocurrency mining — computers solve mathematical problems to verify transactions which consume a lot of energy. Ethereum, the cryptocurrency most NFTs are currently based on, is expected to move to a more energy-efficient "proof of stake" system, but this has not yet happened.

However, this tension between proof of ownership of NFTs and JPEG files that anyone can copy is quite different when it comes to video games. The point is that NFTs can be used to represent unique in-game skins or items and that you can sell those items to other players or keep them if you want. Unfortunately, not everyone fully understands how exactly it works.

How is NFT different from other microtransactions?

One of the biggest differences between NFTs and the downloadable content we've been buying in games for years is the blockchain.

When purchasing a skin in-game, your ownership record is linked to your account. The game developer has complete control over exactly how this downloadable content works. The developer is responsible for many things: how it proves your ownership, the server you download it from, how the in-game item is implemented in a given video game. How a skin, potion, or any in-game item is presented in one game may be completely different in another one — it all depends on how the game was programmed.

Not surprisingly, the news about video games with NFTs linked to them causes both righteous anger and genuine interest among gamers. It is crucial to distinguish innovation from microtransactions in the so-called new wrapper.

Three key parameters for success

The success of all video game projects based on blockchain and NFT technologies depends on three key parameters:

Transparency and stability. Players within the system must have full access to the rules they can produce NFTs and trade them in the internal system. Gamers need to understand what they are buying and selling and what makes the deal unique. The token must guarantee inseparable ownership of a particular in-game item.

Distinguishing characteristics of gaming assets. Whether it's monsters, earth, houses, or armor, all of these items must have a distinct and explainable personality. This revitalizes the potential in-game economy by encouraging gamers to both level up themselves and interact with each other.

Limited in-game resources. The number of unique tokens should be limited. As you approach the limit of opportunities to produce something new, the value of the players' products will naturally increase.

All three parameters are directly related to the very essence of cryptocurrencies and non-fungible tokens: they exist in a limited number, their uniqueness is explained by being tied to a specific unique real or virtual object, and the rules for their production and implementation are clear and accessible.

Conclusion

While NFT games allow gamers to earn money by playing their favorite games, the industry lacks a social dimension so far. The advantage of owning an NFT asset is that it is yours, and you should be able to use that asset where you want and how you want.

It is logical to assume that people want something new. The utility of blockchain adds a necessary level of interaction and ownership that has never existed before. Implementing these elements in new and innovative ways has a huge impact on the entire industry.

As soon as someone creates something interesting, this concept is implemented both in existing projects and future ones. Growth is incredible, and it is an innovation that really matters.