What is an NFT and How is it Used in Gaming?

Non-Fungible Tokens are a part of our lives currently, and people are purchasing, trading, selling, and utilizing them for various purposes. Any digital resource can be an NFT, they come in different forms, styles, and usages. This is probably why people have trouble defining them; they are basically unique digital data that are stored securely in the blockchain.

What is an NFT in simple terms?

What defines and makes NFTs are smart contracts. NFTs are tied to a smart contract system which is a program designed to automatically carry out a contract. These contracts are mutual agreements and obligations tied to both parties in a transaction. The details and transactions involving an NFT can be publicly viewed, which acts as proof of authenticity and a certificate of ownership. Additionally, unlike cryptocurrencies, they are properties that cannot be swapped for identical ones; each one’s metadata is unique. 

Not every NFT has the same use; they can either be collectible items or have certain utilities in various applications. They might have similar art styles but different attributes, or vice versa. As such, NFTs can be a part of an art collection or a series of characters that can be used in a game.

Why would anyone buy an NFT?

People might wonder why they should buy an NFT when they can just take a screenshot of an NFT image and use it wherever they please. The thing is, owning an NFT means that the owner has the original and unique copy of an asset. It is just the same as owning a physical and original piece of artwork by a famous artist. People can just buy copies of Rembrandt’s The Night Watch, but the value lies in the real thing. This can be applied identically to NFTs. They are valuable because they are unique, and people can actually prove that they own a digital asset. 

On top of that, NFT assets have utility besides being collectible. The majority of valuable NFTs are expensive because of their utility, such as a high-quality NFT character or a rare NFT item in a game. 

They can even be used as access tokens for limited events or applications. The other expensive NFT assets can be in the form of digital art by notable artists. Many artists who were already creating digital artwork benefited highly from NFTs since they were able to sell the original piece without the help of physical mediums.

The Involvement of NFTs in Gaming

NFTs are already being implemented on gaming platforms nowadays, and countless game developers are branching out their games to include NFTs. NFTs will surely be an integral part of the gaming ecosystem in the future. 

It is only a matter of time until the AAA game studios integrate blockchain NFT assets and cryptocurrencies into their upcoming highly anticipated games. This will be a move that will initiate the shift in the gaming industry for you to become the sole owners of your hard-earned assets in games.

Even though NFTs are being incorporated into games slowly but surely, they are not completely a new system that you are unfamiliar with. You are already pre-adapted to owning in-game assets. Purchasing a skin or a limited experience boost is basically owning an asset in-game without the blockchain part, which means they are not entirely player-owned. 

You do not have control of the things you have bought in-game other than using them digitally. This is where blockchain and crypto wallets come in. If every in-game asset that you bought were a token, you could have traded, exchanged, sold, and bought these assets from other players using decentralized marketplaces and stored them in your digital crypto wallets.

The Usage of NFTs in Gaming

The inclusion of NFT assets in games will surely bring more value to the gaming industry. Each transaction for cosmetic items, playable characters, and wearable equipment will be an income for both the developers and the blockchain network. There will be a self-sufficient economy for each game and platform that incorporates its own tokens and assets into the project. Currently, a play-to-earn system is mainly used in order to create this economy.

You can earn in-game tokens by using your purchased NFTs to return your investment. This can be done in many different ways. The majority of games require an NFT character or an NFT item to start playing. By simply doing in-game activities and progressing through various game modes, the game will reward you with its native token. Generally, the reward you get is dependent on the rarity and quality of the NFT you own and use in the game. Additionally, some games even allow their NFT assets to be staked for further profits. Of course, you can not earn constantly just from buying and using an NFT in the game. Many games require more investment in order for you to progress further. This creates a cycle where everyone involved is constantly earning to buy NFTs, spending tokens to enter in-game events, and trading items in order to create an economy.

Another advantage of owning NFT assets is that they aren’t necessarily tied to a certain project. This case is the same in the blockchain gaming world. 

If Sky Mavis, the developer of one of the most popular blockchain games ever, Axie Infinity, were to release another game, they could choose to include the same NFT characters called Axies in the new game. This will broaden the range of NFTs and their utility in the platform, ultimately raising their initial value. 

So, to summarize, there are many strengths of NFT assets in gaming; the advantage of actually owning it, the uniqueness of the item (even if some game NFTs such as armors may look the same, they have different stats, for example), the utilitarian nature of assets that are not being tied to one project, and the permanency of the assets. 

Traditional in-game purchases are one-time-only deals most of the time; they are non-transferable, and you lose all of your purchases when a game shuts down. NFTs operate outside of the game or an application and can exist without relying on any of them.

Are there any mainstream games that have NFT integration?

Many major game publishers are already creating collectible NFT items linked to their most popular IPs, and it is only about time that they transition into NFT assets that are actually useable in their games. Fighting games can easily include and sell their characters with unique attributes as NFTs, or shooters can sell various gun and character skins that are exclusive in their patterns and looks as NFTs. 

Despite some game developers being reluctant to enter blockchain networks and NFTs because of the backlash that gamers showed towards certain NFT projects, there is a slow shift in the gaming industry where developers are trying out NFTs and building new systems. This drives most people to gradually adapt to the blockchain world.

Big game publishers and developers are divided on where to stand on NFTs. There are several companies like Electronic Arts, Konami, and Capcom who are already talking about and implementing NFT items into their products, while Square Enix, Epic Games, and Valve are being silent or cautious about NFTs. Ubisoft already had a shot at NFTs with their own, called Quartz. Unless there is a sudden loss of confidence despite all the advantages and innovations of the crypto world in the near future, we will see many of them slowly transitioning and including NFTs in their platforms and games.

What are the most popular play-to-earn games that use NFTs?

Axie Infinity is a turn-based battler where you can collect and form teams of NFT creatures called Axies and participate in battles against enemies and other players. The main principle of the game is very similar to older Pokemon games; you can find and catch Axies, breed and grow them, participate in battles, and trade them.

Splinterlands features epic card battles where you can create decks on the fly with their NFT cards before entering competitive matches. The battles take place automatically and feature different types and classes that allow for various playstyles.

Farmers World is a farming simulator where you can farm, mine, and fish to gain corresponding tokens to operate on your own land. You can purchase different NFT tools and cultivate their farms using food, gold, and wood tokens.

Alien Worlds immerses you in a world where you have to control the limited resources of its universe. It is a metaverse that is an economy simulator where you use NFT cards to maintain your organization. You can mine planets to earn the game’s own cryptocurrency. In order to start mining, you need to buy NFT land cards.

DeFi Kingdoms is a role-playing game that takes place in a pixel art world where you create your own NFT characters and participate in different missions and professions. The game world has its own market, bank, and shops.

The Sandbox is a metaverse that is made and crafted by you. You can create your own NFT avatars, enter the virtual world, and start building. The game uses entirely user-generated content and creates its own ecosystem according to players' wishes. You are free to craft whatever you please.

Gods Unchained is a strategy card game where you can collect NFT cards from different sets and build their decks to battle other players. You can utilize different gods to suit their playstyle. Its user interface is very similar to other digital trading card games, such as Magic: The Gathering or Hearthstone.

Bomb Crypto is a 2D bomber man game that allows you to collect and utilize NFT characters to bomb chests to earn tokens in-game. You can either micromanage heroes or play as one to advance through levels. It is better suited for semi-idle players who want to check on their heroes only several times a day while they basically mine tokens for them.

Pegaxy is a mech-horse racing game where you can own Pega horse NFTs and compete against other players in various races. Horses have different elemental variables, and they are upgradeable. Horse NFTs can be rented or bought. You can try the game out or invest in a horse and generate profits over time.