Written by: Lado Tekavc a.k.a. NFT_Collector
Edited by: Keyboard Smasher :)
NFTs have seen enormous growth in recent months. Everyone’s talking about how they are the next big thing in technology, collectibles, art, and gaming. Many famous people and big brands are issuing their own NFT collectibles, trying to cash in on the current NFT trend.
Most of these NFT collections will soon become just a distant memory. Something you bought because of the hype and then it provided no intrinsic value. I believe only one NFT sector will outlive the hype and become the standard of its industry. The sector I’m referring to is of course Gaming. It seems I’m not the only one with such an opinion. The CEO of Coinbase, Brian Armstrong, feels the same about gaming and crypto in general:
You’ve probably played or heard of popular video game titles such as Fortnite, Rocket League and League of Legends. What do these games all have in common? They are all major players in the esports sector with millions of players, generating upwards of seven figures in profits YoY through selling of in-game assets. These assets are usually in the form of cosmetic add-ons with no effect on the game itself.
That all sounds fine and fair, right? Wrong.
Once players buy an in-game asset in these games, they cannot sell it. They can sell the entire account, but that will get it banned and erased if detected because it’s against their terms of use. So what happens if you get tired of the game or just don’t have time for it anymore? Maybe you want to move on to another video game? What happens with the bought in-game asset? Well, tough luck kid. The bought in-game asset can not be sold or exchanged, it will just sit in your inactive account forever. By moving your playing time to another game, you will again have to spend additional funds to enhance your gaming experience.
This is one of the problems that NFTs as in-game assets can solve.
If the creators design the game items as NFTs, they provide asset owners the ability to transfer and sell them on NFT marketplaces. The in-game assets gain enormous inner value and provide peace of mind to its owner, who can now get back at least some of his money when he decides to move away from the game.
But what about the game developers and the publishers? Wouldn’t they lose a lot of money this way? The answer is yes, they could. Once the initial sale of in-game assets is completed, that’s it. No more revenue for them. But if structured correctly, they could gain a lot more. If they issue their in-game asset as NFTs, they can include automatic royalty sharing. This means they earn a fraction of the sell price everytime the asset changes hands. For them this is a financial perpetuum mobile. There you go, game developers can win too.
NFTs are the best form of in-game assets because they provide verifiable scarcity. One particular asset’s supply can be much lower and thus much rarer than the others. We can verify this through the wonders of blockchain technology. Scarcity and rarity are important because of one key fact observed throughout history: the rarer the asset, the higher the price. It’s only natural that everybody wants to own the rarest asset.
In conclusion, NFTs present an option for game developers to truly and selflessly empower their communities, the gamers that spend hours playing the games they created and make the project worthwhile. Because after all, a game’s success should be measured by the happiness of its community and not a few extra dollars in the company’s coffers.
Now that actually sounds fair, right? Right.
