The irrational abundance of cryptocurrencies knows no limitationsThe video game industry is another of the markets that is being absorbed by this.The result is unsurprising, with a huge gap between cryptocurrency natives and gaming natives.
Most cryptocurrency natives don’t quite understand what makes a video game really work. This is the reason why gamers are against NFTs and cryptocurrencies.
On the other hand, we find the natives of video games. Which tend to overlook the great value-added potential of blockchain technology for the video game industry and hold misconceptions about NFTs.
So, this ends up labeling the two sides: crypto natives are “greedy tech brothers”. Whereas gaming natives are labeled as “dense gamers”.
The reasons why gamers or players are against NFTs and cryptocurrencies
Play-to-Earn: An Unscrupulous Pyramid Scheme Built on a House of Cards
Games are a way of entertainment. Players are against NFTs. The reason? It is because they enjoy these to relieve the stress of daily life, similar to going out with friends or watching a movie. Basically, it’s about the fundamental principle that makes a game, basically that, a game.
Play-to-Earn (P2E) or play-to-win games present the wrong incentives to their potential players, one where entertainment and fun is sidelined for financial reasons. When NFTs or tokens are sold as a precondition to being able to play a game, players will not buy them for their in-game utility. Instead, they do so as a speculative investment with the expectation of profit.
The problem is that we are in a time where blockchain games are full of unsustainable games, where the demand is fueled mainly by financial motivations. Where the fun and entertainment of the game is adrift.
Axie Infinity and similar games
A great example of this is Axie Infinity, early adopters put down money to buy Axies and play the game, then make money playing and withdraw their winnings (driven by outside money coming in, driven by new users), the cycle keeps going until that is not left, new money enters to enter and compensate for the old money that leaves. With the passage of time, everything stops and the users who did not sell will have to pay the final bill. It would be a pump and dump scheme, but disguised as a video game.
But let’s not take it the wrong way, paying for a game, whatever it is, is correct and everyone does it if they can. Here the important thing is the motivation behind the purchase, which has to be strictly the utility of the game and not the speculative intention.
Of course, we made it clear that spending $100 on an Axie has a different meaning than spending $100 on cosmetic items, like skins in LoL or builder’s huts in Clash of Clans.
Let’s see, a blockchain FPS game with the best interests of its players at heart could make the decision to go for a game cycle where all weapon NFTs are downgradable and limited. First, people mint the weapon directly from the game for a fixed price, avoiding speculative intent. The weapon will then degrade and become less powerful the more it is used in the game (utility).
In this way, such a mechanism ensures that every purchase of the game’s NFT weapon is not financially motivated, all else being equal; scheduled attrition means secondary prices are almost always going to be cheaper than the prices of an in-game meta.
Video games should be played for entertainment and fun. Financial incentives, if they exist, have to be secondary and not primary. As long as “Play to Win” is still used as the main hook. The true value-added potential of blockchain gaming is never going to be enough to make it a mainstream genre. In this way, the huge gap between cryptocurrency natives and gaming natives will continue to exist.
Giving you added value: in-game items like NFTs
As we always say, NFTs can stand for anything. What it represents and how the representation is applied will depend on very human factors: the social usefulness of BAYC’s NFTs will depend on their community. In the same way, the functional utility of blockchain domain NFTs depends on the number of integrations and associations that the associated domain name protocol can attract.
So following the previous point, the social utility or function of NFTs in a video game is not really too different. They will depend on the game itself. If this were not the case, we would find ourselves with an unusable token in the block chain, which has no use at all.
We are going to ask a series of simple questions: What do we have left of our NFT if the underlying game is suspended? What happens if the developers decide to stop updating the game? What if they decide to remove the item from the game that is supposed to represent our NFT? These are some of the reasons why lifelong gamers are against NFTs and cryptocurrencies in their favorite games.
Simply put, NFT games are more like access passes to an in-game item. Contrary to popular belief, they do not allow immutable ownership of game elements. If the game is no longer functional, then our NFT will no longer represent anything.
Are NFTs still good for the gaming industry?
Representing in-game items as NFTs provides the opportunity for the item to be freely traded with anyone. For example, Steam allows the exchange between game elements, but they are very subject to terms and conditions thanks to the fact that it is centralized, additionally, it is inefficient. Trading game items within the same system is one thing, while trading game items across different ecosystems is another.
For 100% understanding. We can trade our CS:GO (Steam) skin for a Fortnite (Epic Games) skin. But we are going to have to use a P2P matchmaking service.
We send the CS:GO skin to the other person’s Steam account, they agree to send the Fortnite skin to our Epic Games account. In case the transaction requires cash, the sender transfers the money through a recipient’s bank account.
If the two masks were represented in the form of NFTs; the challenges that appear in the game ecosystem of an element, become irrelevant. Because the operation would be done on the blockchain.
Transaction fees will be too low no matter where each actor is located or what gaming ecosystem each element is in. Additionally, the nature of smart contracts in the NFT markets ensures that the risk of scams is minimized considerably and without centralized intermediaries.
Additionally, the nature of blockchains would allow in-game NFTs to fully harness the power of DeFi. For example, it would be possible to promise our in-game NFTs to be used as collateral to be able to apply for a loan, even wrapping it with rental functionality. Basically, when renting to someone, the NFT can be automatically returned when the contract expires or in the event of default.
The need for evolution of P2E games
So we depend on the NFT standards to evolve for them to really work. In this way, the elements of the games could become interoperable with each other. Imagine a strategic partnership between game A and game B, an NFT weapon in game A might have the power to redeem an NFT sword in game B, if the weapon in game A reached level 50, for example.
This requires an enormous evolution that is still a long way off. But a game can choose to represent in-game items as NFTs, though it should subject its virtual economy to external market conditions. The problem is that it could have consequences that cannot be imagined in the gameplay of the game itself.
Thanks to all this fragility and complexity, the vast majority of games would be better off not worrying about NFTs and cryptocurrencies in general. The game has to have a certain magnitude for the effort to really be worth it. Although a blockbuster MMO might find blockchain integration, but the same cannot be said for any casual mobile game.
