Could NFTs bring gaming into the "real world"?

Parents who wish their teenage or young adult offspring would stop spending so much time on computer games and do something useful with their life might be about to eat their words. NFTs, or non-fungible tokens, have arrived in the world of gaming, and they could be starting a revolution that's more lucrative than these upheavals usually are.

For some, NFT gaming – also known as “Play to Earn” - is an opportunity to finally earn money from their WoW (World of Warcraft) skills; others are interested in cashing in on an emerging trend by investing in the best NFT stocks.

Whether you're asking "what is NFT stock" because you're considering NFT stocks to buy, or you're a dedicated gamer who's wondering what's happening to the gamespace, it's worth staying informed about the evolving relationship between gaming and NFTs.

What are NFT stocks?

NFTs are digital tokens based on blockchain. They can be used to authenticate any digital asset, making it possible to prove ownership over digital assets, like digital art, avatars, or in-game weapons, for the first time. This opens up a whole new realm of possibilities to buy, sell, store, or trade digital goods just like you can with physical, real-world assets.

Top NFT stocks could include NFT trading platforms, companies that secure the underlying blockchain code, and companies making NFT games and NFT digital assets.

What happens when NFTs and gaming get together?

What's exciting is that once you introduce NFTs, gamers can truly own the items they build, unlock, or earn in a game.

Up until now, whatever you gained in a game really belonged to the game owner, not the player. You might be able to trade a unique ability with another player within the game, but you can't take it off-platform and sell it on eBay, and if you can't sell it to whomever you like, it's questionable whether you really own it. NFTs open up a new wider marketplace for in-game assets, transforming them into assets, period.

With NFTs, the money that players sink into games can turn into an investment that pays off financially. Some people see this as the liberation of gaming serfs: up until now, they've been toiling for the feudal platform owner, but now they can keep the assets they earn.

Is it really possible to earn money playing games?

The confluence of money-making and gaming are still evolving, but essentially, yes. NFTs are introducing a new income model called "play to earn."

Currently, people who make money from gaming do so by "performing" on a platform like Twitch, winning contests, or monetizing their reputation through promotions for companies. But now it's possible to earn money from the gameplay itself.

Some "play to earn" games already out there include:
— Guild of Guardians, an RPG (role-playing game) where players can buy and sell weapons, tools, and character skins as NFTs;
— Gods Unchained, where players mint cards as NFTs;
— Sandbox, where players buy and develop digital "land."
— Axie Infinity, where you collect, raise, breed, battle, and trade digital creatures.
— Alien Worlds
— SplinterLands
— Aavegotchi
— Blankos

This is just scratching the surface of the possibilities of NFT gaming. Business models that may appear in gamespace in the near future could include hiring out your WoW character as a mercenary, developing and selling digital "homes," and designing fashions for avatars to "wear."

How does "play to earn" gaming work?

Most Play-to-Earn games are free to download and usually free to play. The ownership over assets in the game economy, and often times their necessity and utility as part of the game, create two opportunities for monetization: “grinding” (whereby a person invests mostly their time and skill in an attempt to earn NFTs that they can sell) and “trading” whereby users ‘play the market’, buying low and selling high, or providing other services. Not so dissimilar from real life. Some games let you sell those NFTs for either the in-game cryptocurrency or another, while others let you cash out directly in USD (such is the case with Upland).

Some players sink their own money into the game, and earn, buy, and trade on the platform, but there's a new tranche of financial backers known as Guilds, who "sponsor" players with their own assets and NFTs in exchange for a share of their earnings.

The NFT gaming revolution is still on the way

NFT gaming is very new, so there are still a lot of kinks that need to be ironed out before "play to earn" becomes a full-time career. There's general agreement that despite the growing number of games, we haven't yet found the "killer app" that will bring NFT gaming to the mainstream.

Gamers complain that the gameplay on NFT games tends to be weak, with earning money seeming like the point of the game rather than a bonus to the game. The NFT gaming network is still developing, and gamemakers need to find ways to integrate earning NFTs more smoothly into the gameflow.

There are also unanswered questions about how revenues will be shared between players and the platform, and a need to develop norms around how and where trade takes place. Some are concerned that wealthy players could buy their way to the top, turning "play to earn" into "pay to win." Once you can win by pouring money in, the joy leaks out of the entire game.

But NFT gaming could be unstoppable

That said, NFT stocks have let the genie out the bottle in the gaming world, and there's no going back. NFT gaming infrastructure is growing, with new blockchain networks appearing, and new gaming platforms emerging, all of which is helping the networks mature.

Blockchain technologies are scaling, to lower the risk of the CryptoKitties fiasco in 2017, when the game's popularity caused congestion on the entire Ethereum blockchain. Celebrities are adopting NFT gaming, attracting more people to try it out for themselves, and as uptake increases, gamemakers feel reassured that it's worth committing to improving NFT games.

It's too early to say what this could mean for NFT stock price across the long term, but investors who are excited by the potential of NFT gaming and like to be part of cutting-edge technologies might feel a renewed interest in selecting an NFT stock from an NFT stocks list.

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Investing involves risk. Principal loss is possible. As an ETF, the fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. The Fund is not actively managed and would not sell a security due to current or projected under performance unless that security is removed from the Index or is required upon a reconstitution of the Index.
The Index, and consequently the Fund, is expected to concentrate its investments (i.e., hold more than 25% of its total assets) in the securities of Crypto and Blockchain Companies. As a result, the value of the Fund’s shares may rise and fall more than the value of shares of a fund that invests in securities of companies in a broader range of industries.
The mechanics of using blockchain technology to transact in digital or other types of assets, such as securities or derivatives, is relatively new and untested. There is no assurance that widespread adoption will occur. A lack of expansion in the usage of blockchain technology could adversely affect Crypto and Blockchain Companies. Transacting on a blockchain depends in part specifically on the use of cryptographic keys that are required to access a user’s account (or “wallet”). The theft, loss, or destruction of these keys could adversely affect a user’s ownership claims over an asset or a company’s business or operations if it was dependent on the blockchain.
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The BITA Next Gen NFT Index is a rules-based index that consists of the common stock (or depositary receipts) of companies that are building a platform or developing technology to use, or have at least one use or test case for using, NFT (Non-Fungible Token), cryptocurrency trading platforms, cryptocurrency mining, cryptocurrency banking or related services, or blockchain-related technology, as well as companies that have announced publicly that they intend to enter such space or have begun working on such products (collectively, “Crypto and Blockchain Companies”). The Index consists of companies listed on North American and European exchanges and aims to capture the potential upside generated by earnings related to the adoption of crypto- and blockchain-related technologies, including NFTs and cryptocurrency.
NFTZ is new with a limited operating history.
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