As the non-fungible token (NFT) space as a whole has developed over the past few years, gaming has been a natural intersection between established technologies and NFTs. As Benzinga explains, “NFTs are digital tokens based on the 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. What's exciting is that once you introduce NFTs, gamers can truly own the items they build, unlock or earn in a game. ”
Established gaming companies like UbiSoft Entertainment (OTCMKTS: UBSF) and CCP Games have taken this approach, implementing gaming NFTs into existing game economies.
Play-to-earn games further elevate this concept, essentially making in-game currency into cryptocurrencies or tokens that can be bought and sold on crypto exchanges — most often decentralized exchanges (DEXs). In this sense, it’s possible to earn crypto by playing online games.
What Are Gaming NFTs?
Let’s take a look at what gaming NFTs look like in comparison to more typical NFTs using the highly popular play-to-earn game Axie Infinity as an example. Axie Infinity is a turn-based battle game where players use teams of three characters (called Axies) to fight other players, in a manner similar to that of games like Pokémon. The NFT aspect of Axie Infinity comes from the fact that the characters, the land and the in-game currency are all on the blockchain. Specifically, each Axie is an NFT with market values ranging from around $100 to hundreds of thousands of dollars.
Axies can be bred (increasing their market value) using AXS and SLP tokens, both of which can also be bought through most crypto exchanges. The caveat here is that the value of each of these things is contingent on the individual market for them, which is closely related to the price of Ether, which in turn is related to the state of the crypto market at large. In essence, gaming NFTs are a type of utility NFT that allows for the transferable ownership of in-game assets.
Best Gaming NFTs
To compare different gaming NFT projects, considering the chain that the project chooses to run on is very crucial. Different chains entail various transaction fees, with Ethereum’s gas fees being especially high right now. Because of this, projects on Solana, Polygon or Layer 2 chains will be cheaper to interact with in the long term, even if the initial buy-in cost is more expensive than that of an Ethereum-based project. What are some of the most well-known projects?
Axie Infinity: As mentioned above, Axie Infinity is pretty much the biggest gaming NFT project right now. Developed by Vietnamese game studio Sky Mavis, Axie Infinity uses Ethereum alongside an Ethereum sidechain called Ronin to improve transaction costs.
To get started playing Axie Infinity, you purchase three Axies to build a team. Building a competitive team can cost around $750, which is why Axie Scholarship programs (where a sponsor pays for Axie costs but takes a cut of earnings) are popular, especially in developing countries. Earnings in Axie Infinity can come from playing the game or from holding or breeding Axies to sell to other players.
Star Atlas: Star Atlas is a space-based grand strategy metaverse game that is built using Epic Games’ Unreal Engine 5 and has a token, ATLAS, on the Solana blockchain. The advantage to the latter aspect is the extreme speed and low transaction costs associated with Solana’s ecosystem, which spill over to Star Atlas’ accessibility and scalability as the metaverse potentially expands. As Star Atlas is built on Solana rather than Ethereum, you need SOL tokens, which can be easily purchased on most cryptocurrency trading platforms.
Cool Pets: Cool Pets is a quest-based NFT project that blurs the line between NFT art and games by adding elements of evolution and interaction to a profile-picture NFT project. Each NFT begins as an egg. Eggs cost 0.5 ETH and undergo various stages of development, hatching and growing into one-of-a-kind heroes that reflect the user’s interactions with the pet. The ecosystem has a token, MILK, that can be collected using quests and can be used to purchase items which ultimately influence the outcome of how a given Cool Pet evolves.
How to Buy Gaming NFTs
With knowledge of the most interesting projects and ideas in the space, here’s how you might go about dipping your toes and giving the gaming NFT space a go.
- Use a cryptocurrency exchange to buy Ethereum.
To interact with Ethereum-based projects, you’ll need ETH (similarly, for Solana based projects, you’ll need SOL), which you can purchase using fiat currency at any centralized exchange (CEX). Some of the most popular CEXs are Coinbase Global Inc. (NASDAQ: COIN), Voyager and Gemini.
- Transfer your ETH to a cryptocurrency wallet.
To do anything with these tokens, you’ll need to have direct control over them by setting up and using a browser-extension-based cryptocurrency wallet that allows your browser to communicate with Web 3 sites and protocols. One of the most popular options is MetaMask, but other options like Tally and some browsers like Opera and Brave have their own integrated wallets.
- Make your purchase.
Once you have control over your tokens, you can purchase the NFTs associated with your game or project of choice. The platform of choice for this depends on the project or blockchain in question, but if the project’s main page isn’t itself Web 3-enabled, and there’s no native marketplace, then the project is likely on OpenSea. The cost to enter is fully dependent on the project in question, with transaction fees that are generally determined by the blockchain that the project uses.
Will NFTs Take Over Traditional Gaming?
The NFT-gaming space holds the impressive potential to augment or disrupt the traditional gaming industry, especially with the highly publicized buyouts of traditional game studios over the last few months (Activision Blizzard and Bungie, specifically) gesturing towards metaverse adoption on the parts of industry giants. Meta Platforms Inc.’s (NASDAQ: FB) investment into the Quest VR ecosystem also bodes well for game development in that space. Studios like Ubisoft and CCP Games (the studio behind EVE Online) are generally posturing towards using NFTs in addition to existing microtransactions, which both developers and players alike perceive as a cash grab with minimal utility added to the existing games.
On balance, it’s unclear to the extent to which NFTs will impact all forms of gaming, but there’s clearly already a growing NFT gaming space. Below you can find some cryptocurrency exchanges that support Ethereum, so you can get your hands on gaming NFTs.
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Current Cryptocurrency Prices
As of right now, the cryptocurrency markets are responding to the Ukraine crisis, as both Ukraine and Russia are using crypto extensively in the conflict. As such, Bitcoin and Ethereum are currently rebounding from previous dips. The cryptocurrency market continues to be fairly volatile, so exercise caution when dealing with the cryptocurrency space, including the gaming NFT space.
Are Gaming NFTs A Good Investment?
To conclude, while gaming NFTs and play-to-earn games are subject to the volatility of the cryptocurrency markets in addition to additional volatilities of their own, the tokens associated with these projects will likely appreciate as the underlying games become more popular, which is obviously subject to a significant amount of speculation.
In general, if you like a play-to-earn or gaming NFT project, and specifically take interest in how it implements NFTs and adds unique utility to the game, then the tokens for the project might be a smart purchase. If you play the game or are interested in playing the game and would get utility from actually owning the NFTs, then feel free to buy the actual NFTs, maybe treating them like you would a normal microtransaction to temper expectations of returns.
Non-fungible tokens can be used in gaming for in-game items, such as land, weapons, skins and player abilities. These NFTs can be interoperable with other games, and users have the ability to sell their items on secondary marketplaces.
Yes, NFT gaming can be profitable, but you typically need to make an upfront investment to play the game. This is usually in the form of NFT characters, but can also be something like NFT land.
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