After the success of Axie Infinity, many games built on blockchain platforms were developed continuously. NFT Game projects such as Decentraland, Axie Infinity, Gala, The Sandbox, Enjin, etc. are more interesting than ever. So what is NFT Game and what is the difference between the NFT Game and the Traditional Game? Let’s find out through the following article.
What is NFT Game In Detail?
First of all, Game NFT is a phrase referring to games developed on the blockchain platform. It is a combination of two terms gaming (Game) and finance (Finance).
Simply put, you join a game on the blockchain platform and can earn income from it. This is similar to playing traditional games and then selling items to earn money. The difference here is that you use blockchain technology, NFT, characters, or items you can trade on markets (Marketplace) and earn cryptocurrency.
NFT Gaming projects run on the blockchain’s distributed ledger, allowing players to take ownership of virtual in-game items. Contrary to the traditional game where users play to win, NFT Gaming projects adopt a Play to Earn model.
In contrast to the traditional Game, the NFT Game rewards players more for all the time and skill they play. And unlike traditional games, they actually own the assets they earn in the game. Of course, thanks to the blockchain, allows them to trade it on different crypto markets.
The Beginning and Development of the NFT Game
The concept of Game NFT appeared in its infancy in early Minecraft servers integrated with Bitcoin, or online games like Bombermine and peer-to-peer services that allowed gamers to earn money from online activities.
At the World Blockchain Conference held in China in November 2019, the founders of blockchain gaming firm MixMarvel highlighted the possibility of using blockchain technology to revolutionize the gaming industry. electronics. Then the term “NFT Game” first appeared in September 2020 in a Twitter post by Andre Cronje, a well-known figure in the blockchain world and the founder of Yearn Finance.
The term has since become widely used to refer to video games that incorporate elements of blockchain-based decentralized finance. The appeal of games in general coupled with the unique features of cryptocurrencies has made Game NFT an extremely attractive new field.
The first NFT titles used the Bitcoin blockchain, but the low transaction fees and speeds spurred the adoption of the blockchain that powers smart contracts. It’s Ethereum.
Game developers used Ethereum extensively and it is still popular today. But there are performance issues due to limited block space. This vulnerability was evident when the popularity of CryptoKitties clogged the Ethereum network in 2017, causing Ethereum’s fees to skyrocket.
CryptoKitties took advantage of the newly defined ERC-721 standard to represent in-game assets in the form of nonfungible tokens (NFTs). Since then, interest in NFT has been growing and performance-optimized blockchains have been launched, creating tremendous innovation in the NFT Game sector exponentially.
How Does the NFT Game Project Work?
- In-game items such as avatars, land, costumes, weapons, gold, tokens, and pets are represented as NFTs, proving ownership of these digital objects.
- Gamers obtain these items through gaming and can trade them on the NFT marketplace for profit, or exchange them for crypto and then exchange for fiat.
- NFT games are distinguished in many different forms. Thereby, the mechanism by which players can generate revenue through their play will be different.
Features of the most popular blockchain game
- Play to Earn: Players receive rewards for completing in-game objectives. The funds awarded in these Play to Earn titles are typically derived from a reserve of Native Tokens held in the smart contract.
- Asset ownership: Digital ownership of unique assets creates economic opportunities that were not possible before.
- Defi features: some NFT Game projects provide passive income. They come in the form of DeFi features, including Staking, Yeild Farming, Liquidity Mining.
- Blockchain Technology: The original NFT game was built on the Bitcoin blockchain. However, with the expansion and increasing complexity, it becomes necessary to move to blockchains based on building with Dapp, like Ethereum, Solana, etc.
Difference Between Traditional Game and NFT Game
NFT gaming, like every other blockchain-based trend, has begun to shake up the traditional online gaming industry. Combining DeFi, NFT, and blockchain technology elements, Game NFT brings a breath of fresh air to this game genre.
The difference between NFT games and traditional games is the ownership of assets, the traceability of those assets, and the transparency of data.
NFT Game projects assume different forms, but most popular crypto and NFT games have features that set them apart from traditional online games. Specifically as:
- Play to Earn Model: Traditional online game that makes money through in-app purchases, affiliate marketing, and advertising. NFT Game projects, users can make money by selling in-game items and earning cryptocurrency.
- A New Approach to Game NFT: Game NFT projects allow players to add real-world value to their in-game purchases. In-game products and items are stored on a distributed public ledger or blockchain running on a blockchain network. This blockchain technology allows in-game tokens and items to be traded into cryptocurrency and eventually actual cash.
- Little or no upfront cost: Most NFT Game games are free to download and play, which makes them more accessible than traditional games. Although there is no upfront cost, some games may require you to purchase in-game tokens, characters, and other items to get started.
- Ownership of in-game assets: NFT Gamers own the assets and NFTs. These will be stored on the blockchain for life. This is in contrast to traditional games, which can be closed at any time, causing gamers to lose all of their in-game assets.
The risks of participating in the NFT game market
When participating in a money-making game, participating investors have 2 main methods: Buy tokens to speculate and wait for the price to increase for profit or play games to receive cryptocurrency.
- The biggest risk is that the project development team may suddenly disappear with investors’ money.
- Even if a developer sticks to his project, high volatility in the price of tokens and NFT assets can still make investors lose money.
- In addition, players may also run the risk of being tricked into transferring items to a scammer’s address or being lured into sending a certain amount of money to activate the item. Unlike the traditional game industry with a management company, in NFT games it is difficult for players to get back lost items.
- Some NFT Game developers have also been criticized for their lack of transparency, making investors angry.
NFT games have been and are a trend worthy of attention in the blockchain world. It is a breakthrough compared to the traditional online game genres as before. Currently, this trend is still and will continue to grow stronger and stronger.
Benefits of NFT Games
NFT games have gained significant attention in recent years, revolutionizing the gaming landscape with their unique features and advantages. Let’s delve deeper into the benefits of NFT games and explore why they have captivated the interest of both gamers and investors alike.
Ownership and Asset Value
One of the most enticing aspects of NFT games is the concept of true ownership. Unlike traditional games where players have limited control over in-game assets, NFT games grant players the ability to truly own their digital items. Non-Fungible Tokens represent distinct and indivisible assets, allowing players to possess unique in-game items, characters, or virtual real estate. This ownership extends beyond the game itself, as NFTs are stored on a blockchain, providing transparency and security.
Additionally, NFTs offer the potential for asset value appreciation. As scarcity is inherent in NFTs, rare and sought-after items can increase in value over time. This aspect has created a new market for collectors and investors, with NFTs being bought, sold, and traded on various platforms. The ability to not only enjoy the gaming experience but also potentially generate a return on investment has attracted a diverse audience to NFT games.
Another notable advantage of NFT games is the concept of play-to-earn. Unlike traditional games where players invest time and effort without tangible rewards, NFT games provide opportunities for players to earn real-world value through gameplay. By participating in these games, players can acquire valuable NFTs, which can be sold or traded on secondary markets.
This play-to-earn model has the potential to create more equitable gaming ecosystems. It allows players from all backgrounds to benefit from their gaming skills, bridging the gap between professional gamers and casual players. In some cases, individuals in less affluent regions have been able to earn a substantial income by engaging with NFT games. This income generation potential has captured the interest of those seeking alternative sources of income or looking to monetize their gaming expertise.
Enhanced Gaming Experiences and Customization Options
NFT games offer enhanced gaming experiences through increased customization options. Traditional games often limit customization to predefined in-game options, but NFT games empower players to personalize their characters, items, and virtual spaces. By utilizing NFTs, players can own and trade unique, rare, or limited edition assets that reflect their individual tastes and preferences.
This increased level of customization not only enhances player immersion but also fosters a sense of individuality and self-expression. Whether it’s customizing character appearances, designing unique virtual properties, or crafting exclusive items, NFT games enable players to create personalized experiences that resonate with their identities and aspirations.
Furthermore, NFT games have the potential to enable cross-game compatibility, allowing players to carry their NFT assets across multiple gaming platforms. This interoperability opens up exciting possibilities for collaborations between different games and developers, further expanding the potential for unique and immersive gaming experiences.
Challenges and Limitations of NFT Games
While NFT games have introduced exciting possibilities and garnered significant attention, they are not without their challenges and limitations. It’s important to examine these aspects to gain a comprehensive understanding of the potential drawbacks associated with this emerging gaming trend.
One of the primary concerns surrounding NFT games revolves around their environmental impact. NFTs rely on blockchain technology, which often utilizes significant amounts of energy, particularly in proof-of-work consensus mechanisms like those used in cryptocurrencies such as Bitcoin. This energy consumption has raised concerns about carbon footprints and sustainability.
As the popularity of NFT games grows, it is crucial for developers and platforms to explore and adopt more environmentally friendly alternatives. Transitioning to greener blockchain technologies, such as proof-of-stake consensus mechanisms, can help mitigate the ecological impact and make NFT games more sustainable in the long run.
Scalability Issues and High Entry Barriers
Another challenge associated with NFT games is scalability. Currently, many NFT games are built on Ethereum, the most widely used blockchain for NFTs. However, the scalability limitations of Ethereum have resulted in network congestion and high transaction fees, making it less accessible for players with limited financial resources.
High entry barriers, including the costs of acquiring NFTs and participating in these games, can also limit the potential player base. The value of certain NFTs can be prohibitively expensive, preventing some players from fully engaging in the NFT game ecosystem. Additionally, the technological requirements, such as owning compatible digital wallets and understanding blockchain processes, can pose challenges for those new to the space.
To address these limitations, there is a need for technological advancements that enhance scalability and reduce transaction costs. Additionally, fostering inclusivity by creating more affordable entry points and simplifying user experiences can broaden access to NFT games.
Regulatory and Legal Considerations
The regulatory landscape surrounding NFT games is still evolving, and there are several legal considerations that need to be addressed. As NFTs represent unique digital assets, issues related to intellectual property rights, copyright infringement, and ownership disputes may arise. Clarifying the legal frameworks and establishing industry standards will be essential to ensure the protection of creators, players, and investors in the NFT game ecosystem.
Furthermore, the potential for fraudulent activities, such as fake or counterfeit NFTs, poses challenges to the integrity of the market. Implementing robust verification mechanisms and transparent marketplaces can help mitigate these risks and build trust within the NFT game community.
As the industry continues to develop, collaboration between game developers, regulators, and legal entities will be crucial to establish clear guidelines and address the challenges and legal complexities associated with NFT games.
Impact on the Gaming Industry
The emergence of NFT games has had a profound impact on the gaming industry, reshaping traditional models and empowering both developers and players. Let’s delve into the key areas where NFT games have made their mark.
Changes in the Monetization Model
NFT games have disrupted the traditional monetization model of the gaming industry. In traditional games, revenue generation primarily relied on upfront game purchases, in-app purchases, or subscription models. However, NFT games introduce new revenue streams through the sale and trade of NFTs. This shift allows developers to create sustainable business models, leveraging the unique value of digital assets and facilitating a direct relationship between players and developers.
Furthermore, the play-to-earn concept in NFT games enables players to generate income through their in-game activities. This dynamic monetization model has the potential to revolutionize the way players perceive and engage with games, as their time and skills translate into tangible rewards.
Empowerment of Indie Developers and Content Creators
NFT games have opened doors of opportunity for indie developers and content creators. Traditionally, the gaming industry has been dominated by established studios with significant resources. However, the advent of NFT games, with their decentralized nature and focus on player-driven economies, has allowed independent developers to thrive.
By leveraging NFT technology, indie developers can create unique in-game assets and monetize their creations directly, without the need for intermediaries. This democratization of game development provides a level playing field and encourages innovation, fostering a diverse range of gaming experiences that cater to a wider audience.
Additionally, NFT games have empowered content creators such as streamers, influencers, and artists. Through collaborations with developers or by independently creating and selling NFTs related to the games they engage with, these creators can monetize their influence, creativity, and fan base, further enriching the NFT game ecosystem.
Potential for Cross-Platform Integration and Interoperability
NFT games hold the potential for cross-platform integration and interoperability. Traditionally, games have been confined to specific platforms, limiting player experiences and interactions. However, NFTs, being blockchain-based assets, can transcend these boundaries and allow for seamless integration between different games and platforms.
This interoperability can enable players to use their NFT assets across multiple games, expanding their utility and value. For instance, a unique sword acquired in one NFT game could be wielded by the same character in a completely different game, enhancing player immersion and providing a cohesive gaming experience.
Moreover, cross-platform integration can foster collaboration and partnerships among game developers, encouraging the sharing of assets, game mechanics, and player communities. This interconnectedness has the potential to create a vibrant and dynamic gaming ecosystem, where players can explore diverse worlds and experiences while retaining ownership and control over their assets.
Community Engagement and Governance
One of the noteworthy aspects of NFT games is the emphasis on community engagement and the implementation of decentralized governance models. Let’s explore how these elements shape the player experience and foster a stronger bond between players and developers.
- Active Community Engagement
NFT games prioritize community engagement, creating an environment where players feel heard and valued. Developers actively seek player feedback and encourage open dialogue through various channels, such as forums, social media platforms, and in-game chat systems. This direct line of communication enables players to voice their opinions, suggest improvements, and contribute to the ongoing development process.
Community engagement goes beyond mere feedback collection. NFT games often feature special events, tournaments, and competitions designed to bring players together, fostering a sense of camaraderie and friendly competition. These shared experiences create a vibrant community that shares a passion for the game and cultivates a sense of belonging.
- Decentralized Governance
Decentralized governance is a key component of many NFT games, giving players a say in the decision-making processes that shape the game’s future. Through voting mechanisms or consensus protocols, players can actively participate in determining game updates, balancing changes, new features, or even the direction of the game’s narrative.
By involving players in the decision-making process, NFT games establish a stronger sense of ownership and agency among the player community. This participatory approach not only strengthens the bond between players and developers but also ensures that the game’s evolution reflects the collective desires and interests of its dedicated community.
- Transparency and Trust
Community engagement and decentralized governance models promote transparency and trust within the NFT game ecosystem. Open communication and regular updates from developers instill a sense of transparency, helping players understand the development roadmap and the reasoning behind specific decisions. This transparency builds trust and confidence among players, fostering a positive and cooperative relationship between developers and the community.
Furthermore, decentralized governance models rely on the principles of fairness, accountability, and inclusivity. By ensuring that all stakeholders have a voice and influence in shaping the game’s direction, these models foster a sense of ownership and shared responsibility. This collaborative approach establishes a more equitable power dynamic, where players feel valued and developers actively work towards meeting their expectations.
Above is our explanation for the question “What is NFT Game in Crypto World“. Hopefully, after this article, you will understand this method exactly. Wish you all success and see you in the next guides at our site.