Blockchain games are still very niche and not many people know about non-fungible tokens or NFTs. The number of blockchain players is nothing compared with the traditional video games market. In addition it’s a small market within the bigger crypto community. Blockchain games have a major potential to reach a mainstream audience during the early 2020s, and digital ownership over non-fungible tokens will help with that.
The next few years are important for blockchain game developers to really put themselves out there. Quite frankly many game studios can’t survive on only one thousand players per day. The development of better blockchain technology, easier on-boarding and higher quality gameplay is needed to push the market further. It’s the whole discussion about scaling solutions and financial use cases, but these are issues in regards to the blockchain. When it comes to game development and the implementation of NFTs we’ll definitely see growth. There are good reasons to expect a blockchain game to reach mainstream success within the next few years.
Quick introduction into NFTs
Blockchain games use so-called non-fungible tokens. These tokens are owner by players and represent an in-game asset, for example a collectible card or a powerful sword. Such a non-fungible token, or NFT in short, will often be called a digital collectible, but it’s not just a collectible. These NFTs can be used for much more:
- Redemption codes, gifts or coupons
- Tickets for concerts, cinemas, and other events
- To underline the authenticity of products, including art and fashion.
- And of course for digital collectibles and in-game assets.
Non-fungible tokens represent ownership over an item, and this item can be for one-time use or for eternity and physical or digital. Above everything these non-fungible tokens can be represented as a graphic inside an app. This can be a concert ticket in a special app, or a virtual sword inside a game. Because an NFT is graphic by nature, it makes it very easy to understand.
Perfect fit for gamification
Over the past few years we’ve seen gamification all over the place. Within gamification people get to earn points for certain tasks, they need to compete with each other, and there are rules within the game world. Gamification is basically the basis of every marketing campaign that involves a little bit of fun.
Through AR application like Pokémon Go this type of digital marketing also finds its way into our real world. Even physical products have a sense of gamification to them, by offering limited edition versions and exclusive products within fashion, sneakers and collectible cards.
NFTs are a perfect way for brands to get their name on the market, while in addition creating value. Think about the NBA working on a collectible game with Dapper Labs, and about the upcoming Formula 1 game by Animoca Brands.
Virtual worlds & interactive marketing
In 1995 Alpha World became the first virtual world in which players could walk around and interact with object in a digital city. The concept inspired virtual worlds like Second Life, PlayStation Home. To some extend these worlds have become much more interactive, allowing players to construct anything they want in for example Minecraft.
These digital playground are key for blockchain game development. In the past 25 years people have learned how to walk around in digital 3D worlds. They’ve become acquainted to digital ownership. Gamers have spend hundreds of hours inside digital worlds, ranging from The Witcher 3 to World of Warcraft, and from EVE Online to Minecraft.
True digital ownership in virtual world is the natural next step. In this market Decentraland, Cryptovoxels, and The Sandbox are the projects that are standing out. They have both created virtual cities where players can buy virtual land and build or display anything they’d like. Anybody can visit these worlds on desktop, mobile or with a VR headset.
Within these virtual worlds players can build whatever they want, but other blockchain gaming companies get to do the same. This virtual worlds allow third party developers to promote their own blockchain projects. There’s a shop for the blockchain game CryptoPunks inside CryptoVoxels, while an upcoming movie of Shaun the Sheep will be promoted inside The Sandbox. These virtual worlds will also make it possible to buy concert tickets, book flights and do all kinds of purchases in the real world.
Currently Cryptovoxels is selling virtual land with prices going up to 260 ETH or even 456 ETH, which equals 64 thousand dollars. Land owners are free to build whatever they want on their land, expanding their business in the virtual world or building a showcase for their digital wealth.
Digital art becoming valuable
In the coming years digital collectibles won’t only be used as in-game assets, but they will also become a personal shrine for gamers. Collectors will attach great value to the most rare digital items, showcasing them in their virtual museums. In addition there’s already a rise in popularity for digital art.
At the moment two current digital art platforms stand out: SuperRare and KnownOrigin. They trade hundreds if not thousands of digital art pieces per month, and this digital art can in turn be used inside virtual worlds. Prices for these digital art pieces have been increasing in recent months.
A digital image called “AI Generated Nude Portrait #7 Frame” was sold for 16.5 ETH ($2326). The most expensive piece was sold for 70 ETH ($9870), while most pieces sell for anything between 0.5 and 4 ETH, which is 70 to 564 dollar.
As there will be more ways to showcase digital art, there will also be more demand for it. Don’t be surprised if specialized screens or tablets will be used to hang digital art on a physical wall in the near future.
Multi-platform key to success
At the moment many blockchain games are desktop based, while some of them also embrace mobile devices. At the same time there are mobile games, that don’t have a desktop version. To make things even more complicated, marketplaces for NFTs are often only accessible or optimized for a desktop experience. In the coming years marketplaces will become optimized for mobile devices, while every decentralized application and blockchain games especially will become multi-platform.
As a result gamers can access a game on any device, all by using the same wallet and private key. In addition mobile game development is already easier for developers because a mainstream audience doesn’t have that much expectations. We all like to play a simple game on our phone, but expect a higher quality game experience when playing on PC or console.
At the moment the mobile version of a decentralized app seems to be the most important. Some companies develop different versions of their game to tailor the experience, others build a web-based game that works the same on both mobile devices and desktop. In the near future there will be companion apps for desktop games, true multi-platform game experiences, while marketplaces are always accessible.
Marketing will improve
Even though I adore the blockchain gaming space, it’s still very simple when it comes to marketing. Marketing is mostly all about placing banners and have influencers talk about a product. However, non-fungible tokens allows for so much real world applications. A1 Fighters is an upcoming battle royale game that serves as a platform to promote blockchain projects and their tokens. The same concept can also be tied into alternate reality games, like Pokémon Go or the work of the Reality Gaming Group. Last year Vodafone already organized a real world treasure hunt for digital items and ultimately an iPhone.
There are plenty of examples of blockchain games doing collaborations with other blockchain games, like for example Axie Infinity getting its own piece of land in The Sandbox. Or certain Cryptokitties also becoming an item in Gods Unchained. These are simple collaborations and basically serve as technical showcase for major gaming corporations embracing blockchain games. Imagine finding a limited edition sword in World of Warcraft that will automatically give its owner a special skin in Call of Duty.
In the future gamers will be able to join an airdrop for NFTs by scanning QR codes on billboards at the bus station. Buying Kellogg’s cornflakes will give people a chance to win a digital token by scanning a code inside the box, and so on. You will even be able to win a ticket for a concert by completing a special quest line inside an online game. The possibilities are limitless, and can be applied across different products ranging from in-game assets to tickets.
Still in the early days of NFT
Non-fungible tokens have been around since 2017, when Cryptokitties had its major breakthrough. In those three years platforms like Enjin have made blockchain development a lot easier, while also introducing the concept of the multiverse. Despite all this, we are still in the early days on non-fungible tokens.
In the near future there will also be legal complications, like we are seeing right now with cryptocurrencies. For example, some digital assets might infringe trademark patents. These are difficult situations that require changes in the law, but also adaptions from a technical perspective. Perhaps it will be possible that some NFTs won’t be used in certain applications.
Right now we still call them NFTs, and quite frankly it’s an awful name. I’ve already seen people use the nickname nifties, which sounds pretty decent. Gaming culture will come up with a nickname for these non-fungible tokens. It’s likely that the mainstream audience will truly popularize it. Whether that will be nifties, nefties, or nofties is all up for grabs.
Also published on Medium.