Understanding NFTs Part 2: The Role of NFTs in Gaming

We continue our series about NFTs, diving deeper into the topic of NFTs in Games.
If you have missed Part 1: Understanding NFTs – check it here.

The integration of Non-Fungible Tokens (NFTs) into the gaming world represents more than just a technological advancement; it signifies a fundamental shift in the way digital assets are perceived, owned, and exchanged. NFTs introduce a novel concept of digital ownership that resonates deeply with core values cherished by gaming communities, such as rarity, collectibility, and personalization. With blockchain technology at their heart, NFTs bring a level of authenticity and ownership to digital gaming that was previously unachievable.

NFTs in games serve various purposes, enhancing the gaming experience in multiple ways. They can be used as digital collectibles, representing rare and limited-edition items like skins, characters, or weapons. The uniqueness and verifiable scarcity of these NFTs elevate their value and desirability among players. Beyond mere collectibles, NFTs also represent functional in-game items. This functionality enables players to truly own, sell, or trade their digital possessions, adding a new dimension to the gaming experience.

Characters and avatars created as NFTs offer unique, customizable experiences. Players can own these characters across different games and platforms, enriching the personal connection and continuity in their gaming journey. Furthermore, some games employ NFTs to denote ownership of virtual real estate, allowing players to buy, sell, develop, or even monetize these digital spaces.

Here are some real life examples of how games implement NFTs:

Axie Infinity

Digital Pets as NFTs: The primary use of NFTs in Axie Infinity is through the digital pets known as ‘Axies’. Each Axie is a unique NFT, meaning they have distinct characteristics and are individually owned on the blockchain. This uniqueness adds value to the Axies, as players can breed, raise, and trade them like collectibles.

Breeding System: Players can breed their Axies to create new ones, with the offspring inheriting traits from their parents. Breeding requires the use of the game’s native tokens (AXS and SLP), and the new Axie becomes a new NFT, owned by the player.

Play-to-Earn Model: The game employs a play-to-earn model, where players can earn rewards in the form of cryptocurrency and NFTs by participating in battles, quests, and tournaments. This model incentivizes active participation in the game.

Trading on NFT Marketplaces: Players can trade their Axies on NFT marketplaces, both within and outside the game’s ecosystem. This trading aspect creates an economy where the value of Axies can fluctuate based on rarity, traits, and demand.

Ownership and Control: NFTs provide players with true ownership of their in-game assets. Unlike traditional games where in-game purchases are tied to the game, NFTs in Axie Infinity can be retained, sold, or traded independently of the game’s future.

Governance Token: AXS, the game’s governance token, allows holders to participate in key governance votes and have a say in the direction of the game’s ecosystem.

Land and Other Assets as NFTs: Beyond Axies, the game also features land plots and other in-game items as NFTs. These digital assets can also be traded, and they play a role in the game’s strategy and economy.

The Sandbox

Virtual Real Estate as NFTs: In The Sandbox, players can purchase, own, and trade virtual land parcels, which are represented as NFTs. Each land parcel is unique and provides the owner with a piece of the digital world where they can create experiences and monetize them.

Asset Creation and Trading: Players can create digital assets such as buildings, characters, and other in-game items using The Sandbox’s voxel editor. These assets can be tokenized as NFTs and traded on The Sandbox Marketplace, providing a platform for creators to monetize their work.

Gameplay Integration: NFTs in The Sandbox are not just collectibles; they are integrated into the game’s ecosystem. Players can use their NFT assets within games and experiences built on the land parcels, enhancing the gameplay experience.

Decentralized Economy: The Sandbox fosters a decentralized economy where players have true ownership of their in-game assets, thanks to the NFT technology. This economy is powered by SAND, the platform’s utility token, which is used for transactions, staking, and governance.

Interoperability of NFTs: The Sandbox aims to support interoperability, allowing NFTs from other platforms to be imported and used within its ecosystem. This enhances the value and utility of NFTs as they are not confined to a single platform.

Governance and Participation: The Sandbox also utilizes NFTs and its SAND token for governance purposes. Token holders can participate in decision-making processes regarding the platform’s development and updates, giving them a stake in the ecosystem.

Collaborations and Partnerships: The Sandbox has collaborated with various brands, artists, and creators to launch unique NFTs and experiences within the game. These collaborations often result in limited edition NFTs, which can become highly sought after.

The advent of NFTs in gaming opens up innovative revenue models for developers. These include initial sales of NFTs, earnings from secondary market royalties, and fostering increased player investment in the game’s ecosystem. For players, the ownership and rarity linked with NFTs significantly boost engagement and investment in the game. This heightened level of engagement is not just limited to individual players but extends to the community as a whole. NFTs encourage the growth of a robust community centered around a game, as players trade, display, and converse about their unique digital assets.

In essence, NFTs are reshaping the landscape of digital gaming, offering unprecedented opportunities for developers and players alike. They are not just a fleeting trend but a pivotal element in the evolution of how games are played, experienced, and valued. The influence of NFTs is poised to grow, marking a new era in the gaming industry where digital ownership, engagement, and community building are paramount.

Stay tuned for the other articles from this 5 Part Series about NFTs. For those of you who are inspired by the potential of NFTs and are interested in learning more about how ORB can assist in navigating this exciting new territory, we encourage you to fill out our form here. Join us in this journey to the forefront of digital innovation in gaming, and let’s explore together the limitless possibilities that NFTs have to offer.