Non-fungible tokens (NFTs) have become one of the most popular items in cryptocurrency over the past year. They have many different uses that range from a piece of digital art to items in games that exist on the blockchain.
This article will cover everything that you need to know about NFT games. As we said, there are a lot of different potential uses for NFTs, but using them as items in blockchain games has become one of the more popular uses for NFTs.
How NFT Games Work
NFT games are not difficult to understand.
First, all the games are multiplayer to some extent because they all exist on the blockchain. This does not mean the games are always player vs player. It just means that at a minimum there is a community you can interact with in order to trade items.
“Existing on the blockchain” means that all in-game recordkeeping is written to the blockchain rather than a company server.
A simple concept to understand – just apply the basic idea of cryptocurrency to gaming.
That covers the mechanics of blockchain gaming. It does not really cover why people actually play these games.
Play to Earn Gaming
Play to earn (P2E) gaming is not a new concept. This idea of people playing games in order to make money has existed for a while on MMORPGs like Runescape and World of Warcraft.
However, it is a little different with blockchain gaming because people are not selling in-game currency for money. Remember, on traditional MMORPGs like Runescape or World of Warcraft the player does not actually own any of their items from a legal perspective.
Blockchain gaming changes that because blockchain gamers actually own their in-game items.
This means it is possible and even encouraged, to play blockchain games for money.
This works because all blockchain games use NFTs for in-game items combined with their own native currency (usually an ERC-20). Those NFTs and tokens are stored in the gamer’s Ethereum wallet, which means they can do what they want with it.
Of course, not everyone plays these games to find a rare NFT that they can sell. But it is possible to do that and has given rise to a new class of gamers that play these games as a full-time job.
The money making potential of these games is probably not enough to live in an American city, but you can certainly make a good income in a lower cost of living country like the Philippines.
Popular NFT Games
There are actually quite a few NFT games. Not all of them are popular and quite a few appear to be straight up scams.
This is pretty normal behavior in a market that has not consolidated. The amount of NFT games will shrink as the market consolidates. There should also be less scams in a consolidated market.
Anyway, here are the most popular blockchain games that utilize NFTs.
Axie Infinity is a blockchain game that allows players to breed, fight, and trade virtual axies (axodotols). The axies come in the form of an NFT.
Axie Infinity is the most popular NFT game at the moment. It has actually garnered quite a lot of attention because people in countries like the Philippines and Vietnam actually play the game for a living.
They basically breed axies with the hopes of breeding a rare one or one with desirable traits worth a lot of money.
It’s an interesting concept for a game and the team behind it has made updates to the game to make it more fun.
On that note, the game was released in May 2018 by Vietnamese company Sky Mavis. So, the game has been around for a long enough time to gain some popularity.
Gold Fever is a newcomer to the blockchain gaming niche. The main selling point of Gold Fever, other than the play to earn concept, is that it has graphics significantly better than any other blockchain game.
We admit that the graphics on Gold Fever are not that great, but it is a definite step up when compared to the competition.
Anyway, we like this game because it will have a large world and should feel like an actual game that you would play on your computer.
Now, Gold Fever was launched at the end of 2020 and still has a long way to go on development. But it is one of the more promising blockchain games because it shows the true power of the blockchain.
Crypto Kitties is an NFT game that was launched in 2017 and quickly became popular. In fact, it became so popular that it slowed down the Ethereum blockchain enough that Ethereum developers realized Ethereum had a serious scaling problem.
CryptoKitties is a pretty standard blockchain game that allows users to breed virtual cats on the blockchain. Of course, these virtual cats can be worth quite a bit of money if they have rare features or other desirable traits.
Now, CryptoKitties has sort of died as a blockchain game with most of the kitties not being worth all that much money these days. The team has also started working on a different blockchain called Flow that will have all the kitties ported onto it.
We included CryptoKitties because it was the first blockchain game that gained a large amount of popularity. Many blockchain game detractors called the valuation of some of the kitties crazy, which is humorous to think about considering the current price of some NFTs.
The Problem With Most Blockchain Games
Blockchain games are not without problems. In fact, blockchain games probably have more problems than traditional gaming.
Again, it’s a new market that has not consolidated. A lot of these problems with blockchain games should resolve themselves as the market grows and consolidates.
It is basically the Wild West when it comes to blockchain gaming (and DeFi for that matter).
The biggest problem with blockchain gaming is that the fees are insanely high. Every interaction with a smart contract requires paying gas, so these fees can add up very quickly.
Some of the games also have native wallets that charge fees to use them.
Now, the gas fees are not so much of a problem on blockchains not named Ethereum. The only problem is that non-Ethereum blockchain games have far less users and the NFTs on those games are worth far less.
We will put it this way, gamers consistently groan about paying $60 for a game from a AAA studio or how microtransactions have ruined gaming.
Blockchain gaming basically takes those complaints and multiplies the intensity by 10.
The fees to get started on a game like Axie Infinity add up to anywhere from $600-$2,000 depending on the Axies you purchase and the gas fees when you sign up.
Users must also pay gas fees anytime they interact with a smart contract, which is often in blockchain gaming. You can think of that as macro-transactions rather than micro-transactions because paying $100 in gas fees is certainly not small.
Fees like that make traditional gaming sound cheap.
The other problem with NFT games is that the quality offered by them, in our opinion, is quite low.
They generally have bad graphics as they are turned based. For instance, Crypto Kitties was turn based and had no graphics other than a generated picture of a cat. The games that do have graphics tend to have poor graphics.
The good news is that this is changing with games like Gold Fever that have decent graphics.
All things considered, we would consider this a minor problem because developers will eventually figure out a way to incorporate AAA graphics with a blockchain server to track records.
Our biggest gripe with blockchain games is that they all utilize a native currency in the game. This has advantages for both parties, but it does become a little annoying.
The obvious advantages are that the price of the game does not vary depending on the price of Ether and that the developers can control the economy.
The problem with native currencies in crypto gaming?
It’s too open to manipulation. All a developer needs is a mint() function and they will be able to create an infinite amount of tokens to dump on the market.
It has happened before and will happen again.
Unfortunately, blockchain games using a native currency is something that will never disappear from blockchain gaming. The incentives for the developers to create a native currency outweigh the incentives to use a non-native currency for a game.
Will NFT/Blockchain Games Be The Future of Gaming?
Yes, blockchain games will be the future of gaming.
This will not be a short process, though.
Ethereum can handle about 20 transactions per second (TPS). It will need to handle a few million transactions per second before all gaming can move to the blockchain.
We would estimate that in 20 years a large portion of gaming will take place on the blockchain. The graphics of these games will be comparable to non-blockchain games.
This will become even more popular when hyper realistic virtual reality blockchain gaming becomes a thing. All the NFTs that people are buying now (ie. CryptoPunks) could be displayed in a hyper realistic VR house.
It would actually look very similar to Ready Player One at that point.
Is It Possible To Earn a Livable Income Playing NFT Games?
Yes, it is certainly possible to earn a livable income playing NFT games. This generally occurs with people that live in countries with a lower cost of living like the Philippines or Vietnam.
It is also most common with popular blockchain games like Axie Infinity.
This is only the tip of the iceberg with earning an income from playing NFT games, though. The book Ready Player One tells a story about a fictional world where hyperrealistic VR has given rise to a popular MMORPG/sandbox game that has NFTs and other tasks that players can do to earn income in the real world.
With that in mind, playing blockchain games to earn a livable income will certainly become a bigger thing over time as the games become more popular and the gas fees on Ethereum fall to a more reasonable level.
The timeline for this becoming more popular is likely by 2035 we will see a large amount of people playing blockchain games as a means to earn the majority of their income.
Well, that sums it up for everything you need to know about NFT games on the blockchain. These games might seem pointless at the moment, but that is simply because they are so new.
We will reach the point where almost everyone will at least know about blockchain games and a large portion of the population will earn their income from playing these games.
It will take some time for these games to become popular with a mainstream audience. However, it is only a matter of time before they become popular, so it is best to familiarize yourself with the games in order to stay one step ahead of the general population.