2021 will go down in history as the year when a JPEG file was sold for US$69 million, Jack Dorsey auctioned off his first tweet, and the Collins Dictionary made NFT its word of the year. The past 12 months have seen NFTs, or non-fungible tokens, burst from relative obscurity to a speculative frenzy, with everything from music, art and memes suddenly selling for inordinate amounts of money.
Representing a digital asset of just about anything, both physical and virtual, NFTs carry huge potential for gaming communities, especially as more players look to earn tangible benefits from their online endeavors. And thanks to NFTs, the ways we live, work and play will be forever changed.
How gaming got ‘meta’
As we enter 2022, the play-to-earn and NFT gaming model is set for yet another revolution that surpasses all current boundaries of traditional gaming: the metaverse.
Most people are familiar with the metaverse as an idea due to Mark Zuckerberg’s decision to rebrand Facebook as Meta. However, gaming communities are likely already familiar with the metaverse — especially during the past two years of pandemic-driven lockdowns.
Essentially, the metaverse is a digitally shared space that combines virtual and physical reality, allowing gamers to play and socialize in deeply immersive online environments.
Investors are clearly seeing its potential. Earlier this month, Binance, the world’s largest crypto exchange, invested US$1 million in blockchain game startup Star Sharks, which allows players to trade in NFTs in its virtual universe.
Meanwhile, games like Decentraland, a virtual property market funded by its own cryptocurrency, MANA, is exploding in growth since Zuckerberg’s announcement. Indeed, a plot of land within the game’s metaverse just sold for US$2.4 million worth of cryptocurrency: a staggering sum for an intangible property.
The economy of play
In gaming, an NFT can represent loot and virtual collectibles that have a value based on demand and rarity. Whereas in traditional online gaming, the virtual assets are property of the gaming company, NFTs are actual digital assets that players can choose to keep or sell using blockchain.
Now, with the boom in NFTs, gamers in Asia have the chance to even earn a living in the metaverse as monetizable values are applied to both identities and digital assets.
This form of gaming modeling, known as “play to earn,” has enormous potential to give greater ownership and control to Asia’s flourishing community of competitive gamers as well as a wealth of untapped income opportunities.
When players, such as those in developing countries such as Vietnam and the Philippines, earn in-game currency, they can either choose to purchase and trade NFTs within the game or sell them for a profit using either fiat or cryptocurrency.
Today, the likes of Axie Infinity, Gods Unchained and CryptoBlades are some of the most popular play-to-earn games. Indeed, more than US$1 billion has been traded on the Axie platform alone, making it the most valuable NFT project in the world. Thanks to NFTs, gaming assets gain ownership and a sense of scarcity allowing players to compete for real stakes within a virtual world.
Coping with growing pains of the metaverse
As a result of exorbitant deals like this, the metaverse and play-to-earn markets have come in for some heavy criticism, particularly around its lack of regulation and potential for copyright infringement. Many could be forgiven for perceiving gaming’s metaverse as something of a wild west.
However, like any industry in its nascence, time is needed for new ideas to permeate the popular consciousness, and incidental setbacks are inevitable. After the crash of the dot-com boom in the early 2000s, the internet appeared poised to fail and few could have predicted its role in our lives today.
Blockchain and NFTs are still in their rapid growth stages. Ignoring it today simply because it exists mostly on the fringes of the creative sphere is misguided. In fact, we could soon see NFTs impact everything — including music, sport and even fashion. However, what gaming has established in the world of NFTs is innovation, ingenuity and enthusiasm.
Nowhere have we seen this more than in Asia, where gamers are increasingly able to leverage play-to-earn models to both earn an income and even transform their lives. Once the rest of society realizes its value, the capacity for growth will be unstoppable.