Although just a few years old, NFTs seem to have already run through a whole hype cycle, not once, but twice. They’re the future of art! No, it’s all a scam! No, this is the future of gaming! No, play-to-earn will kill gaming! What in the metaverse is going on?!

While non-fungible tokens in art are largely a speculative investment market, in gaming, things look a bit different. Instead of providing an ownership certificate that doesn’t do anything to differentiate the digital artwork from a copy in any practical way, NFTs enable real functionality that can change the gameplay experience. And although the headlines tend to focus on dollar signs, in most cases, it’s really not about the money. After all, most gamers want to enjoy their hobby — not work a second job.

What do NFTs actually do?

The point of the “non-fungible” in non-fungible tokens is that each one is not like any other. It’s demonstrably unique, and for many gamers, that in itself might start a tingle of excitement. So many games leverage the thrill of the hunt, motivating players to seek out rare items or build skills to earn them. NFTs can deliver blockchain evidence of that scarcity value, underpinning players’ bragging rights. But there’s so much more to it.

When in-game assets come in the form of NFTs, recorded on the (public and immutable) blockchain, their value is no longer tied to the game. They can be traded on independent marketplaces, and they can even be brought into other blockchain games. Of course, that does depend on the compatibility of those game platforms, but there’s a lot of work these days on blockchain interoperability. Especially with the metaverse rising on the horizon. 

In fact, there’s a strong argument that gaming is the vanguard of the metaverse — and NFTs will be a core part of metaverse economics and interactions. It’s about individuality. Differentiating your personal avatar is crucial for metaverse presence, but it’s also deeply meaningful for gamers. In both contexts, NFTs offer a way to customize your presentation and show off a little — or a lot. There’s a status aspect as well as simply the fun of self-expression. And the more your online persona reflects unique attributes of your personality — even if that personality isn’t quite the same as your offline self — the greater your attachment to that avatar, and to the world in which it moves. That deeper engagement is where the true value of NFTs lies, for game studios as much as for players. 

What’s in it for the players?

Much of the joy of gaming comes from the opportunities they offer for human connection, creativity and exploration. With rich fandom communities, the emotional reward can extend well beyond the time spent in gameplay. And the stronger the personal connection to your character, the deeper the immersion, the greater the satisfaction. 

NFTs add value at every level. Besides offering increased scope for individualization and making gaming achievements more tangible, they deepen immersion in the game world. In-game crafting can be cosmetic or utilitarian, but either way it gains a layer of excitement when you’re making something that can be sold or traded, in or out of the game; there’s the validation of having your creativity recognized and valued by your peers. 

Many blockchain games offer opportunities to explore and develop territories, whether in a familiar rural environment or on exotic planets. It’s a lot more worthwhile to spend time developing your parcel of gaming land or battling for resources if you know your assets are truly in your control — not at risk of deletion or obsolescence. Although NFT talk tends to focus on buying and selling, or “rewarding” players financially for the value they contribute to a title, ownership of in-game assets is about control far more than it is about economic value. Mind you, the real-world value doesn’t hurt; where old-school gamers may fondly recall selling their old video games for cash to spend on new ones, now it’s possible to fund in-game spending through in-game sales, or even generate passive income from action by other players on your virtual land

NFTs also offer a bridge into the real world, in that they can be used to provide access to exclusive fan events or be linked to physical souvenirs (much as fashion NFTs can entitle the owner to claim a hoodie or pair of sneakers in the real world). Conversely, a physical toy can come with a digital item for game use. Deeper immersion in the game and closer engagement with that game within the physical world all serve to increase player commitment as well as player enjoyment. 

NFT gaming commentary to date has largely focused on the costs and cash returns of collectible-based games. But the concept of “play-to-earn” is overemphasized. You can take the money angle if you want, but the potential of NFTs to change the gameplay experience is far more important. NFTs can root players more deeply in the game world, and extend the game into a wider environment. That’s so much more exciting than cash.