Several major game studios attempted to portray non-fungible tokens (NFTs) when cryptocurrency prices reached all-time highs as the next big thing in late 2021. After a few months, falling prices and criticism from gamers and workers have dampened those euphoric feelings.
Crypto assets were expected to provide gamers with the ability to own their in-game digital goods while also providing publishers with a new source of revenue. The truth, however, has proven to be more complicated.
NFTs Lead to Scarcity and Exclusion
Speculative assets, such as NFTs or in-game cryptocurrencies, have a significant impact on game dynamics and player expectations. Whether they are magical weapons or robot costumes, these assets are financial goods. They contain a certain amount of speculative risk, which includes the possibility of both gains and losses. Their presence in a game causes both producers and players to become investors.
Mojang, a Microsoft-owned video game developer, claimed that NFTs lead to “scarcity and exclusion.” The Minecraft creator prohibited corporations from building worlds on blockchain networks or game-related NFTs, effectively putting an end to several ongoing projects.
Mojang said in a July blog post.
“NFTs are not inclusive of all our community and create a scenario of the haves and the have-nots.” “The speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profiteering, which we think is inconsistent with the long-term joy and success of our players.”
Axie Infinity’s Best P2E Game
One of the most well-known blockchain-based games, Axie Infinity, allows users to earn and obtain Smooth Love Potion in-game tokens. These tokens can be traded on exchanges for cryptocurrencies or turned into fiat currencies like the US dollar.
Axie players must pay to produce those early prizes. To be eligible for the play-to-earn, or P2E, concept, players had to first obtain three NFT “monsters.” At its peak in July 2021, that would have cost close to $1,400, or about $446 per NFT. Profits were estimated to be around $700 per fortnight.
Guilds, which were popularised in games like Axie, are a throwback to the cooperative grinding for rare items that teams used to engage in classic games like World of Warcraft. In exchange, guild leaders were given a permanent share of their teams’ bitcoin earnings, sometimes as high as 90%, in exchange for footing the bill for the so-called scholars to play the game.
In one of the largest crypto industry attacks ever, hackers stole nearly $600 million from the Ronin Bridge that connects different blockchains https://t.co/PjFgHDKRJa
— Bloomberg Crypto (@crypto) March 29, 2022
The March hacking incident on Axie, in which hackers stole over $600 million, made it difficult for players who relied on the game for income to get their money back. The public figure who popularised the “play-to-earn” model rebranded the subgenre as “play-and-earn” to reflect the shift in focus from making money to having fun with the game.
Funding for NFT Development
Interoperability, a hypothetical future in which players can use an item purchased in one game in another, was one of the main arguments for funding NFT development. Players may gain ownership tokens for the goods they win. It will allow them to carry their magic swords and robot outfits between games and potentially profit from selling them in the future.
Most cryptocurrency games have struggled to juggle incompatible game engines and art styles, competing for blockchains and carefully licenced intellectual property franchises. Despite some of the blockchain experiences, like Alien Worlds, Decentraland, and The Sandbox, trying to harmonise their platforms.
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Author: Ali B
Ali is a professional live webinar speaker and derivatives (cryptocurrency, forex, commodities, and indices) analyst. He brings a broad range of skills to help beginners evaluate financial data and investment trends, carry out technical analysis, fundamental analysis, and make an informed decision on the best ways to strategize their investment