expressed opinion entrepreneur Contributors are themselves.
Video games are one of the few media that allows people to collaborate freely regardless of race, ethnicity, gender or geography. This universal appeal stems from the ability for players to travel through different dimensions and build their own stories as they unlock characters, weapons, and other in-game items. The allure of creating entirely new identities in another world fosters a deeper engagement with users than any other form of media.
Unfortunately, as it stands right now, game apps are built on a centralized infrastructure, with all in-game assets, user data, game logic, etc. stored in closed systems with full ownership entirely with the game company. This means that these games primarily operate by continuing the value stream, with players investing time and money just to increase the profits retained by game developers such as Activision, EA, and Epic Games.The gaming industry is expected to yield nearly $200B revenue in 2022 aloneshowing no signs of slowing down in the coming years.
In order to restructure the one-sided economic system imposed by traditional games, a type of blockchain technology called NFT could enable players to contribute to a fair ecosystem that embodies the values of ownership, interoperability and transparency.
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The famous first-person shooter Call of Duty spawned estimated hundreds of millions of dollars In-game purchase revenue for 2021 only. Even though these digital assets have been paid for, if Call of Duty experiences some downtime or is completely discontinued, players will not be able to use their assets, as they will only be accessible within the scope of the game. As such, players never actually experience ownership of any of their assets.
In contrast, NFTs exist independently of any single gaming ecosystem and live directly on the blockchain. So, no matter what happens to the game, in-game purchases in the form of NFTs can always be bought, sold or traded on the public market.
The autonomy of NFTs enables many use cases beyond commerce. For example, an NFT can be displayed outside of the game it was launched in. This allows owners to include their NFTs in their social profiles to build a reputation as an elite gamer, collector or degen. Gaming NFTs enable owners to extend utility beyond entertainment and become part of a larger effort to create unique digital identities.
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Before the introduction of blockchain games, games only existed on centralized servers. Therefore, in-game assets can only exist on their own game-specific systems and cannot communicate with other online applications.
For example, most people will eventually tire of one game and move on to another. When this happens, they can’t transfer any of the content they’ve unlocked in the game, thus throwing away all their hard work. Is it fair to make all their time, money and effort useless?
This lack of interoperability caused by siled ecosystems effectively divides the gaming world and ultimately punishes gamers. Instead, games have the opportunity to design for interoperability, thereby opening their ecosystems to network effects, as players of other games can also interact with their applications. For example, two games built on the Binance Smart Chain network can logically support the same in-game assets such as characters, weapons, and vehicles. As a result, games can see increases in customer growth, engagement, and satisfaction.
When players earn or purchase any in-game item, they cannot objectively assess its rarity, authenticity, and scarcity. Therefore, game developers implicitly need to operate as honest actors.
On the other hand, NFT will open a new era of game transparency. In-game assets in the form of NFTs can give owners free access to useful information, such as details about the uniqueness of the NFT, the total number of circulation, and indisputable evidence of the validity of the NFT. This transparency will greatly increase trust between buyers and sellers, potentially leading to a vibrant secondary market. Additionally, NFTs can provide more advanced data for avid gamers. For example, NFTs contain information including the number of past owners, average holding time, previous sale prices, asset creation dates, and more.
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The difference between traditional game assets and game NFTs is striking. A quick dive into the fundamental differences between the two can reveal just how efficient blockchain-based assets are at creating a more player-driven ecosystem.
In-game assets that are NFTs will, for the first time, enable games to provide utility far beyond what was previously thought possible. The beauty of in-game NFTs is that they bring the game world closer to the real world. Isn’t that the end?