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What is NFT Gaming?
Learn how NFTs are allowing players to own part of the gaming ecosystem.
The gaming industry has grown exponentially over the last decade and remains one of the fastest-growing industries worldwide. However, while the traditional gaming system primarily benefits developers, a new breed of blockchain-based decentralized gaming applications are now allowing users to capture and own part of the gaming ecosystem. The development of these new blockchain-based games has been predominantly driven by one sector – NFTs.
NFTs, or non-fungible tokens, are cryptographic tokens that live on a blockchain. However, unlike cryptocurrencies such as BTC or ETH, these tokens are non-fungible. While BTC can be exchanged for any other BTC, NFTs cannot be readily exchanged for other NFTs. They also cannot easily be exchanged for goods and services. Instead, NFTs were designed to represent ownership of a unique asset, such as collectibles or rare items. The 2021 NFT boom has seen NFTs represent ownership of a whole host of collectibles including digital artwork, memes, GIFs, website domains, event tickets and gaming accessories.
By utilizing NFTs and blockchain technology, game developers have been able to create games where users can contribute and take part in an on-chain monetary ecosystem. By incorporating NFTs, players are able to sell in-game characters or accessories and even generate passive income through play-to-earn models. The Game-Fi industry is becoming so popular that many now believe it will become crucial to the mass-scale adoption of cryptocurrencies.
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.
How do NFT games differ from regular games?
Traditional gaming is usually broken down into mobile, console and PC categories. Each requires players to invest in expensive gaming equipment and in the games themselves as well as in any subsequent in-game experiences that are otherwise off-limits until further payment is made. This means that for the majority of regular games, monetary value is only flowing in one direction – to the developers.
NFT games allow for a much more expansive monetary system, with value flowing to developers, to players and between players. Built on the blockchain, NFT games allow for decentralized gaming platforms that allow player asset ownership. Players can actually own and trade in-game characters or accessories and utilize in-game cryptocurrencies. All transactions that take place are then recorded on the blockchain. This drives a much more transparent gaming economy for everyone.
NFT games are usually accessed via a web browser, very similar to other decentralized applications (dapps). The games are composed of a series of smart contracts, created by developers, that define the rules of NFTs used within the game. Once a connection to a cryptocurrency wallet is made, users are free to begin playing with their NFT characters.
How to get started with NFT gaming
Getting started with an NFT game requires a few things: a game, a cryptocurrency wallet and some cryptocurrencies.
First of all, you need to pick a game to play. You may choose a game that offers the best gameplay or a game that offers the best chance of earning rewards. Popular titles currently available to play include the following:
- Axie Infinity. Axie Infinity is a Pokémon-inspired digital world where users collect, train and battle creatures called Axies. Each Axie is represented by an NFT, with each creature exhibiting unique aesthetic and battle characteristics. Built on the Ethereum blockchain, users can earn Small Love Potions (SLPs) and Axie Infinity Shards (AXS) from gameplay as well as trade Axies with other players.
- Gods Unchained. Gods Unchained is a strategy game based on tradable NFT cards. Players must strategically build a card deck to battle other players and win rewards. By winning battles, a player earns Flux, which can subsequently be used to power up NFT cards or exchanged for cash.
- Zed Run. A horse racing-inspired digital game that allows all players to own a racehorse. Each horse is represented by an NFT that holds unique characteristics that either enhance or lessen its ability to win horse races. Horse races take place every day with US dollar prize money up for grabs. Racehorse owners can also collaborate and breed to create new horses.
- Sorare. A winner among soccer fans, Sorare is a fantasy soccer game that allows users to manage a virtual team. The team is composed of individual players, which are each represented by an NFT. Players can earn ETH by participating in tournaments.
Although this list highlights some of the most popular games currently available, there are many more to choose from.
Once you have chosen a game, to begin playing, you will need a cryptocurrency wallet and some cryptocurrencies. Most NFT games require a connection to a digital cryptocurrency wallet so that in-game transactions can take place. Examples of digital cryptocurrency wallets include MetaMask, Portis and Fortmatic. Check out our ultimate cryptocurrency wallet guide for more information.
After setting up a cryptocurrency wallet, you will then need to acquire either cryptocurrencies or NFTs – whatever your chosen game requires. If you need to buy some cryptocurrencies, such as ETH, head over to one of the many cryptocurrency exchanges. Once you have some cryptocurrency, check out some of the key NFT marketplaces to acquire some in-game NFTs and get started.
How to make money with NFT gaming
There are 2 broad ways to make money with NFT games. The first is through a play-to-earn model. The second is through in-game NFTs.
Play-to-earn, as the name suggests, offers users the ability to earn income simply by playing a game. Usually, players are rewarded with in-game tokens. The tokens are often needed as part of the in-game play but can also be exchanged for cash value.
Axie Infinity has become one of the most popular play-to-earn games amassing thousands of users worldwide. The game requires users to purchase 3 Axie NFTs to begin playing. In the game, the play-to-earn objective is to collect Smooth Love Potions, or SLPs, which can then either be used for in-game upgrades or actually sold via cryptocurrency exchanges. Some players that have been playing the game since launch are now earning $1,000s per month.
Alternatively, in-game NFTs offer another mechanism for making money. This involves collecting or acquiring NFTs that either represent collectibles or characters within a game. Collectibles or characters are then valued based upon unique characteristics such as appearance and utility. CryptoKitties is an NFT game that has thrived based upon an in-game NFT system.
While there are some games that focus on either play-to-earn or in-game NFT models, the majority utilize a combination of both to offer the best experience for players.
Can I lose money with NFT games?
As simple and enjoyable as it is to earn money from playing games, players can also lose money. The amount will depend on the game being played and the mechanics of the game.
NFTs, by design, are used to represent unique items. These unique items will fluctuate in value depending on the market at the time. The same is also true for any in-game tokens. Earning money from NFT games remains extremely speculative. A user should only invest what they are willing to lose.
Compare marketplaces to buy and sell game NFTs
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Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
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