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NFT games via the blockchain – preferably in the smartphone

Non Fungible Tokens (NFTs) have taken over the game world. Items, weapons, skins or characters can be bound to NFTs. Gamers are delighted. Mobile blockchain games on cell phones are trending. We uncover the background of NFT games.

The gaming sector is one of the largest entertainment industries in the world. In 2020, it is even expected to have generated more revenue than the film, sports or music industries. According to MarketWatch magazine, gaming revenues amount to 179.7 billion US dollars. Certainly, the Corona crisis had its share in the growth of gaming. However, such a development has also been apparent in America and England for years. With the release of the next-gen consoles Playstation 5 and Xbox Series S, this trend is to continue.

Smartphones as gaming devices

But it’s not consoles and PCs that make up the bulk of the American market. It’s mobile gaming that generates the most revenue. At $87.7 million, the mobile market accounts for about 48 percent of the total market, according to MarketWatch. Initially ridiculed when it comes to video games, smartphones have become popular gaming devices. This is due to the following reasons, among others:

  • Distribution plays a role. Not everyone owns a PC, Switch, Playstation or Xbox.
  • But there is a smartphone in almost every pocket.
  • But there are also financial reasons: Many smartphone games follow a free-to-play model. They can be downloaded and played for free. At the same time, they offer the player advantages or additional features if they pay money.

The world of gaming NFTs is emerging

NFTs, blockchain and video games go together in many ways. The new technologies can offer gaming and gamblers something this industry often lacks: Trust. Non-fungible tokens can create clear ownership and also offer gamers in America or countries like England new ways to participate in virtual worlds. At the same time, NFT Games are not even new. Back in 2017, CryptoKitties caused bottlenecks on the Ethereum blockchain. The so-called CryptoKitties are virtual cats, gaming NFTs based on Ethereum. The kitties can be interbred to breed more unique specimens. This creates a supply of exclusivity. The most expensive cat to date was worth $170,000 (have also a look at our list of the craziest NFTs).

How digital goods and gaming fit together

Yet such deals would be inconceivable without the collateral on the blockchain. The ownership of crypto cats is clearly written down in the distributed legder. The smart contracts on the platform regulate the buying and selling of the gaming NFTs. There is no need for a central authority. Digital goods worth millions can thus be exchanged quickly and without bureaucracy.

An attractive aspect is the fixed scarcity. This applies to both developers and players. Many games in the area of online multiplayer draw their appeal from the acquisition of items, weapons, skins or characters. After missions and matches, players unlock them. And hope for the chance to get something special. What if a Fortnite played millions of times introduced a unique weapon of guaranteed limited edition? Tied to an NFT, this exclusivity would be written into the code and thus guaranteed. For the blockchain player, it’s a chance to own something truly unique – or sell it for a profit.

The blockchain needs gaming

Real estate trading has also discovered NFTs; you can buy art NFTs, horse tokens or shares in diamonds. And more and more laws are creating the basis for these transactions. Josh Chapman has his own take on the matter. Chapman is managing partner at Konvoy Ventures, a venture capital firm focused on e-sports and gaming. Gaming doesn’t need blockchain, Chapman says on his Medium channel. Rather, blockchain needs gaming. “There will only be mass adoption of blockchain once it makes a valuable contribution to the video game ecosystem.” He continued, “Within video games, tokenization is a 40-year-old concept. Blockchain Capital’s founders had great success trading digital assets on Second Life. Leveraging that experience, they recognized the value of the digital currency Bitcoin and invested heavily in it.”

Josh Chapman, managing partner at Konvoy Ventures.

Mass adoption of blockchain will only occur once blockchain contributes value to the video game ecosystem.

Josh Chapman, managing partner at Konvoy Ventures

Here’s how gamers can participate in the NFT market

Today, gamers invest a lot of time and money in their games. They spend hours leveling up their characters and unlocking equipment and skins. If one day you don’t feel like playing anymore, all that investment goes to waste. What if players could sell their achievements and characters to other players as gaming NFTs? World of Warcraft and many other multiplayer games show that there is a market for this. Some players profitably sell their characters, accounts and other items for real money. This approach is not only controversial from a legal point of view, it is also frowned upon within the community. With NFTs, developers can at least create clear conditions and define what the tokens can be used for.

Sales of video games worldwide

The games market is growing: in the first quarter of 2021, the Chinese company Tencent was in first place. With a global turnover of around 8.2 billion US dollars. Sony and Apple follow in the other places (see table).

Revenue in Mio.
Source: Statista

Advantage for players: Own weapons and skins

Another advantage for players: thanks to NFTs, they are really the owners of the digital goods. The differences with regular games are as follows:

  • In regular games, the weapons, skins and characters are still owned by the game and the companies. If the game takes away the unlocked goods, then the players cannot do anything about it.
  • With gaming NFTs, on the other hand, it is even theoretically possible to cross-chain them. If the bridges exist, they may be able to be used in other games.

“Play-to-Earn” and Computer Gaming NFTs

“Play-to-Earn” describes a model where players can earn gaming NFTs by simply playing the game. In-game currencies are nothing new in gaming. A computer game NFT, however, is a blockchain-based cryptocurrency. Developers can control the number and distribution of items and resources within the game world by tying them to NFTs. Players complete tasks and play the game, for which they receive these items and resources. Or they trade the resources and items inside and outside the game world. This makes it possible to sell the gaming NFTs on marketplaces and earn real money.

NFT player with console
Blockchain games are spreading because NFTs bring benefits to players.

Examples of NFT games

The most sought-after gaming NFTs are called “LAND.” They are basically exactly what the name implies: LANDs. A presale of LAND in April 2020 raised more than $450,000. We give you some examples of NFT Games below:

  • “Gods Unchained” – the online card game: This is an online card game on the Ethereum platform. The game is free-to-play. Players compete against each other with different decks of cards. The cards themselves are non-fungible tokens. Players can buy them from other players or win them by winning matches. In an interview with GamesBeat, Robbie Ferguson, co-founder of Immutable, said, “The most important thing we’re working on is tools for mainstream developers. The tools will allow NFT games to be used without having to worry about blockchain.”
  • “Axie Infinity” – Collecting monsters on the blockchain: Axie Infinity is a Pokémon-style NFT game. Players breed monsters and pit them against each other. Each monster is a unique NFT. They also have their own DNA. The genetic code determines the creature’s strengths and weaknesses. Therefore, the monsters called “Axies” are indeed unique and leave their genetic traces in their descendants. Have a look at our axie infinity tutorial.
  • “The Sandbox 3D” – Virtual assets as NFTs: The Sandbox 3D is a virtual world based on voxels. It can most easily be compared to Minecraft. The world consists of a wide variety of virtual assets, all of them gaming NFTs. The game gives players the tools to create their own assets. These can be monetized and their own games created based on them.

We have also an instruction manual for the sandbox and a tutorial für socios.

Not every blockchain game is based on NFTs

Some games do not work with NFTs, but only run on blockchains like Ethereum. Smart contracts are critical here. They handle the trading of in-game currencies. These cryptocurrencies serve as a means of payment in the virtual world, for example. Many blockchain games run on Ethereum and can be played via the browser. The MetaMask wallet serves as a connector.

FAQ – Frequently Asked Questions

What benefits do NFTs offer players?

Gaming NFTs are unique digital assets with unique ownership. In games, players unlock different characters, cosmetic items, weapons and more. Ultimately, however, these still belong to the game developers. With computer game NFTs, players become co-creators and owners of the goods.

Which blockchains do NFT games run on?

As is so often the case when it comes to tokens, Ethereum is ahead of the game. Many blockchain games run on the Ethereum blockchain. They use the ERC20 token standard for proprietary cryptocurrencies and the ERC721 token standard for non-fungible tokens.

How do you get NFTs in blockchain games?

This varies depending on the game. In some, you get the non-fungible tokens and other cryptocurrencies simply by playing. By winning matches or completing tasks, players receive in-game currency. In others, players offer the NFTs in the in-game marketplace.

Alexander Naumann

Freelance Author | Master in Indology and Pre-Islamic Archaeology Areas of focus: Tokenization | NFTs | Cryptocurrencies | Blockchain Technology

Alexander Naumann

Freier Autor | Master in Indologie und vorislamischer Archäologie
Schwerpunkte: Tokenisierung | NFTs | Kryptowährungen | Blockchain-Technologie