Cryptocurrency, gaming and Non-Fungible Tokens (NFTs) – those words have been the hottest in the tech space in the past year, as all have seen an unprecedented level of growth. According to VentureBeat, the gaming industry is expected to nearly double its current valuation to roughly $300 billion in the next five years, while the increasingly volatile Bitcoin remains at nearly 150% of its initial trading value in January 2021. And between NBA TopShots, Crypto Punks and major celebrities worldwide all getting in on their own NFT action, there may not be a hotter space in the digital asset realm this year (or next), as the NFT market reached $22 billion in 2021, up from just $338 million in late 2020.
Which leads to the logical next question for many experts: What happens when you combine all three?
Blockchain gaming is not brand new – the CryptoKitties game launched on the Ethereum network in 2017, leading to a record sale of a collectible cat for $117,000 – but it is expanding rapidly. In a traditional video game, a player would earn items, new characters, and upgrades throughout, however, if the servers crashed or their game broke, they had no recourse to continue owning those items because of the centralized ecosystem. But according to Binance that trend is starting to change, with more than 80% of all traffic on the Ethereum blockchain being “attributed to decentralized betting and gaming transactions over the last two years running.” This includes the biggest sale of an NFT ever (at the time) – the $1.5M (888 ETH) sale of nine digital plots of land in the blockchain game Axie Infinity in February 2021.
Players want to own their in-game items, and companies are obliging by leveraging the NFT model. Atari recently announced its first leap into the NFT space, creating a whole blockchain division that will focus on bringing this ownership to its games and launching its own Atari Token for players to buy and sell items on their network. Sony has followed suit with its highlight-anticipated Six Dragons launch for PlayStation 5, in which players can trade and sell more than 300 items on the Ethereum blockchain. Given that the current iterations of the myriad blockchain games are designed by start-ups or solo coders with simple gameplay, the increase in major developers creating highly produced titles that also offer NFT and cryptocurrency potential could be the key to an even wider acceptance of this decentralized gaming principle.
But outside of just owning in-game items in real life, what does a decentralized gaming platform offer players? Most importantly, transparency. Games that are online/offline in a traditional sense can be altered by clever coders, which leaves the traditional game player at a huge disadvantage in both competitive and casual play. The blockchain model allows for people to have the same gaming experience and doesn’t require as immense of spending to keep up with the Joneses. Yes, transactions can be volatile, and the fees can eat into profits when folks buy and sell, but the fact they can affect their real life with their purchases continues to drive the momentum.
Gamers want the best experience from the time they pick up their controller to when they turn off the screen, but with this advancement into NFTs and cryptocurrency, this could expand that window into an even bigger, 24/7 connection with the titles they love. Experts expect mainstream game publishers to start filling the market with titles that have this type of potential, but time will tell how the traditional gamer buys into the new marketplace.