Did you miss a session from the Future of Work Summit? Visit our Future of Work Summit on-demand library to stream.
This article was contributed by Olga Vorobyeva, VOX Consulting.
Nonfungible tokens (NFTs) have been around for almost four years and are growing in popularity among hardcore cryptocurrency investors. But in 2021, their total market cap grew from $55 million to more than $7 billion, according to NFCGO.io. Ninety percent of this growth has occurred within the last four months.
OpenSea, the largest NFT marketplace, has grown into a major player in gaming. In 2021, the company reported total revenue of around $10 billion, with the vast majority of that coming in the past year. This was due to a $3.4 billion transaction volume in August driven by a frenzied interest in artistic NFTs. So-called GameFi is increasingly becoming part of the OpenSea business model.
No matter how big that number sounds, it’s not a lot compared to standalone blockchain-based games. Axie Infinity, an NFT-focused video game developed on the Ethereum network, surpassed $1 billion in total trading volume in August 2021, perhaps the most prominent 30-day period in NFTs history.
With so much interest in NFTs, it’s only natural that developers have started to develop the infrastructure necessary to handle what will no doubt become a huge secondary market for these assets. Additionally, holders want real tangible benefits for holding NFTs, and in a crowded gaming market, new entrants need to differentiate themselves to survive.
2022 is likely to be the year that NFT gaming becomes more mainstream, especially now that many crypto investors own these assets. And true innovation, not just in NFTs, but in the gameplay and mechanics themselves, will be the driving force.
While NFT games offer players an opportunity to make money while playing their favorite games, the industry lacks a social component. The advantage of owning an NFT asset is that it is yours and you should be able to use that asset where you want. Here are three innovations driving the success of NFT gaming today.
VR and AR
It’s no secret that virtual reality (VR) and augmented reality (AR) are the future of gaming. We got a taste of this technology with Pokémon Go, but that was just a harbinger of things to come. VR and AR offer a much richer experience than a 2D screen ever could; However, we still have work to do before the technology is fully operational. Smartphone-based AR applications are likely to gain traction in certain industries before VR becomes mainstream.
AR offers the ability to link a physical location to NFTs. As in Pokémon Go, users can visit a real-world location to interact with an object (an NFT in this case). Both AR and VR offer the opportunity to make these NFTs real. Imagine a game where you see, inspect, buy and use your NFT. An NFT can be a weapon in a tactical shooter VR game or armor in a medieval VR game.
Ultimately, user experience determines the success of NFT gaming. When connected to a virtual world, NFTs offer a richer experience than the current craze for digital art NFTs. 3D gameplay combined with functional NFTs (bulletproof vests, guns, pets, etc.) will revolutionize gaming. But it will take quite a bit of innovation before we can fully achieve that.
Creative distribution models and NFT gaming
The way rewards are distributed is key to attracting players to any ecosystem. Gameplay matters, closely followed by ownership and dividends for time spent on a given platform. Games like Axie Infinity are successful primarily because they are both a form of investment and entertainment. The play-to-earn (P2E) distribution model is more attractive to players as they are fairly rewarded for their time.
And some blockchain-based platforms even go a step further. Gamerse’s new “share-to-earn” offers players further incentives. Although P2E is much better than the old model, it still doesn’t provide players with decent rewards. The share-to-earn model is an innovation of the play-to-earn model that has worked well for many Web3 games.
As a cross-chain social platform for NFT players, Gamerse’s platform offers NFT game developers an easy way to connect with their users and the broader NFT gaming community. With the new share-to-earn model, group participation is rewarded and the APY return on the group’s holdings is determined by group activity.
Gamerse is also developing an aggregate NFT marketplace and platform for owners to buy and sell NFTs. Swipe Swap, a Tinder-like recommendation engine for NFT collectibles, learns player preferences over time and provides a smooth process for acquiring new NFTs within the app.
More games could adopt the share-to-earn model in the future, and new reward models will no doubt be a feature of the NFT gaming ecosystem. Players now expect to be rewarded appropriately.
The Evolution of Multi-Online Battle Arena (MOBA)
The Multi-Online Battle Arena (MOBA) game genre is red hot. League of Legends, Pokemon, and Mobile Legends are downloaded more than a million times a month, and their marketplaces generate millions in revenue for their developers each year. While this may be the most popular genre of all time, games are still based on a centralized architecture and we haven’t disrupted this industry for quite some time. Two of the most popular games, DoTA2 (2013) and League of Legends (2009) are old and need an innovation of their own.
MOBA development is imminent, and some blockchain-based MOBAs are lining up to disrupt the industry. An example is League of Ancients, which puts power back into the hands of the player. The League of Ancients (LoA) mission statement states that it strives to be the best MOBA ever while acknowledging the contributions of other hugely successful games.
Unlike MOBA games from the big developers, LoA is completely free to play. And more importantly, players have the opportunity to earn money while enjoying the gameplay. This is the opposite of other MOBAs that are designed to drain as much money from their customers as possible.
Players earn currency and NFT assets through battles. These assets can be used in-game, including skins that change the hero’s in-game abilities. Players can trade these assets with other players through an in-game marketplace.
LoA gameplay is based on two of the most popular MOBA games – DoTA2 and League of Legends. This is typical of this industry as it takes successful components from a map or game and adds new elements, themes, features, avatars and revenue generation models. LoA certainly won’t be the only blockchain-based platform looking to disrupt the MOBA industry, big as it is.
Other factors that contribute to NFT gaming success
Other elements could potentially play a role in the success of NFT games. It’s hard to ignore the ongoing COVID-19 pandemic, relevant even in a gaming article. But gaming has already proven its worth, with people who have lost their jobs making an income with platforms like Axie Infinity. The fact that gaming has become a legitimate source of income through NFTs is quite remarkable.
The quality of the blockchains on which NFT games are built should also not be ignored or suppressed. Most successful blockchain games have been developed on Ethereum, and this was the only place where this functionality was offered at an acceptable level. With high-performance chains like Solana and Binance, more features could be provided that directly support higher-quality games with the ability to serve many thousands/millions of online players in rich environments at any time. That or significant Ethereum upgrades.
We don’t know how much bandwidth is required for futuristic Metaverse games with complex NFTs. But it’s safe to say it will be significant. After all, games can only get better in proportion to the network they’re built on. However, there is plenty of room for excellent game design, and it’s more about mainstream acceptance than technological innovation.
An industry of innovation, not profit
People want something new. Blockchain utility adds a necessary level of interaction and ownership that could never exist before. Introducing these elements in new and novel ways has a huge impact on the entire industry.
As soon as someone does something interesting, this concept will be introduced in five established projects and 10 upcoming projects. The growth is incredible and innovation leads the charge, not profit or hype.
Olga is the founder of Vox Consulting, a marketing firm for blockchain, DeFi and NFT startups, and former head of marketing at SwissBorg – the first crypto wealth management platform (TOP-100 Coinmarketcap).
data decision maker
Welcome to the VentureBeat community!
DataDecisionMakers is the place where experts, including technical staff, working with data can share data-related insights and innovations.
If you want to read about innovative ideas and up-to-date information, best practices and the future of data and data technology, visit us at DataDecisionMakers.
You might even consider contributing an article of your own!
Read more from DataDecisionMakers