What are NFTs and what they mean to the video game industry
SEGA, Square Enix, Take-Two, Electronic Arts, Ubisoft, Zynga and others are betting on blockchain-based technology, with investments and speeches that don't make it clear how it will affect video games.
During this year, many people learned what are NFTs, as NFTs dominated media headlines and social media discussions. It's a buzzword, a new technology that's going to change the world. The video game industry has not been slow to do this. This week, Phil Spencer, head of Xbox, condemned non-fungible tokens : "there's a lot of speculation and experimentation [...] it feels more like exploitation than entertainment."
Over the previous months and weeks, some major companies in the sector have announced that they are researching, investing in, and/or developing a merger between NFTs and video games. Electronic Arts, Take-Two, SEGA, Square Enix, and Zynga all talked about it in their financial reports, that is, to shareholders. However, the developers and employees of large companies in this sector are not interested in this technology. As games-as-a-service, DLC, social games, and other seasonal terms have flourished with more or less success, investors rub their hands when they hear about it.
On the other side of the scales are the players and video games themselves. Users are wondering, firstly, what is an NFT; secondly, how will they affect the hobby they enjoy; and third, the threat that technology poses to the future of the planet we live on. When it comes to video games themselves, the question is what kind of innovation can be gained from both a creative perspective and a marketing and monetization perspective.
NFT technology and blockchain have been around in the video game industry for over three years, although it wasn't until 2021 that the terms hit media headlines like this one. But before we get into that, we're going to explain what we mean by these abbreviations and these anglicisms. Check also: The emergence of cryptocurrencies is an irreversible fact that must be taken into account and studied
Blockchain and NFTs: Decentralized Digital Capitalism
Blockchain is the system that allows cryptocurrencies and NFTs to exist. It's a huge network that certifies that a digital item, whether it's a currency like Bitcoin or Binance or an image, belongs to a specific person or organization. This membership is not controlled by a government or private organization, but by each of the nodes in the network, which makes falsification almost impossible.
Our colleague Alberto González from Vandal Random makes a comparison that helps us understand how it works: “[...] imagine for a moment that when we buy a car, the invoice that certifies this transaction, instead of being only in our wallet, was in all those wallets of those car owners. If someone wants to cheat us or falsify this invoice, they will have to change all the invoices issued to date.
An NFT, or non-fungible token, uses this technology to ensure the uniqueness of an image, GIF, soundtrack, video clip, or even a video game element. Obviously, you can see, for example, that unique image on social media or an auction house's website, take a screenshot and say, "well, I already have it, it won't be that unique." But it's not yours. Whether it's a limited-edition action figure with a specific serial number or a first-print comic from the 70s, an item has value because of its ultimate scarcity: there is only one. The reason millions of dollars are paid for digital goods, as in collectibles, is speculation.
The promise of blockchain is nothing new in video games
Axie Infinity was launched in 2018. This is not the only game that uses NFTs as there are many others such as CrpytoKitties , Plant Vs Undead and Wanaka . However, he is the most successful. Players of the title created by Sky Mavis buy unique monsters (which are NFTs), train and improve them in battles and sell them to other players.
The game grew in popularity by 5,000% from April to October 2021, reaching over two million daily active users. As of November 2021, it costs about $1,500 to start the game, which is to buy one of its creatures, forcing new players to ask for loans from experienced players, to whom they then have to pay a high percentage of commission. possible benefits they receive.
