10 you Need to Know about Games with NFTs
I have a much longer write-up on the opportunity Games and NFTs, but for those who don’t have time for a deep-dive, I’ve put together the…
I have a much longer write-up on the opportunity for Games and NFTs, but for those who don’t have time for a deep-dive, I’ve put together the following list of ten things you ought to know:
Game makers are creating entirely new forms of fun, enabled by the unique properties of NFTs.
Six properties NFTs have that non-NFT virtual items don’t: true ownership, provable scarcity, provable provenance, permanence, programmability, decentralization.
Highly controlled economies is a feature of many games. Crypto fans often don’t understand this. But game designers also miss on the fun resulting from decentralization.
People want to permanently own their collection. This is partly why a Black Lotus (most valuable card in Magic: The Gathering) sold for $511,000 recently (for a non-digital game).
Early MTG demonstrated community decentralization. The pre-digital community invented multiplayer versions of play. Some game studios will be “collectible first,” where the community expands upon the experience.
Decentralization means empowering your community: fewer middlemen (like ad networks) and more powerful fans to help you along your mission, and helpers to aid in discovery.
One super-power of NFTs is provable provenance. Some items gain value because of who held them, not just utility and scarcity. Think esports, streamers, key devs, original artists, etc.
Another super-power of NFTs is the unique emotions associated with true ownership (vs. the suspension of disbelief of a virtual item). These emotions can only be simulated in other games.
One difference between NFT-based games versus digital art is gas fee tolerance. An art collector might be willing to pay a $100 gas fee to buy a $1,000 piece of art, but won’t pay $100 to pick up a game item that might only be worth pennies.
Games need microtransactions, and microtransactions require cheap+fast blockchains, so don’t build games on Proof-of-Work (PoW) chains (like the current Ethereum) which is expensive, slow and may be ecological unfriendly. Options include layer-2 solutions (like Efinity from Enjin), purpose-built (WAX, Immutable, FLOW) or if shipping >1 year consider next-gen (THETA,ALGO,ADA,AVAX,DOT).
Did the above list whet your appetite? If so, maybe you’re ready for the long version: Game Economics, Part 2: NFTs and Digital Collectibles.