The introduction and adoption of non-fungible tokens (NFTs) in gaming remain a crucial point of discussion for developers, and the nascent segment is ripe with opportunities. However, experts also warn that there is a ‘right’ way to introduce NFTs into games and that not doing so could risk alienating the player base.
This was one of the major talking points at the Unbounded Capital Summit recently held in New York. A panel of veterans and innovators discussed the impact of blockchain on the gaming sector and how it is set to change the industry.
The panel was hosted by Jackson Laskey, (Senior Advisor at Unbounded Capital), and included:
- Tyler Farnsworth, Chief Marketing Officer at Built by Gamers;
- Adam Kling, Founder of FYX Gaming;
- Brenton Gunning, Founder/Creator of Run;
- Joe de Pinto, Co-Founder of Haste Arcade.
Kling said that when NFTs were first introduced into the gaming space there was uncertainty about how exactly they should be implemented and had very little to offer gamers in return.
‘That’s probably the bad (side) of it. They were really about extracting money, they weren’t entertaining and it was all about how to make money from it. It’s a very different paradigm of people growing up with games where they are about entertainment, challenge and community,’ he said.
‘This kind of merging of ‘play-and-earn’ and ‘play-to-earn’ is still a dynamic subject that will change dramatically (in the coming years).’
Boring is better when it comes to using NFTs in gaming
Kling noted that FYX Gaming uses its tokens to actually play the game and not to speculate on it. This allows gamers to trade with one another, he said.
‘They won’t really think about NFTs at all at that point. I think going forward in this industry that is where it needs to go – I don’t know if that’s where it is going to go. Playing a game you are not thinking about garbage pail kids or baseball cards – you are not buying them to flip (sell) them but because you enjoy them.’
The importance of utility in NFTs
De Pinto noted that Haste Arcade is one of the first companies to integrate NFTs into hyper-casual games on the internet.
He echoed Kling’s comments that NFTs are a natural fit for the gaming space and that gamers have been buying ‘skins’ and other in-game objects for a long time. He added that NFTs allow third-party developers to earn money for content that they sell on the Haste Arcade marketplace.
This also ties into the BSV blockchain’s innate ability to offer micropayments, with these creators paid anywhere from a dollar to 50 cents each time their content is bought.
‘We just saw that as a pretty easy opportunity to continue the theme of blockchain with utility. What can you actually do with this stuff as opposed to just buying a JPEG and hoping that someone else is going to pay more for it?’
‘I think it is pretty cool when you can actually create something and load it into the game as an NFT and use it. That’s what the original vision was and that’s what we built out.’
eSports and NFTs
Farnsworth said that up until now the integration of NFTs and eSports has been ‘terrible’, with most projects appearing ‘scammy’ and appearing to take advantage of their relatively young userbases.
‘They have not had a well thought out strategy and it’s been focused almost entirely on “value goes up mentality”. It’s a collectable that somebody puts money into on slow chains or very expensive chains.’
‘So by and large eSports organisations have actually walked that back because they have seen that it has not been received well and had a lot of backlash around it. Even the term “NFT” I think needs a rebranding.’
Despite this early negativity, Farnsworth noted that the world of digital goods and collectables has a massive future.
‘For us, we are seeing that there is so much opportunity in utility-based digital goods, and those opportunities unlock much more than what has been done in the space thus far.
This is an NFT connected to the player and allows us to track what’s going on, receive payments, and verify that they are who they say they are.’
‘There is also an opportunity for events and for gamers to showcase their level of fandom within the ecosystem. So there is so much more that can be done in this space.’