NFTs, Videogames and Digital Ownership
Want to understand the value of digital ownership? just ask gamers how much time they’ve spent playing games online.
Videogames are about to go through an unprecedented transformation.
And I am a 100% here for it.
The rise of blockchain technology and the introduction of Non-Fungible Tokens (NFTs) have opened a door that we (ok, I) have dreamed about for as long as online videogame communities have been a thing: ownership over our in-game items.
Thanks to NFTs, players are able to trade, sell and even rent (including playable characters) items that they acquire through playing a videogame. This means that if you’re playing something like Fortnite and you unlock an item that is an NFT, you can sell it in-game to other players, or list it in a platform such as Open Sea for the “general market”. It also means that you could transfer items into other compatible games, or even rent them to other players.
Granted, it still may be YEARS before we see a solid implementation of tools that will make renting that ultra rare weapon as easy as the touch of a button within your game’s interface. Regardless, the potential is unprecedented, and the possibilities for exponential growth for the videogame industry AND the lives of gamers everywhere is HUGE.
The ability to OWN your digital items means that in exchange for the “work” you put in-game (farming for items, completing dailies, grinding levels, etc.) you get something that is scarce (only a limited amount of NFTs are “minted” at a time), has economic value within virtual worlds AND the crypto-assets ecosystem, and that can have a practical utility in a “real world” context. Just look at all the amazing things happening with Axie Infinity, where you as a player don’t just get rewarded for winning games, you also OWN “the means of production”, which in this case are little pokémon-like critters. This is comparable to owning a racing horse, for example.
The ability to directly monetize the effort you spend playing videogames is a game changer for both the industry and for players.
Why am I so sure?
Through the years I have played enough online games to fully understand the value of online communities, virtual spaces and the immense value that is generated by their existence. I also had a TON of digital items… or should I say, I BORROWED a ton of digital items. All of them leased by giving away the most valuable of assets.
My time.
And that’s the biggest point I want to make here: when we think about playing videogames, “work” is probably the last thing that comes to mind. But, by definition “work” is nothing more than the exertion of physical or mental effort put towards a defined purpose, and y’all can’t tell me that spending an hour killing some random NPCs for an item with 5% drop rate is not work. The thing is that the reward for all that time and effort is a digital item that sure, it’s useful in the game, but it has little to no value outside of it.
And I can already hear my ears ringing from the push back against this argument. The biggest one being: games are PLAY, not WORK. And yes, this is true. However, why we play, the kind of games that we play and how we play them has changed dramatically over the last two decades. One thing is to play for learning and exploration, the way that small children do with their toys, and a completely different thing is to engage in an online social activity that fosters competitiveness, incentivizes players to spend their “real world” money in vanity items, and that it’s designed to be as addictive as possible because the more time players spend inside the game, the more money companies make.
Or what? Did you think Fornite is hosting on-line concerts because it’s fun?
In other words: you as a player in a virtual world (note that I’m writing SPECIFIALLY about online videogame communities here, not Super Mario or Tomb Raider, which are closed systems, not necessarily part of an online community capable of producing an economic value around in-game items) are exchanging the time it takes to do menial tasks for the final reward, which could be a weapon, some armor, a mount, etc. Getting the final item will feel really good, but that feeling is short lived, and you will just go around looking for something else to grind for.
Actually, let me tell you a story.
Once upon a time 20-year-old me spent approximately one hundred hours of her time in order to get a single in-game item. If I had been paid minimum wage for that time back then (2007) that would have translated to about $515 just to get the one item.
Now, keep in mind I played this game for almost 10 years and poured lots of effort into grabbing many other objects like it. But this particular one was my favorite because getting it took time, effort, and dedication. Receiving it felt like a real accomplishment, and flaunting it around other players felt like validation that I had done something “worthwhile” in the game’s virtual world.
It also looked cool AF #JustSaying
Most people who don’t play videogames or mingle in virtual worlds would probably think that’s insane. But it isn’t. It’s actually a very human thing: since forever human beings have enjoyed the attention and admiration they receive from others for having something that only a few can source or afford. Kings and Queens would dress in lavishing dresses made with the best, most exotic materials because they wanted everyone to know they could afford it. This is true for expensive items now-a-days too, because let’s be real; you don’t purchase a SUPREME item for its quality, or because of the company’s values. You do it because you KNOW there are very few items available for purchase. You KNOW others are watching, and you KNOW they know how hard it is to get a Supreme garment and/or how expensive they get. This is also why counterfeits are so enticing. You don’t need that Gucci purse to be the real thing, just that others think it is.
This is also true for knowledge… But I digress.
Now, if you are into NFTs and crypto-assets, maybe you have an NFT as your profile picture on Twitter. Maybe you have it because you want others from the crypto community to immediately identify you as part of it. But, if you own a CryptoPunk, for example, you have the immediate admiration of the community. Whether you payed 100 $ETH for it last week, or minted it back in 2017 for a few GWEI, owning one of these tells others about your conviction in the space and/or that you have a ton of Eth to throw around.
Anyway, you get the point.
Back to my story.
$515 was a LOT of money on 2007, and it is quite a lot of money today. That’s a month worth of groceries for two people, or even half of a month’s rent, depending on where you live. But of course, if you are into crypto, with some NFTs going for millions of dollars, $515 is nothing but pocket change. However, this was 2007, I was a BROKE college student with bills to pay, and I was eagerly investing hours upon hours of my time (approximately $515 worth + the monthly cost of membership to the game) for a digital object that made me feel good, but was utterly useless outside of the context of the game I was playing. Cuz #YOLO
What was the game, you ask? If you have been playing games for as long as I have, you probably already guessed.
The game I was playing was World of Warcraft, also known as WoW. And the item I’m talking about is the Netherwing Drake mount.
If for some miraculous reason you have never heard of WoW, it is a Massive Multiplayer Online Role Playing Game (MMORPG) released in November 2004 by then developer/publisher Blizzard (Activision Blizzard today) that took the world by storm, peaking at 12 million active users back in 2010.
I got into WoW back in 2006 when the first expansion, The Burning Crusade, was launched. I don’t even know how much time I poured into WoW over the years, but I do know that it was A LOT, and that today I have exactly CERO anythings to show for it. Well, maybe this picture:
As a matter of fact, I started doubting my time investment in WoW was a good idea when I realized that everything I had done in-game was not mine, it was borrowed (even wrote a short story exploring what it is like to come to this conclusion back in 2011, which I have re-published here for your reading pleasure). And sure, one can argue that the value I got from the game back then is quantifiable in other ways, such as entertainment, friends made, etc.
HOWEVER, (and fully embracing the possibility of sounding butt-hurt) as you go from being a 20-year-old college student with some time to spare, to a 30-year-old with all kinds of responsibilities, at some point you start to realize that sure, you may have a Rogue with the sickest PvP gear. Or perhaps you are really good in PvE and your Paladin becomes the main tank of the largest guild on the server.
But there comes a day when it is clear to you as a player (and paying customer) that the ever expanding World of Warcraft is an island surrounded by infinite virtual space.
Once that void becomes apparent, you simply stop playing, or start feeling very guilty when you do because the plain truth is that all the actions you take as a player within a virtual world such as World of Warcraft have little to no positive impact in the “real world”, and whatever satisfaction you get from living that “virtual life” can (and it certainly has for many out there) backfire, destroying your “real life” or even harming others. In my case playing MMOs got in the way of me living a life, and the realization that playing a game I loved so much was having a net negative effect became harmful for my mental health. Specially because I was paying a monthly fee to play these games and essentially throw my time away in creating something that 1. was making money for someone else, and 2. was never was mine to begin with.
In conclusion,
NFTs and digital ownership are a huge deal for gaming and digital creators as a whole; being able to actually own what you invested time in creating is HUGE for adult gamers whose responsibilities force them to stop playing games. Being able to bridge virtual lives with the real world makes staying in-game actually worth while. This in turn is huge for the industry, since according to Statista, 38% of gamers in the US are between the ages of 18 and 34 years-old, but this number dwindles to 26% in the 34–54 years-old bracket. NFTs might incentivize players to choose certain games/platforms and build virtual lives inside them, making them life-long inhabitants and (consequently) customers.
That’s where the concept of the “metaverse” comes in. But I’ll leave that can on worms for a different post.
Just image if all 12 million people who were playing WoW back in 2010 suddenly were given the opportunity to jump into the game they loved, but this time with full digital ownership.
Aaah… the possibilities.
What a great time to be alive!
