What NFTs are and how the gaming business will evolve as a consequence (Part 1)
NFTs: Even if you are not interested in cryptocurrencies and blockchain, chances are you have heard of this topic if you follow gaming news or any news for that matter. Technology has shown to be highly controversial, to the point that you either love it or loathe it with a passion, despite claims from certain businesses that it is the “future of the industry” and something that its supporters deem “revolutionary”
It’s challenging to comprehend precisely what this technology is and how it may affect games amidst all the mixed feelings. After all, does it serve any purpose other than the retail selling of JPGs? Is investing in this market worthwhile? Are there dangers in implementing this method in traditional games?
This blog attempts to describe how things currently function in order to address these and other related issues. But take note: because the technology is still relatively young and constantly changing, much of what we already know about it is transforming quickly, and its potential applications have not yet been thoroughly investigated.
What are NFTs?
NFTs, or non-fungible tokens in a literal sense, is the abbreviation for “non-fungible tokens”. The term may sound unusual, but it describes the features of the virtual commodities made possible by technology: they have distinctive registration numbers that are impossible to duplicate and values that do not exactly match those of other digital assets released, regardless of how close they may be.
You can conceive of them as art pieces or even collectibles for ease of comprehension. Consider the Monalisa: even if it may be copied or printed on clothing, only the original artwork has true worth. There is only one official copy in the entire globe. Since we’re talking about virtual commodities in the context of NFT, or, more specifically, certificates tied to virtual products, things become a bit more difficult.
In the realm of video games, for instance, an NFT might be connected to a single, incredibly potent sword that exists within the game’s setting. By acquiring the token, you don’t really get the sword; instead, you get a special certificate that certifies your ownership of it and may be traded or sold.
In other words, just because you purchase an NFT and receive a certificate guaranteeing this, doesn’t imply you automatically own the thing. In other words, it can continue to be shared on social media, used by the developer in marketing materials, or imprinted on clothing. But within the game, you will be the only player with possession of it, making it unique.
What exactly does “fungible” mean?
Even if this word (which is, let’s face it, a little unusual, is not used that frequently), the idea of what is or is not fungible has always been present in our daily lives. A 10 buck real banknote is an example of a fungible object since it may be used in several ways. Even if one is brand new and the other is torn and crumpled from use, they may both be hung without losing value for any bill of the same amount.
It is important to keep in mind that the line dividing fungible from non-fungible is not always absolute and might change even while discussing the same object. Depending on how long ago a Collector’s Edition of God of War was released and how well each one has been preserved, one Collector’s Edition may not be worth the same as another.
Do you believe an NFT can be compared to the value of a real collectible?
Even if they were interchangeable at first, today’s worth of an item that has been used and opened varies from that of an item that is still sealed and undamaged. In other words, the most valuable collector’s item is more likely to be something special and non-fungible than the one that is already used up. The same is true with currency: under the appropriate circumstances, a coin or note that has even stopped being used for daily transactions can be sold to a collector for a significant premium over its initial face value.
Sadly, they can’t
This idea is the reason why the worn-out copy of Super Mario Bros. 3 you have at home isn’t worth the millions that a collector would have won at an auction in 2021. It is important to note that in reality, an item’s value includes factors like rarity and production value but also embraces a high level of subjectivity and speculativeness. Therefore, even if you think it’s silly to spend millions for anything, don’t think you’re wrong if you do.
The fact that NFTs are connected to the blockchain, a method of authentication that ensures the legitimacy of digital commodities and makes it virtually difficult for them to be stolen or duplicated illegally, is another feature that sets them apart.Imagine blockchain as a massive ledger shared by thousands of computers, each of which records every movement of the digital asset and needs to validate every modification that has occurred. This decentralisation and high level of security results in a procedure that is also incredibly energy-intensive.
Millions of users can be connected to a single blockchain, each participating in the checks and conducting their own transactions (which trigger the block checking process). Even if the entire blockchain need not be verified for a transaction to be processed, a lot of equipment and processing power must be used, which means electricity must be used.
So how does it work in games?
NFTs may be utilised in conjunction with any digital component seen in games. While this allows for the potential of, for instance, purchasing a certificate of ownership for a song or game texture, in actuality the technology is linked to objects and characters that interact with the gameplay aspects directly.
NFTs are associated with too-powerful equipment (and with special properties) in Ubisoft’s Ghost Recon Breakpoint, which players may acquire to equip their characters, sell, or trade with others. The virtual asset’s link to the blockchain, which ensures its legitimacy and enables transactions to be made without the game’s producer’s involvement, sets it apart from a traditional item.
One benefit of using NFT for “lawyers” tech is that a developer cannot see attributes. It looks completely original. In other words, this ensures that there is a chance it will become uncommon, increase in value, and be able to be sold again for a big profit. All of this occurs in a setting where the market is said to self-regulate without the interference of outside actors.
In other words, the fact that they allow the customer greater power over what to do with it sets NFTs apart from traditional goods sold through microtransactions. However, several obstacles make this scenario less than perfect.
Though decentralised, NFTs are connected to centralised bases.
One of the major claims made by NFT defendants, such as ex-Linking Park employee Mike Shinoda, is that the technology will permit the interchange of gaming assets. Think about how awesome it would be to be able to purchase Chaos Chains in God of War and use them on your characters in Fortnite or Assassin’s Creed. This might even be feasible in principle, but there are several difficulties. This will need to be considered by the players.
Games still follow a relatively controlled system of operation, despite the NFT market being built on the blockchain, which is partly decentralised. In other words, there is no assurance that the Sony Santa Monica assets used to make Chaos Chains compatible with the series will be used in future titles. Remember that certain relevant players will want the virtual products because of the technology. It does not, however, ensure that you genuinely possess it or that you have any rights regarding its usage.
The possibility exists for developers to transfer items between games. There are still a number of challenges to overcome, though. The two games’ engines could differ from one another. Consider a scenario where two games, one using Unity and the other Unreal. As a result, moving the item or piece of equipment is impossible. Similarly, a weapon of that sort might not be appropriate for use in another game. Even if it does, the perspective could be in first person. It makes it difficult to utilise the thing as it was intended to be used.
Do you realise how complicated the situation is? True item interoperability can only be achieved by creating a shared basis based on the same engine and resources.
In other words, a significant amount of industry-wide standardisation would be required for this to happen. In the end, it would seriously jeopardise new developments and other gaming genres. Assets and engines can be adjusted to some extent. However, they will invariably run against obstacles that call for developing new “moulds”. These provide wider and simpler answers. Furthermore, it is more difficult than you may imagine to migrate previous work to them.
Therefore, it appears that whomever claims that NFT is a simple answer to a difficult problem doesn’t understand how games are developed or the potential repercussions that moving an object into a new environment might have. Due to design language changes and game ideas, this approach might be challenging even within the same franchise. For example, Bayek’s costume might appear in both Assassin’s Creed Origins and Assassin’s Creed Valhalla. However, considering its features, it functions quite differently in every game. and original suggestions.
NFTs used as clothing or the’skins’
The fact that a digital token’s value is very context-dependent is another problem. Moreover, there isn’t much control because of technical limitations. The consumer rarely has any influence over it in the end. Think about getting a highly rare weapon from an RPG. It distinguishes out for providing powerful fire powers and swiftly taking out all foes. I like it, huh? What if the game is updated after you spend money on an NFT? So all foes are now immune to the element in your item? The weapon loses some of its potency. As a result, your investment declines. The attributes of the token or piece of equipment will be preserved since it is an NFT. No modifications are allowed on it.
This indicates that the item’s decentralised nature of ownership, sale, and trade is still present. Because of this, a large portion of its financial worth (and usefulness in a game) still rely on centralised judgments. They will always be developer-dependent. If losing the ability to use your favourite weapon in an online game isn’t already annoying! Imagine how much more frustrating it will be if it occurs on something that you paid for.
