10 Things you Need to Know about Games with NFTs
Published in
2 min readMar 5, 2021
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.