What NFTs are and how the gaming business will evolve as a consequence (Part 2)
Using NFTs, work becomes entertainment.
In the business, where players have long found methods to make money in situations where it should not be their goal, experiments with the commercialization of game-related items are nothing new. Who hasn’t heard of the “Gold Farmers” of Realm of Warcraft? This is especially prevalent in the world of MMOs where there is a complete parallel market for buying and selling stuff for real money.
However, no event has demonstrated how altering the perceptions and playing style of gamers as much as Diablo III’s Auction House has. It made its debut in 2012 along with the game’s release on PC, and it offered the chance to quickly make money by offering your stuff to other players who were interested (of course, giving Activision Blizzard a small slice of the profits).
The concept appears to be ideal for the developer on paper. After all, by eliminating intermediaries and providing a secure environment for its customers, it may sell gaming things on the parallel market as it is possible to do so. In reality, both the design of the game and the players’ estimation of its worth were directly impacted by the system.
It’s possible that gaming isn’t fun at all
It was usually simpler to improve equipment through the Auction House than it was to engage in combat and explore in Diablo III. In other words, many individuals no longer find a need to play games as a result of the monetization method. As a result, they have entirely forgotten about the title.
At the time of the decision, Blizzard stated that “it has become increasingly clear that despite the benefits of the Auction House system and the fact that many players around the world use it, it ultimately undermines Diablo’s core gameplay.” : Kill monsters to get cool items”.
In other words, the introduction of objects with genuine worth outside the game had an effect on the economy and led to many players treating it like a job. The goal of the game was no longer to use the things to make your character powerful. The new objective is to sell them in order to profit. Blizzard, make life less enjoyable and satisfying. This was done in order to balance off the money that people have been spending.
The play-to-earn system that transitions to pay-to-earn
Some major corporations, like Konami, Square Enix, and Ubisoft, are interested in collaborating with NFTs. Many of them continue to explore with it, though. The bulk of the public’s mistrust of technology is largely to blame for this. Those that do so view it as a simple means of making money don’t actually benefit gaming in any meaningful sense. It’s almost like a brand-new microtron or loot box that nobody wants (apart from the one who has the money).
Independent businesses that opted for the “play-to-earn” business model to grab the public’s attention are the ones actually in charge of shaping the direction of this industry. The argument is straightforward: why don’t you play for money as well as for enjoyment in order to enhance the household’s income?
Axie Infinity is one of the most well-known games in this category. In it, players build monsters that may be enhanced and then sold for more money than they first invested. However, in order to play the game, you must first take out your cash. Additionally, earnings are received in the form of potions, which are the cryptocurrency counterpart of Ethereum tokens, from which developer Sky Marvis deducts a portion from each transaction.
Given its capacity to create returns bigger than the nation’s minimum salary, the game became a craze in the Philippines during the COVID 19 epidemic, even if player earnings are not astronomically high (something that also attracted many Brazilians interested in earning in dollars).
In actuality, they are groups of accounts that are shared with others in return for a modest profit share that can range from 60% to 70%, depending on the terms of the agreement. According to an article on the Overloadr website, this situation is typically highly informal and insecure, including contracts where the player must surpass daily targets in order to maintain a profit — which might drop over night.
Earlier, I mentioned that an NFT’s owner has no influence on the context in which it is used. Do you remember what I said? How this may harm players has been demonstrated very effectively by Axie Infinity, where the creators restricted token gains and structured it such that they could only be redeemed by those who reached a particular level in competitive mode.
As a result, many players were compelled to invest additional time in the game to make up for their original outlay and some even discovered that they were unable to maintain “zero to zero” levels. For those who could, the answer frequently entailed spending more money on the game and purchasing stronger (and more costly) monsters that guaranteed competition in online bouts.
In other words, style games are honest when they claim that you may profit from them. Axie Infinity proven to be highly popular in nations like Brazil and the Philippines, highlighted by the significant appreciation of the dollar and a marked employment market. However, income does not often replace a more traditional occupation or pay for the initial investment. unemployment and unstable circumstances. There are some people who have succeeded in making a lot of money, but they should be viewed as the exception rather than the rule.
Model is regarded suspiciously
There are several additional games with comparable models, as well as activities where playing and making money do not require the same entrance cost. The gameplay is often straightforward and monotonous, with a sole focus on the grind, and this characteristic is currently shared by the majority of games.
However, the absence of the “fun game” component did not prevent the development of a number of projects that see the NFT as a means of revolutionising games. Given the impact of the technology, it has caught the interest of a number of investors, who are not hesitant to invest lavish sums of money in projects that have not yet taken off.
The lack of regulation and decentralisation associated with the technology’s novelty have also created a place for fraudsters, which only serves to strengthen the public’s mistrust of the gaming industry. For publishers, “the advantages that NFTs and cryptocurrencies might bring to games are theoretical, but the downsides are tangible,” the Games Industry website decided in March 2021 not to feature any NFT-related topics.
The vehicle not only draws attention to the segment’s high level of speculation but also criticises the potential threats to the environment. Editor Brendan Sinclair makes the claim that as technology spreads, there will be a greater demand for mining cryptocurrencies, which would drive up prices and consumption of power.
The play-to-earn concept, which in certain instances transforms into pay-to-earn or pay-to-earn, alters our expectations for games and their capacity to be enjoyable. When you engage in an activity with the objective of making money to pay for boletos, you don’t spend time on extraneous, unproductive (but perhaps enjoyable) activities. Instead, your goal is to maximise your time and concentrate exclusively on what will yield the greatest reward. In other words, the game’s structure and even its artistic purpose alter.
The pollution issue
It is usual to come across literature claiming that NFTs and cryptocurrencies pose a threat to the planet’s future when investigating these topics. According to Nature, without accounting for all the other pollutants on the earth, the emissions produced by Bitcoin alone have the potential to raise the temperature of the world by up to 2°C over the course of three decades.
This is due to the fact that the foundation of the whole industry is made up of massive data centres where high-performance machines collaborate to solve mathematical problems, such as blockchain verification. As a result, there is a significant increase in the consumption of electrical energy and waste due to the need to replace parts that soon outlive their usefulness.
The cryptocurrency relationship
The market as a whole does not pursue a sustainable path, despite the existence of NFT solutions that claim to be carbon neutral and Etherem’s (a cryptocurrency typically connected with tokens) impending adjustment to its mining procedure. Kazakhstan generates the majority of its electricity from old, very polluting coal mines, which contributes 18% of the world’s hashrate (the rate of power used to create new bitcoins).
Although local officials assert that they are taking action to shut down mining centres, this does not always indicate a resolution. Since mining occurs on a worldwide scale, it only takes one market to shut down for another to recognise it as a business opportunity. Kazakhstan, for example, only saw growth in this industry when China banned cryptocurrency mining on its soil.
The issue of excessive energy consumption is not a regional one, but rather a feature of cryptocurrency and blockchain technology. The search of large yields and the speculation created by these technologies will probably be a significant obstacle to stopping additional global warming unless something drastically changes.
The path is still unclear
Piers Kicks, an employee of Bitkraft and Delphi Digital, says there is still a lot of research to be done. In an interview with VentureBeat, he claims that while most investors aren’t actually looking at games, they are interested in new businesses.
We still seem to be in a major discovery period, in my opinion. There are several novel mechanisms and ways of approaching problems throughout that time. He explains, “We’re still learning about them. Only those that comprehend the cryptosphere, according to Gabby Dizon, CEO of Yield Guild Games, will stand out. The winners in the long run, nevertheless, will be the game designers.
“I feel that they’re going to be a lot more strong if game developers join in,” asserts Dizon. The NFT market is currently seeing a true “gold hunt.” While some of the agents involved vanish, others become more powerful.
It’s difficult to say at this point if the trend will continue. It might simply go away like some previous movements that made industry-changing promises. Such things like loot boxes and accompanying applications may become irrelevant.
What do you think of the situation, by the way? Do you think NFTs have promise or do you not think the technology has potential? Post a comment with your thoughts in our area!
Companies like Mojang have recently taken a stance against NFTs. Giants like Epic Games are supportive of this, though. It’s up to the creators, according to the owner of Fortnite. Evidently, Instagram is also accessible to NFTs.
