Blockchain Games: The Rise of NFTs

The video game industry has been constantly evolving since the first video game developed by Steve Russel and his MIT team back in 1962, entitled “Space War” and the release of Atari’s first commercial video game “Pong” in 1972, offering new technologies and magical experiences for individuals and enterprises alike.

According to Terry Stancheva based on her article 50+ App Revenue Statistics – Mobile Is Changing the Game, more than 2.5 billion people play games, the global gaming industry is projected to reach $256.97 billion at a rate of 9.17% between 2020 and 2025 where users are spending 380$ billion on in-app purchases worldwide.

The gateway to this immersive world is open to anyone who can bring unique perspectives, values and beliefs to their target audience. This is true for any sector that can use this digital environment to solve a problem or present an engaging value.

In this article, we will be discussing about blockchain games and a new type of cryptographic assets entitled NFT, a newly emerging type of video games that might change the perspective of how we used to interact with game environments, in-game purchases, and digital assets.

This innovative form of games is based on Blockchain technology, leveraging the advantages of a decentralized data system as well as the power of special types of smart contracts called Non-Fungible Tokens (NFT). Those smart contracts allow each element of the game to be unique, scarce, transferable, and have distinct ownership.

So far, we’ve been  playing games like Minecraft, Fortnite, and YuGiOh Duel Links where we create our universe, upgrade our characters and cards, buy new weapons or gadgets, or even speed up in-game progresses without owning those digital properties, or even being able to retain or move those assets from one place to another.

Gamers spend a tremendous amount of their money, effort, and time to level up, collect items, complete mission and build a memorial experience within the game. However, they don’t own their digital assets and achievements as everything within the game has no true value in the real-world from the gamer standpoint. Moreover, game developers own and restrict the usage on their digital assets that are created or developed on their platforms.

Therefore, blockchain games came in place to change this idea by introducing a new kind of immersive experience where end-users can own, purchase, sell, build, share, or even auction their digital assets with the entire world whilst game developers have no authority or power over those digital assets.

Although the technology is still in its junior stage, a lot of interesting projects are heading to the market and we’re going to go through some of them in more detail after explaining what NFTs are and what makes them different from standard crypto tokens such as BTC, ETH and XRP.

What are NFTs

NFT is short for Non-Fungible Token, a special type of cryptographic asset which was initially built on top of the Ethereum blockchain using its state of art smart contract capabilities. Unlike fungible tokens such as BTC, ETH, USDT, XRP … etc, where each token instance is identical in value and functionality, non-fungible tokens are special types of unique collectible tokens based on the ERC-721 Smart Contract Specifications and the next generation standard developed by Enjin Coin ERC-1155 which will be discussing in more detail later in this article.

An NFT can represent an entire digital asset or reference a real world physical entity giving its own permanent node on the blockchain. While each Bitcoin is identical interims of characteristics and functionality and all US dollars has the same value, shape and can exist in mass quantity, Each NFT is a genuine collectible digital asset that cannot be reproduced, inflated, and has assured ownership.

The first instance of NFTs came into picture with the CrytoKitties game developed by Axiom Zen (Dapper Lab) where players could own, buy, collect, sell or even breed digital artworks of cats and monetizes the entire process on top of the ethereum blockchain. The game gained a lot of hype and traffic in a sense that some digital kitties were sold for more than 100,000$ with the most expensive digital kitties purchased at 60Eth approximately 170,000$ back in 2018. CryptoKitties have opened the door to a new world of digital assets where people can turn almost anything such as artworks, content, hand crafts, collectables, furniture, tickets, and even ourselves into an NFT and add a true value to it.

New projects are being introduced every day utilizing this new standard in all sorts of fields such as entertainment, identity verification and accreditation, artwork and asset ownership, decentralized finance and trading, storing and securing content, copyrighting, real-estate, retail and packaging, and much more.

Even in its early days, NFTs trading volume per day have reached to 370,000$ traded on in-app marketplaces or platforms such as OpenSea, EnjinX, and Rarrible where they allow NFT owners to connect their crypto wallet and trade their NFTs with the entire world.

We might see new NFT smart contracts that are used for the real-estate industry where people will be able to uniquely identify the ownership of a property and buy, sell, transfer, or mortgage the real physical asset worldwide. Likewise, we might reach to a state where directors, actors, models, and influencers turn reputation and their entire content to NFTs.

New disruptions leads to crazy opportunities.

So why it is a serious deal to associate computer games with blockchain and NFTs?

Before we go through the above question, we need to be familiar with the crypto project that dedicated itself to blockchain games and digital assets developing one of the most advanced NFT smart contracts, the ERC-1155.

EnginCoin and the ERC-1155 Standard

With regards to blockchain games, it’s essential to make reference to the Enjin Coin ecosystem, a crypto project that came to presence as the first devoted crypto coin for the blockchain gaming and virtual asset industry. The platform is intended to act as a decentralized platform to implement, manage, store, and exchange virtual resources.

Videogames can utilize Enjin for its complete tokonomic solutions, where games can introduce fungible tokens for various types of in-game and 0ff-game transactions, as well as NFTs, to represent a distinct digital asset on the ethereum network where users can own, trade, or store permanently.

In addition, Enjin is the creator of the ERC-1155 Smart Contract Standard on the ethereum blockchain, where multiple fungible and Non-fungible tokens can be represented by the same NFT node on the blockchain, unlike the ERC-721, where only 1 specific digital token can stored per class.

This standard have allowed various shifts in the NFT market specially in the game industry where in-game fungible tokens such as coins and gems are transacted along with digital assets such a weapons and skills. To simplify it further, ERC-1155 is a smart contract the joins the functionality of both the ERC-20 and ERC-721.

The EnjinCoin’s Enj token can be used to control and manage the entire ecosystem and all kinds of transactions for the acquisition, sale, transfer and melting of virtual properties. It can function as an in-game currency to buy, sell, upgrade, speedup progress within the game or to store, manage, trade, exchange digital assets in or off-game.

It’s no wonder that Enjin has collaborated with world-leading names such as Samsung, Microsoft, UbiSoft and Unity to introduce the next wave of online gaming. A lot of playable games are utilizing the Enjin token nowadays while others are in the process of development such as Azure Heroes, War of Crypto, Lost Relics, Nestables, Forest Night , Forgotten Artifacts, 9 Life Arena, Cats in Mech, BitCoin Hodler, Age of Rust and the list goes on forever.

However, Enjin is not the only player on the blockchain gaming world. In fact, some of the well-known blockchain games at the moment are not based on the EnjinCoin ecosystem.

Blockchain Games in Action

There are tons of gaming projects that are in development on top of the blockchain where each project provides immersive game play, fluid game mechanics and tokonomics. Some of those games that we will be going through in this section are already in their pre-alpha, alpha, or beta stages having a decent amount of audience and unexpected international support.

Most of those games are built on the ethereum network as few years ago this was the only network that Decentralized Applications (Dapps) and smart contracts could be developed on. This has caused those projects to face different challenges due to the pitfalls and limitations of the ethereum network interim of its limited transaction per second (TBS), scalability, and intolerable high gas fee.

However, projects such as Axie Infinity, DecentraLand, The Sandbox, and War of Crypto…etc have still moved forward ignoring all those pitfalls wishing for ethereum 2.0 to launch and fix those issues. Today, there are many new technologies that overcome ethereum’s problems and provide a much more convenient system for developers and users alike, ecosystems such as Polkadot, Cosmos, Waves, Cardano, and Elrond to name a few. Moreover, there are projects such Flow Blockchain from the creator of CryptoKitties which is in early development dedicated to NFT projects.

Surprisingly, in the last two years, ethereum has been increasing in demand, and some of those games have made great progress despite the above-mentioned facts. This proves how big the market for such projects is, and how gamers are willing to switch from the state where they pay to play towards owning and earning while they play.

To demonstrate the potential of NFTs and blcokchain games in general we will go through few games that have created some big buzz in the decentralized gaming space.

Axie Infinity

Axie Infinity is a blockchain game in its Alpha stage that has more than 7000+ active users so far provided an engaging game experience along with a strong tokonomics model. The game is about owning fantasy creatures called Axies where they can be used for battles, breeding as well as trading in the marketplace.

Each Axie is a unique NFT digital asset having its own unique ID on the blockchain. Gamers can buy, sell, breed, transfer and play with those axies to gain some real cash or obtain Axie Infinity’s own fungible token called SLP. SLPs are potions that are used in the breeding process and at the same time those SLPs can be bought and sold on decentralized exchanges such as Uniswap.

Axies can have 9 different classes thus far such as Beast, Aquatic, Bird, Reptile, etc with 3 different stages where they grow from egg and larva to become an entire adult ready for battle. According to their website, there are about 167075 Axies thus far each having different sets of parts, abilities, stats and rarity with the most expensive Axie sold as much as 160 Eth.

Game developers are very involved with new tournaments, updates and features are introduced each month. The PvP arena session 11 is open now where participant can battle eachother and earn Dai Tokens and SLPs. Users can buy lands and assets to populate the new Lunacia World and Project L which are coming soon. People can trade Axies and digital assets in-game or on external NFT platforms such as OpenSea and Rarible.

The game is becoming popular in low-income countries such as the Philippines and Venezuela, where people are earning their monthly income from this game by playing full time in the current pandemic situation. While it’s still not officially released, Axie Infinity is by no doubt a solid game that pushes NFTs and Blockchain games to the next level if it keeps on delivering its promises.

Decentraland

The first virtual world environment on top of the ethereum blockchain where users can customize their own avatar, explore, find friends, chat, trade, create and monetize their digital lands and assets. The project aimed at establishing the concept of digital asset ownership in the form of NFTs.

Imagine it as SecondLife on blockchain where people are allowed to buy, rent, or sell their own land and digital assets, create and monetize their entire experience or simply explore and earn or send some cash. The platform is entirely in 3D, allowing artists to design and export 3D assets to the marketplace, while other users can purchase those assets in order to use them on their own land and create their unique virtual worlds.

Mana is the fungible token associated with Decentraland and that can be used to purchase lands, assets and gaming services. People can use the land to create all sorts of personal and business experiences from interactive exhibits and educational projects to games and enterprise simulations.

The Sandbox Game

A community-driven Voxel sandbox game similar to Minecraft where users can purchase, build, rent or sell their lands and states as well as create and own their voxel assets using their state-of-the-art Voxedit and Game Maker software. Users can trade all type of digital assets including lands in the in-game marketplace or any external NFT trading sites on the blockchain. The potential of this project is massive interims of scale, development and utility.

In contrast to the above games, 40 million potential audiences might be switching to this game as this is a complete 3D remake of their original successful 2D game that was released on IOS and Android since 2012. The game is backed up by some of the biggest names in the entertainment industry such as Atari, SquareEnix, Legendary Bears, and Animoca Brands. All of those partners have already bought a massive amount of lands and states where they will create their own games and virtual experiences.

Thus far the Sandbox game had major updates and land presales of different sections of their world map and all of them were sold completely. According to their blog on September, the latest Presale 4 (round 2) sold 4,512 lands lasted for 4 days where in each day the lands were sold in minutes.

Similar to the Mana token above, the Sand token is the official fungible token associated with the Sandbox project used to govern and manage the entire sandbox experience from trading all type of digital assets, monetizing the games developed on the lands, to renting properties or developing reward schemes.

There are many other blockchain games that are in their playable, Alpha or Beta stage such as the Nestables that uses the Enjin Coin ecosystem, LightNite, a low poly stylized battle royal game on top of the BitCoin blockchain utilizing the power of the lighting network to overcome Bitocoins mainnet limitation. In addition, there are complete playable games such as Brave Frontier Heroes and SplinterLands where their NFTs can be traded in-game or on external NFT trading sites.

More new games with new technologies are in their way such as Etheverse that promises to implement an entire tokonomic system on top of Minecraft, Blankos as an open world universe to own and build which its beta version will be live on November 17th, and the first blockchain game on PS5 entitled The Six Dragons to name a few.

Obviously blockchain games are getting a lot of hype, big companies and indie developers alike are competing to be the first mover in this junior market. However, it’s important to mention that there are a lot of risks involved in this new direction where technologies are not perfect yet, many publishing platforms does not allow monetizing games to be published on their services as well as there are gaming projects that are considered gambling or can be used as money laundry where it has a religious and legal dimensions to consider.

Moreover, as it’s obvious with the Defi bubble in the last year, a lot of projects might turn to be scams, fail to deliver or shutdown for legal or technological reasons. It’s important to be careful, research and do your due diligence as well as develop or support projects that are legit.

New trends and disruptions provide new world of opportunities for people who are smart enough to make use of its outstanding potentials. The sky is the limit when it comes to new born technologies such as the Blockchain and NFTs.

With the immerse of new and more powerful decentralized networks such as Polkadot, Cosmos, Cardano or even Layer 2 solutions on the Ethereum network such as xDai and Matic, NFT based projects might surprise us with unexpected solutions in the upcoming few years.