Throughout human history, games have captured the attention of people of all ages, not just children. With the advancement of technology and the emergence of the first computers, this industry only continued to grow. Older fans recall the debut of the first arcade games in the 1980s. The titles like Pac-Man and Donkey Kong made their mark back then. By the 1990s, many households owned gaming consoles. Initially, Nintendo and Sega entered the scene, and soon after, the powerful Sony arrived with its PlayStation console, which likely marked a significant turning point in the world of video games. Today, we will discuss gaming economies, so stay with us.
Soon after, there was a shift from 2D to 3D graphics, making games far more visually impressive. Simultaneously, the rise of the internet led to the expansion of online video games, with Counter-Strike and World of Warcraft standing out as two titles that remain among the top games today.
Today, video games are a significant part of a global multi-billion-dollar industry. This is confirmed by the growing popularity of eGames competitions, where prize pools reach millions. Naturally, many major online betting platforms offer wagering on these events. It’s no surprise that this market continues to evolve rapidly. The next step is to implement blockchain technology and NFTs in gaming, which will bring us closer to what many dreamed of as children: earning money by playing video games.
Traditional Gaming Economy – How It Works
Initially, video games did not generate additional income for the companies that developed them. However, with the rise of the internet came the introduction of “premium” content. This was followed by the emergence of add-ons, such as better cars in racing games or character appearance customization, in arcade-style games like GTA. It wasn’t long before things advanced even further. Today, it’s hard to find a game that doesn’t rely on selling additional content, such as skins.
For example, one of the most popular online games today, Fortnite, offers players a vast array of skins, which can be obtained by spending the game’s virtual currency, called V-Bucks. Although a certain number of V-Bucks can be earned by progressing through levels. Still, you need to purchase most of them with real money to unlock all the skins you want.
While this model does bring additional features and entertainment value to the game, it creates the impression that the real beneficiary is the company that developed the game, rather than the players. Players, on the other hand, can only “show off” the skins they’ve collected on their accounts. Additionally, although players pay for specific skins or add-ons, those digital items remain the company’s property.
This is precisely why we’re increasingly seeing the emergence of new games that shift the focus toward users, offering them various ways to earn money by playing and investing in certain skins that the company does not own, but by the players themselves.
Advancing the Gaming Industry Through the Introduction of Cryptocurrencies
When discussing the entry of cryptocurrencies and blockchain technology into the video game world, it’s essential to distinguish between the two approaches. The first involves implementing these technologies into existing titles (as is rumored to be the case with GTA 6). The second consists of developing entirely new games by emerging Web3 companies. Both approaches have advantages and drawbacks. Still, the common goal should be to create real value for users and the opportunity to earn money through a “Play to Earn” model.
Blockchain enables the transfer of ownership of skins and other in-game items from the game developer to the user. The key element here is the use of NFTs. These function as certificates of authenticity, verifying that you are the rightful owner of a digital item. A crucial feature of this model is the rarity of these items. Unlike in traditional gaming, the number of NFTs is limited from the start. For example, out of 10,000 different skins, 5,000 might be Spider-Man themed, while only 200 might resemble Batman. Naturally, this scarcity would increase the price of the Gotham hero’s skin.
Such a system opens the door to a digital economy where users can actively trade items and earn money. Moreover, this structure removes publishers from the trading process, enabling users to buy and sell items directly. Blockchain also introduces the theoretical possibility of using a single NFT item across multiple games, if the same company owns them or if there is collaboration between two studios. However, in practice, cross-game NFT usage is still largely theoretical.
„Play-to-Earn“ Model
As the very name of the P2E model suggests, this concept boils down to the fact that, for the first time in history, users are in a position to earn money by playing games. The ways of earning are diverse. From trading skins and other digital items, progressing through levels, to participating in and winning in-game competitions. This way, the old concept that playing games is a waste of time is eliminated. In addition, successful players will not only make more profit this way. Still, they may also gain the chance to participate in one of the eGames tournaments.
On the other hand, the P2E model comes with several challenges, one of which is maintaining the game’s economy. As already mentioned, there are two types of companies: those with a longer history in gaming and those that joined to create Web3 games. Well-known brands will surely not hand over all their profits to users and will, at some point, “pull the brakes” to avoid losses.
On the other hand, newly formed companies are starting from scratch. It’s challenging to create a game from scratch that has graphics, functionality, content, and an idea that will appeal to many players. And that is, of course, the foundation of success.
One example of a newly created game is My Pet Hooligan. Despite the fact that this Web3 game was launched into orbit, it still faces a significant challenge in fighting for its place in the market. Still, in the end, we must be realistic and admit that despite great challenges, the P2E model has shown enormous interest in this interaction between Web3 games and the real world.
Conclusion
The emergence of blockchain represents a significant leap for the global economy. However, while central banking systems are still hesitant to improve their operations by implementing this technology, the gaming world has wholeheartedly embraced it. There is no doubt that the game’s rules have changed, with the user now occupying the throne in these new roles. Games have begun to move beyond pure entertainment. They are increasingly becoming a source of income. The entry of well-known companies such as Epic Games or Ubisoft will undoubtedly further boost the popularity of Web3 games.
In addition, with the growing acceptance of crypto, legal regulation of this virtual payment is expected, which would fully bring cryptocurrencies into the mainstream. Finally, the last benefit that blockchain brings to gaming is certainly transparency. Since all transactions, as well as the money, are visible on the network, this significantly builds trust between developers and players. Also, it reduces the possibility of fraud by the game creators.
All in all, there is no doubt that we are witnessing a historic moment. Judging by all indications, if things continue in this direction, the gaming industry’s future looks promising. We look forward to seeing what lies ahead in the years to come. Until then, relax and play your favorite game. Who knows, it might just become a source of income for you one day.
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FAQ
How is the value of NFT items in games determined?
The value of an NFT in games depends on several factors: primarily its rarity, followed by market demand, and the specific utility it provides within the game. Sometimes an NFT gains popularity solely due to its visual design, but ultimately, its impact on in-game character performance plays the most crucial role.
Is it possible to use the same NFTs across different games?
Very rarely, since companies that develop games typically create their NFTs that are compatible only with that specific game. However, if a gaming company owns multiple Web3 games, there is a possibility that an NFT used in one game can also be used in another.
What are the differences between centralized and decentralized games?
In centralized games, all data and virtual assets are controlled and owned by the publisher and stored on their servers. In contrast, decentralized games allow players to own their assets using blockchain technology, most often through NFTs. This model offers more freedom, transparency, and earning potential, but also more responsibility for personal security.
Are there risks or scams in crypto games, and how can they be avoided?
The crypto space, still young and volatile, is susceptible to various scams. That’s why it’s crucial to thoroughly research both the crypto projects you’re considering and the games you want to play. To reduce the risk of abuse, always research the game you’re about to connect your crypto wallet to and investigate the team behind it.
How are crypto game projects funded?
Crypto gaming projects are typically funded through initial token offerings (ICO/IDO), NFT sales, or investments from Web3 venture funds. This model allows for rapid capital accumulation without relying on traditional investors. Communities formed around these projects often participate in development via various DAO (decentralized autonomous organization) structures.
