Since the end of 2021, NFT has been invading the gaming world, and it has become one of the most talked-about topics in 2022. But what is NFT in gaming? Why is gaming adopting blockchain technology? Will it be good or bad for game developers and pro gamers? Let’s unpack the answers in the following discussions.

What Are NFTs in Games?

NFT (Non-Fungible Token) refers to a digital asset stored in a blockchain. It perhaps sounds a bit complicated to comprehend for newcomers in the NFT-verse. To put it simply, NFTs are digital items that cannot be replicated in any way possible. 

Of course, one can copy the media itself and post it on social media. Yet, it’s the purchaser who retains the NFT’s ownership. Copying an NFT item is no different than taking a photograph of a work of art. At the same time, the buyer is the sole owner of the original, which can be proven with a certified token.

NFTs have been invading various sectors, such as art, sports, music, fashion, and gaming. Non-fungible tokens in the gaming space mostly appear in in-game content, including characters, skins, weapons, and other items.

How NFTs Might Work in Games?

NFT in the gaming industry is not the same as owning crypto-based collectible items in your wallet. There will be player engagements, procedures, and rules involved in a game that employs an NFT.

For example, a major game developer might use an NFT in the form of a unique avatar to represent your gaming character. NFTs in this industry can also be available in digital things discovered during the gameplay, popularly known as in-game items. These in-game items can either be sold or traded with other gamers for a profit.

You may be wondering how one technically incorporates these non-fungible tokens in the gaming space. Before making NFT gaming items, developers will first compose smart contracts that define the essential rules for exchanging, producing, and implementing NFTs in games. Smart contracts are bits of code that run on a blockchain.

How Do NFT Games Earn Money?

Many big game design companies regard NFTs as a way to generate a steady stream of cash from digital content. For instance, Epic Games introduced a limited edition Fortnite skin as an NFT. Someone could have a chance to be the first player to unlock the skin and subsequently claim ownership of it. 

The player will attain the skin's token, which later can be auctioned for potentially a large sum of money. No matter how much it sells for, the original creator, which in this case is Epic Games, will still receive a portion of the profit every time a new owner resells skin. 

It also applies to collectible, expandable, and trading card games where one could sell the card's ownership to another individual. The game developer would also take a cut from those sales. Additionally, NFT games make money from entry fees. For example, a player will need to purchase a particular creature pack to play a specific type of game.

While not all the samples above exist yet, those are sufficient to provide you with a clear understanding of what is NFT in gaming. 

Play-to-Earn NFT Games

Since 2021, NFT games have been dubbed as a brand new way to earn money in the gaming environment. Players can obtain tokens by playing Play-to-Earn games, and the tokens can be sold to collectors or other players.

Axie Infinity is one of the many Play-to-Earn NFT games with approximately 3 million active users every day and in-game items worth around $2.26 billion. Alexander Leonard Larsen, the co-founder of Axie Infinity, reported that half of its users were strangers to cryptocurrency before entering the realm of Axie Infinity. It clearly shows that NFT games play a role in the accessibility of blockchains.

In addition to Axie Infinity, there are other popular NFT games you might want to give a shot, such as follows:

• - Alien Worlds – It's a multiplayer social metaverse-based game where players can build their universe.
• - Splinterlands – This is a card trading game that employs WAX cryptocurrency that is believed to be eco-friendly for its carbon neutral.
• - Farmer’s World – It's an NFT game that claims to be the first in the farming genre. This game enables players to build a farming business in a real-world scenario.
• - Crazy Defence Horses – This is an NFT tower defense game that combines both Free-to-Earn and Free-to-Play gameplay modes. 
• - Upland – It’s a real-world address-based property trading game where players can trade, sell, and purchase digital property in the metaverse.  

Much like other NFT types, Play-to-Earn games also have their downsides. The value of game items is susceptible to fluctuation, which may lead many players to quit the game to cash out. It undoubtedly will cause huge problems if the number of players does not match or outnumber those leaving.

Can I Lose Money While Playing NFT Games?

In the crypto-verse, NFTs generally have an indefinite value. Thus, one needs to prepare for the likelihood of losing money on the NFT creation. Playing NFT games also might lead you to experience a financial loss. 

How much you will lose is determined by several factors, including the game type you are playing, the game mechanics, and the overall value of the NFT game items. Losing a great deal of cash when playing NFT games is not necessarily a sign that you have been scammed.

As briefly mentioned above, non-fungible tokens are generally speculative. The current market forces entirely set their value, and so are your losses. As Warren Buffet said, 'invest only what you can afford to lose. This golden saying is something you need to consider when you plan to invest in NFT games or other NFT types.

So, what is NFT in gaming? From the elaboration above, it can be concluded that NFT games are certificates of ownership for rare digital content. In this case are game items, avatars, collectibles, and many more. Rather than just purchasing NFT gaming stuff and reselling it to other players for profit, one needs to play the game.