The Future of NFT Video Games with Alpha District, Axie Infinity and More

Undoubtedly, the encroachment of NFTs into video games has transformed the world so much that it has divided the gaming universe. But why? To some people, NFTs are a confusing riddle of monkey pictures, cash grabs, and a bunch of over promised hype.

Still, a significant portion of the gaming population believes that these types of games aren’t driven by trends but by their use cases. And that NFTs are the future of video games.

Aleksander Larsen, the brain behind the Axie Infinity, said that NFTs enable players to hold and utilize digital items. Since NFTs are attached to costumes, characters, and game items, the gamers can accrue them to sell or retain. The player can own their items and in-game progress forever, with NFTs.

The Concept of In-game Monetization

NFTs are digital collectibles that stand in for images, videos, quotes, etc. They are created on the same technology as cryptocurrency – blockchain. While the latter is fungible and can be exchanged for its unit, an NFT is not. It’s unique, making it perfect for certifying ownership of items on the chain. 

Before in-game monetization, gaming studios like Nintendo relied on selling copies to make money. When the 64 came into the limelight in 1996, it sold 1.6 million copies in Q1. However, the idea of making money through sales has transformed with the coming monetization.

NFTs may have popularized in-game monetization this millennium, but the concept long existed even before blockchain was developed. However, it was done slightly differently. Games like World of Warcraft were already using the concept, enabling players to trade their items on secondary sites for real money. But, players could not permanently own the asset outside of the game. That’s where NFTs are different.

The famous Fortnite also used the same concept. It relied on in-game purchases, which is evident in what it rakes every year (about $5B annually). Unlike traditional gaming studios, it didn’t allow deep pockets to take control of the game, and gameplay wasn’t affected either. 

NFTs changed the landscape. Somehow, they found their way into the gaming world, even though they were known as digital art. Axie Infinity, GemUni, etc., are manifestations of NFT gaming. Alpha District, an upcoming browser based video game that leverages NFTs, is going one step further. You will be able to own your in-game progress, your virtual land, and your characters.

Even the most eminent traditional gaming studios like Ubisoft are leveraging NFTs. However, they are torn between selling the items as NFTs or implementing the P2E model of Axie. There’s no denying that they have broken the entry barrier to gaming. 

What to Expect

DappRadar reports that NFT games generated about $5B from in-game sales in 2021, accounting for nearly one-fifth of the entire sales in the sector. This is massive and a testament that many love the concept. Does that mean the future is bright for of NFT-based video games? 

Wade Rosen of Atari said that many traditional gaming studios would not embrace the idea of integrating NFTs, given the current poor infrastructural state. In her opinion, NFTs have no concrete utility for players to adopt them yet. However, she said that a significant improvement in their value could kickstart a widespread adoption (in the near future).

Rosen referenced the backlash Ubisoft received from unveiling its NFT project last December. The decision was disliked by over 96% of gamers after the announcement on YouTube. The backlash was heavy as the game company reported a sale of $1.8k from 15 NFTs sold.

It isn’t that gamers don’t like to own an NFT item. They dislike the idea of the games being used as a mechanism to milk out cash. Gamers’ reaction has made it challenging for even studios like EA Sports to venture into the niche.

According to Rosen, there’s little room for exploration at the moment. Until NFTs evolve into something more significant, gamers will feel the market more about the money rather than entertainment.

In the near future, with a few changes that are being made by upcoming games in the NFT video game space like Alpha District, slight changes in the model might work a lot better shortly.

NFT video games are still in their incubation, and we can see the prospects of NFTs. It wouldn’t be right to compare them to their AAA counterparts yet, but they will get there in the future.

Also, their earning model will facilitate the adoption of these games, especially in the East. With additional utilities provided, NFT video games could displace traditional games, not only in the East but in the West. 

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