Ralph Baer - the German-American Engineer/Inventor - called the father of home video games. But then, little did he know that he was initiating a gaming revolution while inventing the TV consoles. During the 1970s, a myriad of consoles popped up in the market. Fast forward to the 1990s, Nintendo’s Mario game took the gaming world by storm with its affordable cassettes.
Since then, video games have become a lucrative, ubiquitous industry with avant-garde functionalities. At some point (precisely during the early 2010s), the video game industry (for instance, in the United States) churned out big revenue than the ever-lucrative Hollywood.
Gaming industry generated 18 billion (in revenue) USD in 2020, while it is projected to reach 19 billion USD in 2025. Gamers are treated like celebrities, with tens of thousands, if not millions, of fans. They are also only teenagers and young adults. Having a fan base of millions of people is a great accomplishment in this day and age. Not only are individuals obsessed with bargains, but brands are as well. They're enlisting the help of game developers to create characters that promote specific brands.
When numbers look like this and NFT Gaming development starts to find its relevance, the future looks (decentrally!) promising for the gaming industry.
With the emergence of so-called "play-to-earn" games, the industry's traditional custodial model of ownership and profit-sharing may be on the verge of upheaval. This sort of video game allows players to 'really' earn and own digital assets, which they can then sell at their leisure outside of the game.
Establishing faith in the permanence of their digital presence and goods and their economic robustness is critical if individuals devote significant time, attention, and personal investments to digital environments. Early implementations suggest that this is possible with blockchain technology, which can secure digital trust and decentralized storage of value via encryption.
Blockchain technology, notably non-fungible tokens (or NFTs), is the cornerstone for value creation in P2E games. A non-fungible token is blockchain-linked digital ownership of a digital asset. In practice, NFTs can take various forms within virtual environments, including characters, products, land, decorative customizing features like digital clothing, and more. People earn the incentives through exceptional in-game performances, which they can monetize later (in various forms).
For now, the play-to-earn concept doesn’t eliminate the gaming centralization. There is still a role for a publisher in gaming platforms to issue digital assets, which will be traded as NFTs. But then, the play-to-earn concept’s greatest potential lies in its ability to decentralize NFT gaming platforms for ownership and smooth exchange of assets.
1. Axie Infinity - The Breeding Game
Axie Infinity is the most popular blockchain game currently available. Players raise a variety of monsters (dubbed "Axies") and compete them in battles or excursions. Axie is a one-of-a-kind NFT with its genetic code. The Axies can be crossed to create even more powerful creatures. Players would need Ether (handy) to procure Axie Infinity Shards (AXS) - the governance token and Smooth Love Potion (SLP) - to breed new Axies.
2. The Sandbox - Virtual Builder Game
The Sandbox is an Ethereum blockchain-based open-world game. Minecraft and Roblox are the most comparable games. Players build their worlds, plan adventures in the social center, and make their games. These can then be sold for profit. In The Sandbox, LAND is a valuable resource. Each piece of LAND is an NFT that represents land ownership in the virtual world.
3. Illuvium - The Role-playing Adventure Game
Illuvium is an under-beta-test game where players travel to compete against the monsters (Illuvials). Illuvials are animals that live in the Illuvium realm. They can be captured and nursed back to health by players. They become part of the player's collection and can be used in Illuvium's Auto Battler mode to combat other adventures. An Ethereum-linked role-playing game allows players to earn rewards (as non-fungible tokens).
While crypto entrepreneurs generally seek market direction from industry experts, wise industry players will be watching and waiting to see how newer, more agile companies perform before committing to these new market techniques. These entrepreneurs are more likely to embrace a wait-and-see strategy, allowing independents to take risks and prove notions. Their aim is to enter the market later, when new models have been established and lucrative, by purchasing and adopting them.
The play-to-earn games are at the forefront of a wider trend in gaming: the growing convergence of the physical and digital worlds. The creation of the legendary metaverse came at the focus of current scholarly disputes and the substance of revitalized business ambitions, most notably Meta (née Facebook).
P2E games hold huge potential to disrupt financial institutions, marketplaces, and governments. As they offer the financial system a proof-of-concept, it seems there is a larger trend at play.
And for many gamers - from the United States to Japan and Russia - the gaming transition may have just begun.