20 Jul Play to earn – the rise of NFT games
“Axie is its own economy. It might have swings like any emerging market based on macro factors, but long long term we believe that our digital nation will experience high GDP growth which will spur our in-game economy.” — Jeffrey Zirlin (Head of Growth, Axie Infinity)
NFT Games — Blockchain-based games that have tokenized in-game assets that allow players to collect and sell them as non-fungible tokens (NFTs) with rewards, typically in cryptocurrency.
Blockchain technology provides decentralization, giving control back to gamers. For instance, gamers who hold the native token of a gaming platform get voting rights.
Traditionally, gaming companies have had all the control. They have raked in plenty of money from in-game transactions, yet players never really own the items they purchase. However, Blockchain games are changing this. If you buy an item in a blockchain game, only you own it, and you can do with it as you desire.
By having all digital assets in the form of NFT’s, buyers can be certain they truly have purchased a collectible item, and creators can know they’ll be paid fairly for their work. This creates a more fair and accessible marketplace, enabling gamers around the world to profit from and enjoy the game in whatever way they prefer. By creating NFTs of the digital assets, each individual retains personal ownership of their items, and can buy, sell, or trade whatever assets they want to whomever they want.
More blockchain game projects are springing up thanks to the NFT boom, signaling that this could be the future of gaming.
The unemployment rate continues to fluctuate amidst the pandemic, boosting the need for play-to-earn games like Axie Infinity. Its Vietnamese developer, Sky Mavis, reported that 29,000 of the 70,000 downloads of the game in April this year came from the Philippines.
Several cities saw a spike in cases toward the end of March, which resulted in new mandatory lockdowns. The same research found around 26 million people — nearly 25% of the population — were impacted by those latest lockdowns.
Players gain financial literacy as they get familiar with cryptocurrency through the games. With the fluctuating rate of unemployment getting many into NFT games, there’s also the possibility of these people getting into cryptocurrency through the games as well.
While the digital game knows no borders, it has really taken off in the Philippines, which has been hit hard by the pandemic. GDP contracted 9.6% in 2020, the largest annual decline ever recorded since data collection began in 1946, according to IHS Markit.
What started as small cottage-industries of individuals selling their online goods rapidly transformed into an entire industry offering full-time employment to those in developing nations. Perhaps most famously, people in Venezuela have turned to farming gold in various games for financial stability and regular paychecks — selling their digital assets to western gamers as their primary source of income.
2020 saw non-traditional “gamers” such as grandparents, cab drivers, store owners etc all turn to using a new video game to generate and sell items on the blockchain. The most notable difference between these crypto assets and the traditional gold farming was that these games actively encouraged users to create and sell their digital assets — moving control from the businesses who employed staff to farm gold, back to the individuals who played.
With the gig economy in full swing on American shores, and other Western Economies, the advent of crypto-based income from games opens up an entirely new world for those looking to start a side hustle, or even a full time business. While many of the traditional gig economy jobs revolve heavily around time or labor, the creative arts have not been monetized as quickly. New games allowing users to create their own limited edition NFT assets within the game, to be bought and sold by their peers, may open the door to an entire new class of side income to artists and other creatives.