Why the Gaming Economy Should be Decentralized through NFT Technology 


The gaming market has gained significant momentum within the past two years as the covid pandemic forced the world to stay indoors. According to projections by Fortune Business Insights, this industry is expected to grow at a CAGR of 13.2% to hit $545.98 billion by 2028. While this upward trajectory has added value to the larger gaming sector, not everyone has benefited from the capital inflow. 

Leading game publishers such as Microsoft, Tencent, Sony and Roblox are now worth billions of dollars, thanks to the booming market. Meanwhile, most of the loyal gamers have made little to nothing from these favourable conditions; in fact, the cost of acquiring in-game items on gaming ecosystems like Fortnite and Call of Duty (CoD) has gone up due to the growing demand. Is this fair to the average gamer who has committed both funds and precious time? 


The Flaw in Traditional Gaming Economies 

By design, the traditional gaming economy is built on centralized infrastructures, a few players control the space while the rest of the stakeholders take home a mere ‘experience’. While this model has been the fundamental pillar of the gaming industry for the past five decades, it is about time that gamers questioned how they can also generate monetary value from their gaming activities. 

Today, it is quite expensive to purchase a rare skin on Fortnite; however, this value can hardly be converted back to fiat money. On the contrary, gamers have to buy upgraded in-game products with every new release. A model that has proven to be quite lucrative for the centralized gaming publishers, leaving gamers with the burden of fully funding the traditional gaming industry. 

Additionally, the existing gaming space limits users to one particular ecosystem (in-game items only have value within a specific game). For instance, a Fortnite skin is not compatible with the Call of Duty (CoD) gaming environment. Should this really be the case, given that gamers spend a dime to acquire these in-game items? Well, there is a new technology that is offering a way out; Non-fungible tokens (NFTs). 

Built on blockchain technology, NFTs are indistinguishable (unique) assets that can be used to record in-game items on decentralized economies. Simply put, NFTs introduce an avenue for gamers to trade their digital collectibles or access other Decentralized Finance (DeFi) products to generate a passive income while gaming. 


NFTs and the Future of Gaming 

Last year, the NFT market recorded over $23 billion in sales, featuring as one of the most burgeoning niches in crypto. More interestingly, NFT-oriented games accounted for close to half of the total DApp activity. Looking at these developments, it is becoming more evident why traditional gaming publishers are also caving into the pressure. Both Ubisoft and Microsoft have previously signaled an intention to invest in the NFT and metaverse gaming space. 

So, how exactly do NFTs change the dynamics of the gaming ecosystem? As mentioned earlier, the decentralized nature of these on-chain assets is a primary factor in building ownership structures for in-game items. With NFTs, gamers have the ability to own and trade in-game items for external value. This model effectively eliminates the dominance of centralized gaming publishers, giving power back to the users/community. 

For example, it is now possible for a gamer to purchase an IP-patented digital firearm from the Digital Arms NFT marketplace. Unlike the centralized markets featured on traditional games, this NFT store allows users to monetize their digital collectibles by swapping them for other assets, including the native HNTR token. Digital Arms also recently partnered with Farcana, enabling its users to access the play-to-earn BTC shooter game. 

“The gun niche is definitely underexplored in NFTs and we are banking on both collectors and shooter players to make use of the NFTs.” noted Digital Arms CEO Chris Watkins. 

Besides MMORPG games, there is an ongoing evolution of the VR gaming space; NFTs are being used to design avatars that exist on the metaverse. Dubbed the Web 3.0 economy, this relatively new gaming ecosystem is not attracting crypto natives but long-standing tech titans such as Meta and Microsoft. The latter has already expressed interest in acquiring Activision Blizzard to advance its metaverse development. 



As we can see, the gaming market structure is bound to change in the coming years. This paradigm shift will mark the beginning of a new gaming economy, one that is controlled by the community instead of centralized third parties. That said, the success of tomorrow’s gaming market will undoubtedly depend on the value proposition of NFTs and the willingness of centralized gaming publishers to adopt the latest trends. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice

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