NFT gaming, or what’s popularly known as Blockchain gaming, has seen a massive amount of funding enter the NFT gaming space. This was to start supporting the infrastructure and building out these games in total. According to a report by DappRadar statistics, gaming-related NFTs earned $4.8 billion in revenue in 2021, accounting for about 20% of all NFT sales. This included popular goods like NBA Top Shot, CryptoPunks, and Board Ape Yacht Club. Gaming is most likely one of the most significant sectors within NFTs! Honestly, it might be the biggest! But what is Blockchain Gaming? Putting it in simple words, it is a method in which digital objects found in video games—such as collectibles, weaponry, and cosmetic skins—are treated as real-world assets in the form of non-fungible tokens, comparable to stocks or bonds (NFTs). And since these NFTs are maintained on the blockchain, a public and decentralized ledger, the consumer has the right to own and transfer it. Now, an individual need not be bothered about purchasing an asset outright, before skimming through the details of its presence in the digital world. Thus, to capitalize on this increasing interest in crypto and non-fungible tokens (NFTs), gaming companies have begun researching methods to incorporate them into eSports and games. While CryptoKitties was the first game to bring gaming and blockchain together, subsequent titles gave birth to play-to-earn. This was a progressive approach that aimed to replace the traditional pay-to-play paradigm. Play-to-earn strived to keep the characteristics that players enjoy, such as great visuals, a captivating story, and engaging gameplay. This included innovative revenue models such as trading, lending, and even tournaments with cash prizes for top performers. One of the projects that helped to lay the foundations for the P2E revolution was Splinterlands. One of the games that absolutely boomed in 2021 was Axie Infinity, which put play to earn and blockchain gaming on the map. The big difference with blockchain gaming is the control it provides. Publishers here can't turn off blockchain assets by deactivating a game or deleting features from it. The value of in-game NFT objects can last beyond the lifespans of games as long as demand exists. From an Indian perspective, real-money gaming and eSports have exploded in popularity, especially since the pandemic. According to a Deloitte analysis published in 2021, India's online gaming business is predicted to grow at a CAGR (Compound Annual Growth Rate) of 40% to $2.8 billion by 2022, up from $1.1 billion in 2019. While most firms like Nazara Technologies and Totality Corp believe NFT and blockchain-based gaming to be the next growth areas for the gaming industry in India, many are hesitant to move forward owing to a lack of legislative clarity on cryptos. The regulations for the games are still in the process of development. This also implies that today’s blockchain games are "extremely primitive and unsophisticated” and still a lot of work needs to be done.
Some blockchains consume more power than specific nations, putting a burden on the environment and resulting in premiums in the form of gas fees, which are the prices paid by users to access the network. The question of whether gambling regulations should be applied to the play-to-earn paradigm, in which players acquire and lose assets, arises. Other applications, such as those in which a group of users pool their money to buy a single expensive asset, could run afoul of international securities regulators in the future. Furthermore, the usage of in-game tokens and currencies that are linked to real-world assets raises concerns about market manipulation and other potential securities law breaches. Steam banned crypto and blockchain NFT games from their platform. Also, Ubisoft received a ton of backlash for releasing and launching their very own NFT’s for their games. While future iterations of Ethereum, or other possibly more efficient blockchains, may provide a more environmentally friendly solution with lower costs, regulatory problems are more difficult to address.
Overall, anytime we establish mechanisms that favor a specific sort of conduct, we risk creating an atmosphere that encourages gambling-like behavior. But if regulators provide greater clarity, we'll have stronger frameworks, concepts, and ways of either directing individuals toward doing the right thing or actively deterring them from doing the wrong. Everything hinges on whether and how quickly the major game companies fill the pipeline.
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