While the notion of playing to earn NFT games in return for real money is not new, it has increased in popularity as online communities have expanded in size and become a multibillion-dollar industry. Many Venezuelans turned to gold farming as their primary source of income after learning that it offered more financial stability than more conventional forms of job. When this happened, the country made international news. The technique has gained widespread acceptance to the point that it now has its own page on Wikipedia and an item in the Encyclopedia Britannica.
The majority of game companies forbid Gold Farming and other forms of monetary exchange of in-game commodities or account transfers in their very restrictive Terms of Service (ToS) agreements.
While these approaches are intended to protect the community, they are more likely to be used to create control over the in-game economy, limit exposure to KYC/AML rules, and maximize income than for any other reason. As a consequence of these regulations, individual players are unable to draw value from assets obtained or gained via play to earn NFT games.
As a consequence of the limitation on exchange, players will be unable to resell previously purchased things, proving that they do not really own the products they buy. As a consequence of these methods, some players have been forced into the grey markets, where they face counterparty risks and account suspensions, which may result in the assets being snatched away if caught.
A legal and open market for goods makes it almost impossible for customers to recuperate some of their earlier purchases, much alone profit from their accounts and virtual objects obtained while gaming. As a consequence, these restricted systems may limit the economic potential of these gaming communities, all the more so given that game publishers maintain rights to participate in their development.
However, as blockchain technology spreads around the world, new game economic models are emerging. As a consequence of the COVID-19 lockdowns, a substantial number of non-traditional gamers in the Philippines shifted to crypto-based video NFT games to augment their income in 2020. Grandparents, single mothers, and taxi drivers have all been seen in the country using video NFT games to augment their incomes by playing, manufacturing, and transferring digital assets that they might then sell on public blockchain exchanges to convert their gains to cash.
What differentiates these earn-a-living NFT games from massively multiplayer online earn-a-living NFT games? Gold Farming NFT games are centered on open economics, the elimination of restrictive Terms of Service, and the utilization of cutting-edge technology like as blockchain-based Non-Fungible Tokens (NFTs). By providing ownership of commodities bought or earned, these new models enable individuals to reclaim control of their life.
Gaming the System is a collection of rules that control the way things operate.
As early computer NFT games evolved from boxed products to continuous-play online services, some aspects of game design changed in lockstep. Clients gained long-term experiences via online play to earn NFT games, forcing the growth of corporate structures to keep up with the trends. Subscriptions and, later, micro-transactions were introduced, enabling users to make incremental on-demand purchases in tiny quantities. Regrettably, numerous elements of the game’s design had components that were incompatible with the remaining new models. Randomized “Loot Boxes” provided incentive and reward for early video game players to obtain NFT games, despite the fact that they had nothing to do with commercialization in single-purchase, packaged-goods game cartridges at the time of their release.
Certain publishers may be able to monetise these randomized game assets by including them into their play to earn NFT games as microtransactions. If this behavior is pushed to its logical conclusion, it may be called a kind of gambling. On the other hand, successful “Free to Play” play to earn NFT games focus on keeping their most devoted players by providing them with the chance to accelerate their game progress.
Unfortunately, this may irritate some players, resulting in a lack of desire to pay and putting the burden of funding the game squarely on the shoulders of a tiny segment of the player base, which may be damaging to the game’s revenue streams. A game’s design that rewards high-spending players may aggravate and further stratify the player base.
What, therefore, do gamers find alluring? The virtual world, it turns out, is a mirror of the real world. Players enjoy amassing limited-edition digital products and expressing themselves socially via the customisation of their virtual identities and virtual environs. The cosmetics sector, on its own, is estimated to be worth $40 billion annually and is growing at a pace of 5% each year. The application of blockchain technology to paid cosmetics and virtual goods has the potential to catalyze the development of new economic models for the gaming industry – models that are likely to be dominated by non-financial institutions (NFTs) that give players ownership over their purchases while sharing resale revenue with developers and adding economic value to the game community.
What Does This Mean for Investing and How Can It Benefit Investors?
While many investors will turn to large, publicly traded organizations for market direction, astute industry players will monitor and wait to see how younger, more nimble companies perform before adopting these new market practices. They are more inclined to take a wait-and-see stance, enabling independents to take risks and evaluate the validity of ideas while they observe the situation. Their objective is to join the market later, often by acquiring and executing creative ideas that have been shown to be profitable.
This is an incredible opportunity for entrepreneurs, independent developers, and investors to participate in a new enterprise on the first floor. Although the notion of creator-based economies is not new, blockchain technology has the potential to expand their reach and push growth to previously imagined heights. Through the use of cryptoeconomics, gamer communities may contribute to the success of the game by earning tokens for the NFT games they like.
People all across the world are closely monitoring the current cryptocurrency and NFT frenzy and speculating on what will happen over the next 12 months. However, prudent investors and developers will look forward 3-5 years, when this technology and the new business models that will emerge as a consequence of it will face a “make or break” moment. If high-quality play-to-earn NFT games are presented to the market, blockchain-enabled open economies have the potential to become the fastest-growing segment of a market worth close to $200 billion.