Many investors are bullish on the long-term growth potential of Non-Fungible Token (NFT) gaming. Yet the high cost of entry has created a bottleneck that keeps mass adoption at bay and puts a lid on the explosive potential of the ecosystem.
Although cryptocurrencies and NFTs are often lauded as more inclusive, democratic, and egalitarian than traditional financial assets, their implementation has not always lived up to the marketing hype. With NFT gaming, for instance, players are meant to be rewarded fairly for contributing to the game. Yet, the prohibitively expensive startup costs make for an uneven playing field.
Depending on the game, players may need to fork out several hundred dollars to acquire an NFT to get past the paywall and start playing. This means not everyone starts on the same footing, with wealthier players enjoying a privileged position.
There is a slew of other issues related to NFT gaming. Some are unrelated to pricing, such as the shallowness of game design or the general animosity traditional gamers feel toward the space. Others, such as unsustainable in-game tokenomics, are intimately linked to the upfront costs of entering the game space.
To Infinity and Beyond?
The rise and fall of Axie Infinity embodies the promise and perils of the NFT gaming ecosystem as it stands today.
At its zenith in 2021, it was the most popular NFT game. Yet this year, Axie Infinity suffered an exodus of players as its business model proved unsustainable. The drop in users dampened earning potential, leading to an in-game liquidity crisis.
The NFT price floor for Axies – the Pokemon-like creatures traded in the game – has also fallen far from its historical high of $340. As of this month, it sits at $6. Meanwhile, the value of the game's token, Smooth Love Potion (SLP), has fallen from a high of $0.40 to $0.004.
Although this plummet was at least partly reflective of a broader downturn in crypto markets generally, Axie's fall from grace points to some of the glaring structural issues in NFT gaming, and shows where things need to be improved next.
Several new initiatives and projects are trying new models to lower players' startup costs. These projects could prove vital in forging a path forward.
This month's launch of a new NFT marketplace by legacy brick-and-mortar gaming outlet GameStop is chief among them. The marketplace aims to reduce the cost of using NFTs in games dramatically. GameStop will achieve this by partnering with Ethereum Layer-2 application Immutable-X, whose StarkEx zero-knowledge proof scaling solution can bundle thousands of blockchain transactions into one, thereby lowering gas fees for players.
For its part, Immutable X has established a fund worth $100 million for NFT creators. It is also offering $150 million's worth of IMX itokens, (Immutable's native token) to be unlocked as the project's milestones are reached.
“GameStop's NFT marketplace will bring the power of an insanely strong community to its over 50 million users and every developer that launches on it, and our technology will make it faster, easier, and more affordable to do so,” Immutable Co-founder Robbie Ferguson said of the joint project.
This month also saw a new partnership between BattleFly, a blockchain game featuring weaponized AI-powered butterfly fighters, and Treasure Gaming, which describes itself as a “decentralized video game console connecting games and communities.”
Players can now use Treasure's native token, $MAGIC, which is exchanged via Arbitrum networks. Players need a minimum of only $20 worth of tokens to get started, so they can test the waters before diving right into the game.
BattleFly is a Player versus Player (PvP), Play-to-Earn (P2E) game similar to Pokemon. Players start by minting a unique Battlefly (through a “Cocoon phase”), growing and training the creature before finally competing against other players in battles for staked $MAGIC tokens.
The game is reportedly designed to ensure 75% of players come away from each battle with either a net-zero or positive outcome.
BattleFly may be a flagship game, but it is only one of a growing number of projects supported by Treasure. There are now over 50 games that use $MAGIC tokens. The platform could become a new pillar of a more inclusive infrastructure in NFT gaming if successful.
Investors vs. Players
ETHEKing is another game that is bringing a new model with an eye to cost-down affordability.
High entry costs have meant many NFT gaming novices turn to investor backing to get started in a game domain. Unfortunately, this intermediary erodes the player's earnings and means they rely on a third party to stay in the ecosystem.
To do away with this, ETHEKing is attempting to decouple the launch of the game into two distinct phases so that investor gains don't come at the player's loss. In phase one, investors can unlock passive earnings by purchasing NFT land. In contrast, the second phase involves a mobile strategy game (yet to be released) that allows players to construct and further develop this land to earn in-game coins.
Then there is Attack Wagon, a blockchain game studio tearing down the cost barriers completely. In terms of the games themselves, the developers aim to build a game driven by a strong narrative, stylized with a unique visual aesthetic. The first game it created is Scrap Guilds, a Sci-Fi Role-playing game (RPG) set in space involving scrap smugglers who build battleships and have shootouts for loot.
Attack Wagon combines ‘Free to Play' (F2P) and ‘Play to Earn' (P2E) into a ‘Free to Earn' (F2E) model, so players can start earning from zero. The games are monetized using the studio's native token, Attack Wagon token ($ATK), which can be used interchangeably between its upcoming titles.
NFT games have a long way to go until they match the mass adoption of their counterparts in the traditional gaming sector. NFT game designers can only improve the game experience if there is a vibrant community that provides them with the proper feedback. Critical to that is enabling more users to try out the games at a minimal cost. Going forward, investors and players alike will be hoping more is done to ensure NFT gaming is affordable for the average player.
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