UNIVERSE ISLAND

The global video gaming market has been well established for over two decades now. However, it has experienced immense growth over the past few years. This industry is one of the few that has overcome insurmountable regulatory odds to establish its presence, and today it stands out as one of the global technology industries with the highest adoption numbers, with a current market of over 2.7 billion gamers worldwide and a predicted CAGR of 12% between 2020-2025*.

The purchase of in-game digital content/objects is commonplace in the gaming market. In 2020, gamers spent approximately $54 billion purchasing in-game content. However, the old model of in-game purchases being the equivalent of simple record amendments on the internal game databases hosted on game servers gave gamers no ‘proof’ or ‘claim’ of proprietary rights over their in-game purchases. NFTs disrupt this old model by transferring the ownership rights of ‘uniquely identifiable’ in-game purchases into the hands of the gamers, enabling proper monetization of unique virtual assets that facilitate the creation of legitimate and immersive metaverses.

NFTs has unlocked the recently emergent phenomena of ‘play-to-earn’ games, which combine the best of both gaming and cryptocurrency industries and leverage this power to create transformative self-contained economic incentive systems realized through the simple act of playing video games, just empowered by a blockchain!

The dynamics of gamers interacting with games and in-app purchases changes drastically with the introduction of NFTs in the space. Players have a much higher incentive to play the games as the more time, effort and skill they invest, the higher the in-game rewards they have access to. There is a low probability of any diminishing marginal utility for the players as well. Meanwhile, gaming companies have an incentive to reward players contributing significantly to the game and adding value, thereby creating synergy on their platforms. When in-game objects are tokenized, it allows for clear ownership rights over the objects - NFTs.

The player has many more options to choose what to do with the NFT, e.g. selling it on a secondary market, using it in the game, or displaying it as a collectable. It also allows players to retain the value of their in-game objects, even if they decide to shift to another game. The development of NFTs in games signifies a brilliant implementation for gamers and game developers alike, creating diverse, engaging and monetarily advantageous avenues.