Companies across industries are scrambling to understand and figure out how to best integrate NFTs since they burst into mainstream popularity in early 2021 on the coattails of soaring interest in cryptocurrency and blockchain technology.

Video game NFTs are a type of NFT that lets gamers invest in in-game assets—a trend that some believe has the potential to change the way gaming platforms and communities operate.

In this guide, we’ll answer all your questions about video game NFTs, including what they are, where to find them, and what kind of effect they could have on how you play video games.

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What Is a Video Game NFT?

NFTs are non-fungible tokens, unique digital assets built on the blockchain that can be created, sold, and traded using cryptocurrency. A video game NFT is one that represents ownership of an in-game item or function, like a skin, feature, function, or collectible that enhances game play.

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NFT Games vs. Traditional Video Games

Both blockchain-based games and traditional online video games can integrate NFTs into their game play. The key differentiator of NFT games in either world is that you can own assets independent of the game.

Own Real-World Assets

When you play a typical massive multiplayer online game, for example, your character can collect items within the game. You might even pay money for your character to own premium items. But you own them within a closed economy, and many gaming platforms ban you from trading outside of the virtual world.

Video game NFTs, in contrast, live in your crypto wallet, just like NFTs and digital currency you collect from anywhere else. The game doesn’t own them or control how you can use them, so you can sell them to other players or collectors (above-board) and amass assets you can trade for real-world value.

Decentralized Ownership

Another major difference of NFT games on blockchain is that they’re usually owned and operated in part by players. 

Like many blockchain applications and communications, participants gain ownership and control over NFT games by earning or buying a platform’s tokens. That gives users voting power over how the platform is developed.

How NFTs Might Change Video Games

The potential for real-world value makes NFT games a new kind of earning opportunity for players—and a step toward the reality of the much-discussed metaverse.

Traditional platforms integrating NFTs into video games so far are using them in place of so-called microtransactions, a small purchase within a game that lets you unlock items, skins, features, or functionality.

Instead of making the purchase with your credit card and owning an item that lives only in the game’s code, you can purchase the item as an NFT with cryptocurrency and store the contract in your crypto wallet. This gives players autonomy over the items they pay for, and it creates a way for gaming platforms to earn on secondary sales of in-game assets through automatic royalty agreements built into NFT contracts.

Blockchain-based games are also using crypto assets to facilitate a new kind of ownership over a gaming platform that could change the way gaming communities function—if the major companies in the space are willing to hand over autonomy to players. 

Where to Play NFT Video Games

A few mainstream gaming platforms have warmed up to NFTs, though mainstream players don’t necessarily feel the same. 

Sega and Square Enix (the maker of Tomb Raider, Space Invaders, and others) have indicated plans to integrate NFTs into existing games, and Ubisoft introduced NFTs into military shooter game Ghost Recon Breakpoint in December 2021. The response to the Breakpoint integration was negative, and players were slow to buy NFTs, according to CNET.

Among crypto enthusiasts, though, NFTs are touted as the obvious future for gaming.

Platforms including Axie Infinity, CryptoKitties, Decentraland, Splinterlands, Alien Worlds, and Battle of Guardians all run on blockchain and let users play and earn—with Axie Infinity leaning into the “earn” end of that spectrum and Battle of the Guardians emphasizing “play.”

Can You Make Money Playing NFT Games?

Like with many early blockchain applications, a lot of the buzz around video game NFTs is about the possibility of earning money by collecting them. Headlines touting players’ payouts of thousands or millions of dollars fuel the fire.

NFTs and cryptocurrency are speculative markets, which means they don’t have a consistent history of performance to support predictions about how much they’ll be worth in the future. That makes buying them as an investment riskier than buying something with a much more robust history, like U.S. stocks or bonds. It also means plenty of people have been pleasantly surprised by suddenly soaring values.

Because you own the crypto assets you buy in an NFT game independent of the gaming platform, you can sell them to players or collectors outside of the platform and cash in your earnings for fiat money that has value outside of the gaming or crypto space.

However, unlike other online games, NFT games are pay-to-play. You generally have to make an upfront investment in cryptocurrency to be able to execute any meaningful actions on the platform. That could range from a few dozen to a few hundred dollars.

How to Make a Video Game NFT

Are NFT Games Legit?

Some NFT games, like CryptoKitties and Axie Infinity, have attracted thousands of users and gained significant name recognition in the crypto and gaming spaces. Players trust them, and many have found opportunities to make a regular monthly income by playing the games.

In this nascent industry, though, new platforms pop up regularly, and the environment is ripe for fraud. Look into reviews from trusted industry leaders before connecting your wallet or handing money over to a new game.

Are NFTs the Future of Video Games?

Video game NFTs are another blockchain application that has the potential to upend an entire industry if adoption is widespread—but that’s still a big “if.”

For now, the most common use of NFTs in video games is reserved for blockchain-based games, like Axie Infinity, designed for crypto enthusiasts. Players have flocked to these games for the possibility of earning money through them, but that interest could wane with the recent dip in NFT valuations.

Adoption by larger gaming companies and integration into traditional games is likely on the horizon, but could be a slow rollout as companies weigh the interest and resistance in their customers.

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