NFTs & Cryptocurrency in Gaming

Joel GunnerDec 20, '21

NFT, Crypto, Blockchain - are these words from an alien language? Not quite, they are English, but still confusing. Puzzling maybe, important certainly. We talk about these concepts as they move towards the gaming sphere. 

Almost all industries have some rather arcane and intriguing pockets that burrow their way into the community, the oft wacky world of gaming is no stranger to unorthodox sects of users causing a stir. In the world of finance and trading, it is NFTs, Blockchain, and Cryptocurrencies that dominate the whispers and buzz much to the chagrin of the traditionalists. To those who aren’t involved in or fully perceive this emerging world, terms like Blockchain can sound like an entirely different language; a slightly unnerving prospect – it’s not pleasant to feel behind the curve when you don’t know what the curve is and how it might impact you. Now, here at Electric Games we aren’t exactly the moguls of investing – we like playing Mario – but we know all about gaming, so we can tell you all you need to know about the seeping of NFTs and Cryptocurrency into gaming and how they could cooperate.

The introduction of NFTs to gaming

All hell let loose when Ubisoft announced a desire to introduce their proprietary Quartz Platform into the unfolding Tom Clancy title Ghost Recon Breakpoint, with some praising the decision and some thoroughly vilifying it. Ubisoft are the first company in the industry to actively manoeuvre itself into these emerging trends, automatically giving the nod to other companies to join the ride - Fable series creator Peter Molyneux has already vowed to include Blockchain and NFT components into future games built by his company, 22cans. The first of which is called Gala Games featured title named Legacy, a business sim with its own custom-built Cryptocurrency, LegacyCoin. Pretty crazy, eh? Anyhow, back to Quartz! The platform instigated a free-drop of products on December 9th, allowing players to buy, utilise and sell in-game NFT items, referred to as digits, such as vehicles, weapons, armour and what have you. A growing body of rumours and predictions surround the esoteric NFT and Crypto sphere; we’re going to explain exactly what they are and why some gaming companies seek to integrate them into their IPs.

Public reaction to Ubisoft Quartz Platform

It’s important first to reiterate that Ubisoft’s decision was not well-received at all - NFTs and Cryptocurrencies are controversial topics - of doubtful authenticity to some, laborious or impossible to comprehend for others. Some were even irked by the environmentally damaging prospects NFTs present despite Ubisoft’s aim to placate these concerns with ostensibly legitimate and ‘energy-efficient’ production and storage. Anyhow, frustration and upset aside, to fully grasp the issues at hand and how the future of gaming may be affected, we need to know our way around the concepts of NFTs, Blockchain and Cryptocurrency.

What is an NFT?

An NFT, a non-fungible token, essentially represents a product; videos, sports cards, pieces of art, a GIF, a song – an online world of Collector’s items. NFTs are frequently one-of-a-kind, inscribed with a unique digital signature denoting who owns the token – this code guarantees the security and ownership of the item, meaning it cannot be replicated or stolen. For example, if you were to watch a clip of an iconic Cristiano Ronaldo free-kick, of which there are inevitably hundreds of the same clip, you can buy one – it is yours, and you therefore choose what you do with it. The enterprising among us will one day soon buy and sell NFT’s, frequently trading them for hundreds of thousands of dollars or a cryptocurrency. It is not just your forward-thinking trader interested in NFTs; John Cena, Grimes, A$AP Rocky and other notable figures are availing themselves of a chance to generate more income by placing branded NFTs of on the market. Here lies a problem, though: like stocks and shares, NFTs can rise and fall in value, making them an inherently risky buy. If you buy an NFT of a GIF representing an actor, and that actor becomes embroiled in a media-frenzied controversy, you and your wallet could suffer the consequences. In fact, some authorities are pressuring governing bodies to deem describing buying NFTs an ‘investment’ a misleading and dangerous concept. You might win, you might also lose.

The line between Crypto and the NFT

So, where does Cryptocurrency fit into all this? Well, Cryptocurrency and NFTs spring from the same form of programming, yet that’s where they veer off from one another. Units of a particular Cryptocurrency, like physical fiat-based currency, are equal in value; a £5 note is a £5 note, the same can be said with Cryptocurrency like Ethereum – 1 Ethereum is 1 Ethereum. Of course, Crypto is a digital tender, held in a publicly managed and viewable record ledger named Blockchain, an alternative to a bank that prevents fraudulent activity. So long as the Cryptocurrency in question is recognised, established, and stable (unlike Squid Coin), the risk is comparable to that of investing in your standard index of stocks and shares; Cryptocurrencies can too be traded to yield a return… or a loss. Unlike NFTs, many of the same Cryptocurrency are identical and numerous, there are 19 million Bitcoins in circulation, all of them an exact replica of one another, at the time of writing. Every Bitcoin, of which 2 million remain ‘unmined’, is currently worth £36,500, producing a collective value of £700 billion. That’s a lot of money! On the other hand, where one Bitcoin is today worth £36,500, NFTs can often sell for several-fold higher. One NFT titled ‘Everydays: The First 5000 Days’, a mosaic of digital abstractions by an artist referred to as Beeple, sold recently for just under $70 million, bought by tech entrepreneur MetaKovan. NFTs ultimately produce ‘digital scarcity’ – this idea underpins their value - making them exclusive or extremely limited edition and therefore non-fungible. Whereas Bitcoin are fungible but uncommon with exciting potential for use in the future, NFTs are one of a kind and non-fungible, presenting a unique and lucrative opportunity for those willing to step outside the box and endure whatever risk lay there.

What does the future of gaming look like?

OK – now we are through with the explanations, how on Earth do Cryptocurrency and NFTs relate to the gaming industry? Just last month, Electronic Arts CEO Andrew Wilson affirmed that both were ‘the future of our industry’ but has so far been ambiguous as to how that would be the case. NFTs, as has already begun with Ubisoft, grant a potential investment to players in the form of unique items within the game, perhaps even with perks and abilities tied specifically to that item. Players would intently slave away to earn items often only to sell them; gaming would become less a leisure activity that are partaken in just for fun, there’s a financial reward for doing so too. More, Cryptocurrency may be able to buy the game itself, the right to trade NFTs and the NFTs themselves – you might not use the Pound Sterling, Euro or Dollar to purchase the game, its functions or in-game content, you might use a widely used or proprietary cryptocurrency. Companies might argue that this move encompasses the players, involving them and giving them monetary stakes, yet many gamers believe this is likely a move with an ulterior motive that will pay dividends back to the company. Why else integrate these systems?

The attention and dialogue surrounding Cryptocurrency and NFTs is, in the mind of many, commensurate with the extent of its place in the future financial market. The assimilation of both into the gaming world could take many forms, I suppose that’s the beauty of the digital world – the beaten track is always changing, new paths are always emerging and practically impossible to predict. It’s an exciting time to be a gamer, we’ve lived through ten years of some of the greatest technological proliferation yet seen, going from the swan song of Xbox 360 to the inauguration of the Xbox Series X in 8 years. Now, with generation-nine tech security situated, the tenth iteration beckons – who knows, perhaps NFTs and Cryptocurrencies will play a fundamental role in its success... or downfall? We know how the initial introduction of these factors to gaming may look as described above, but beyond that is an event horizon that is as challenging to envisage as it is rousing.

Leave a comment