Cryptocurrency as we all know is taking the world by storm, most people have a vague understanding of what it is and almost everyone has heard of it. NFT’s on the other hand are still pretty vague to the average person (NFT or Non-Fungible Token are digital works created on the blockchain and secured on the blockchain. Think of it as a digital token that there can only ever be one of.) So what does Crypto and NFT’s have to do with Video Games? The short answer is nothing and everything at the same time.
Video games in the past in game economy vs future in game economy.
The video game industry is constantly growing and is quickly becoming one of the largest industries in the world. It wasn’t too long ago that parent’s were saying things like “Stop playing that Nintendo! It won’t ever get you anywhere!” And oh man were they wrong. Having a career in the Gaming industry can be one of the most lucrative you can find these days and it’s only going to become more lucrative as we move into the future. The gaming industry has changed it’s model many times and continues to do so every year. For the last 5 decades the gaming companies would make their money by creating a game then selling the game to the consumer. The money would pour in for the game purchase then they would begin to create a new one. Essentially they would then rinse and repeat. Create a game, sell it then make a new one. The model began to change in the mid to late 2000’s, they would still create and sell games every few years but with a minor tweak called DLC (Downloadable Content). DLC was/is expansions or add ons to a game. For example, a Car Racing game could have been released and in the game you can drive 10 different cars well the company that made the game would then release a DLC for $14.99 that added 5 new cars and 5 new racetracks for you to play with. This was a huge success as the companies would be able to bring in huge supplemental portions of cash without having to commit to a complete and costly new game development. In layman terms, more money, less cost. This was the new model that companies started to follow for the last decade. This continued until a certain game was released in 2017, some of you may be able to guess what that game was……. FORTNITE. That’s right, that game the 5-10 year old kids are playing quite literally flipped the Gaming Industry on it’s head. When Fortnite was released it came out as a free to play game meaning as long as you had the hardware to run it you could play for free. The way Fortnite makes their money is purely by selling DLC and Subscriptions that give you more access to DLC.
Video Games all have their own built in economies, these normally mimic a real economy in some way but without ties to it. For example, if I was playing WoW (World of Warcraft) and wanted to get a new sword to use I’d have to pay for it with the Gold I earn by playing the game. The same goes for almost all games, play the game, earn in game currency then spend it on new items to use. This is where Fortnite flipped the script, you can play the game for free but in order to get new “Skins” (Basically costumes for your in game character) you need to purchase Fortnite’s in Game Currency using real money. A lot of gaming companies started to switch to this business model including the behemoth called Call of Duty. So what does all of this have to do with Cryptocurrency and NFT’s? Everything. We are now starting to see games that are being built that are going to use their own Cryptocurrency as their in game currency. This is a GAME CHANGER literally (excuse the bad pun). This means that when you play a game and earn the in game currency you’ll be able to then sell that currency for Real money. This is where NFT’s come in to play. When playing a game if you get a new sword that is unique the sword will become an NFT meaning that there is only 1 in the game. This means if another player wants that sword they’ll have to buy it from you using the Crypto that is specific to the game you’re playing. Which we know you can then exchange for real money. These future games are going to follow the Fortnite example of releasing for free while requiring real money to be spent to purchase unique in game items. This is going to create unique micro – economies that will have direct interaction with the Real World economy. What does this really mean though? What it means is that we are going to see a new career classification start to emerge. The Gamer is now going to become a full time job. We’ve already seen this with Video Game Streamers and eSport leagues but essentially this is going to democratize earning money while playing games. The more popular a game is the more value the Crypto tied to it will have and the more potential there will be to earn money playing it.
Cryptocurrency is already disrupting the traditional monetary system and is going to continue to do so, now it’s going to disrupt the Video Game Industry as well. I’m extremely bullish on this as these 2 markets are in my opinion the fastest growing in the world. As we continue to see the NFT market and Crypto markets evolve and mature we’re going to see more of a move to the Metaverse (That’s a topic for a different article). This move is going to in turn create a whole new market within the Cryptocurrency infrastructure. New stock markets are going to emerge that are entirely fueled by NFT’s and Crypto. We’ve already seen the move to the digital age and the Currency that’s going to power it. I’m excited to see where the future leads.