Are Crypto-based Video Games Finally Having a Moment?

The Virtual Economy

During the NFT craze that hit earlier this year, eyes in the media turned to topics like digital real estate and virtual economies to help understand what exactly an NFT is. Video games in the relatively recent past have been adding features to include digital assets, among the most well known being Second Life and EVE Online.

In Second Life, players can pay other players for 3D modelled goods and digital real estate to pursue in-game projects of their own. The sky’s the limit in Second Life and even though it can theoretically expand real estate infinitely, there are still prices on it. EVE Online is a fully realized science-fiction themed anarcho-capitalist simulator. There are few if any services provided by developers and everything is privatized in EVE. Politics between player-run and owned corporations in EVE have led to conflicts that cost players, collectively, upwards of over $378,000 USD in virtual spaceship losses. Stakes like these are certainly an investment.

EVE and Second Life don’t actually support NFTs though. While player accounts and ISK, the currency of EVE, might have monetary value (although, this is a violation of CCP’s end user license agreement), you cannot directly purchase your very own spaceship with cash directly. ISK also is only usable in EVE’s virtual world. The same is true for the Linden dollars of Second Life. However, these highly immersive virtual worlds do provide a baseline concept of what video games featuring NFTs and cryptocurrency might incorporate to be successful in the future.

Gaming Meets the Blockchain

Second Life and EVE may not be blockchain compatible, there are games that are. One such example being Axie Infinity. If you’re familiar with the Pokemon franchise then Axie should be familiar. It’s a game based about cute critters that duke it out in battles to knockout the other. In addition to battling, players can also breed Axies in a seemingly endless number of combinations. Each Axie works as an NFT, so by breeding them you are creating NFTs in the game world.

Everything about the Axie economy revolves around the trading of its ETH-based token, Axie Shards (AXS). Even if you don’t play the game, you can hold these tokens and trade with players. There are strong incentives for engaging with the game. Players can trade Axies with AXS tokens or stake their tokens for weekly rewards. AXS is also compatible with other cryptocurrencies, so if you end up not liking the game you can cash out.

AXS is currently worth $43.44 per token with a market cap of 2.65 billion, way up from an earlier reported 638 million in June. This rise in market value has players in the Philippines and other developing nations jumping on the “Play-to-earn” train. In May, the lion’s share of traffic to Axie’s game servers was from the Philippines. Players reported some heartwarming success stories. The game’s economy has allowed Filipinos to buy milk for newborns, send children to school, and upgrade devices at home.

Community Compatibility

One problem that NFT-based gaming has is shoehorning itself into an already established industry. Enjin works around this by providing a monetization system for communities that already exist which revolve around a specific game. For example, Minecraft is a game known for its community-level organization. Players also have to run and maintain web servers to play multiplayer, which is where all the action is in Minecraft. Usually, this means renting a server and paying for it out of pocket. One of the many capabilities of the Enjin platform is not only hosting but trading as well. Enjin offers a plug-in that allows players on a given Minecraft server to sell items and rank in the server, adding crypto capability in a game that previously did not have it.

Minecraft has some of the most robust features from the Enjin platform. Enjin also offers community website hosting for “Guilds” in MMO games, such as World of Warcraft and Ark. Guilds are organized groups of players that often vary highly in goal. The common thread between them is that in these kinds of games, cooperation is often vital and even necessary to success and Guild structure can provide that more than trying to persuade random players you find in an in-game city for example.

Overall, the Enjin platform is highly robust and offers a variety of options ranging from development of one’s own NFT-based game, or adding crypto capability to established games and gaming communities.

Conclusions about Gaming and Crypto

With this many options for gamers and crypto holders alike, there’s definitely a future in three kinds of games that have cryptocurrency potential. The first being the old school virtual economies that have in-game NFTs. The second being games that revolve entirely around cryptocurrency and tokens, and the third being community-based add-ons that enable cryptocurrency trades in games that did not previously have it as a feature, or for in-game communities.

Of course, success in these areas depends a lot more on knowing how these games are played, in contrast to more traditional markets and trading platforms. These games rely on the labor of play to generate their in-game value, which can be very niche, so it’s important to keep in mind where the value of these tokens and NFTs come from. Players end up valuing some strange things, ranging from giant spaceships to cute virtual critters.