By now you’ve certainly come across many a Bored Ape, various gif or jpeg collections, and Jack Dorsey’s first tweet in your search for NFTs. These first iterations definitely raised an eyebrow when they hit the scene during the most recent NFT craze, and some people are still confused at just what they are.

NFTs, or non-fungible tokens, are unique pieces of digital art or otherwise that people are free to buy, sell, and trade through blockchain technology. What makes them so appealing to collectors, prospective or otherwise, is that each digital item is technically considered unique. Unlike crypto currency, where the tokens are fungible (e.g. one bitcoin is exactly the same as another) NFTs are one-of-a-kind.

Recently, NFTs have made their way into the gaming world and have become wildly popular. But what do they look like in the context of a video game? Are they in-game or out-of-game? And most importantly, why?

How do NFTs Enhance Gaming?

NFTs take on many different forms when it comes to their implementation, both in-game and out. Their benefits range from purely cosmetic avatars and items, to games themselves. Let’s take a look at some examples and breakdown how they can enhance the gaming experience:

Avatars and Cosmetics: Many NFTs take the form of different avatars and/or cosmetics, whether they are different characters you can play as in-game or a unique skin for a weapon your character is wielding. This enables a high level of customization and helps players feel like the character they’ve created is one-of-kind… which they are!
In-Game Items: Plenty of developers allow NFTs as items in their games, whether they take a simpler form of something to show off in your inventory like a collectible trading card, or something more interactable like a unique pet that can partake in minigames within the game/metaverse you are playing.
Minigames: Piggybacking off of the last point, games and minigames can be NFTs. Many metaverses allow game creation tools that will allow you to create minigames using their compatible design software. You can then sell and trade these games on their marketplace, or buy one for your own.
Carry-Over Potential: One of the best ways NFTs can enhance gaming is how they give these digital items a sense of permanence. As more and more games are developed to support NFTs, the chances that the NFTs you own will be transferable in some method to future games is near-certain. Developers of metaverses and their own series of Web3 games already allow this type of crossover, and the idea that these rare items that you find will remain relevant into the future gives them more value.
Ownership: When you buy an NFT, you actually own it. It’s not like a cosmetic in traditional games you “unlock” access to for your character, which is the same cosmetic that other players can also unlock access to. It is a one-of-a-kind digital item that is yours, and is recorded in the blockchain.

NFTs can obviously take on other forms than the ones we’ve listed here, especially as the technology is perfected and developed. However, they can also enhance the experience for gamers in another way: putting the power of creation in their hands.

Who Can Make NFTs in Video Games?

This freedom of expression has never been more accessible, and is helping gamers become creators of the games and metaverses they love to spend time in. This decentralization between players and creators allows gamers to have more control over the direction of these Web3 games, and lends to a more genuine feeling of inclusion in these gaming communities knowing that you and your fellow players have some guiding power in their development.

Now more than ever, Web3 developers allow anyone to create NFTs to be used, bought, sold, or traded in their games and metaverses. There is usually software that makes designing and minting NFTs remarkably simple and are game-compatible from the moment they’re finished. Players are free to create their own items, portraits, avatars, etc. that they can then post on NFT marketplaces for other players to buy and own.

Can NFTs Make Me Money in Video Games?

As we just touched upon, much of this is all part of the “play-to-earn” ecosystem that is fostered in Web3 games, complete with their own marketplaces where players can earn real-life currency (usually in the form of crypto) through in-game NFT trading. Creating and finding NFTs in video games that you can then sell for real money seems like a purely advantageous option over traditional games, since they are functionally the same overall.

There are other ways gamers can earn crypto or fiat currency through playing Web3 games other than trading NFTs, such as:

In-Game Currency: Almost all NFT supported games offer a type of in-game currency, or multiple, for players to earn through playing the game (NFT trading aside). These currencies can be exchanged for various crypto or fiat currencies.
Renting/Lending: Aside from buying and selling NFTs, owners can choose to lease out their NFTs to groups of players so that they may play the game these NFTs are based in. These groups of players, also called “guilds,” play these games together and split earned rewards. The NFT owners are sometimes called guild managers or guild leaders, and earn profit from renting out NFTs to their guilds over time.
Breeding: Many NFT-based games involve Pokemon-like creatures that can be traded or commanded to battle each other. Each of these unique creatures is considered an NFT, but they can also be paired to breed a new NFT, taking on various attributes of the “parent” NFTs. Essentially, the term “breeding” refers to the act of minting a brand new token to put into a Web3 game’s marketplace.

As said before, Web3 games offer all the same features as traditional games, just with the bonus of a play-to-earn ecosystem that is often completely optional to players.

What Lies Ahead

NFT games are here to stay. Game developers have embraced the trend and have been working hard to develop meaningful games that incorporate NFTs in a positive way. Though there were some initial concerns with the early days of their implementation, such as the size of the carbon footprint that NFT transactions can potentially create and various money-making scams, developers have since taken steps to right these wrongs through the use of green NFTs, and increased transparency with their respective communities.

If you’re still curious about in-game NFTs or other ways NFTs can enhance the gaming experience, visit https://www.kongregate.com/ for more information.