Play-to-earn blockchain games have become increasingly popular in 2022, providing gamers with opportunities to earn crypto.
While in the past, games were solely for entertainment, NFT games enable anyone with an internet connection and a crypto wallet to earn an income for playing and winning at their favourite online games. This unique form of gaming allows players to earn digital assets in the form of NFTs or cryptocurrency, essentially being rewarded for their skills and achievements inside the game.
In this guide we will explore the different types of crypto games and exactly how they work, as well as how you can start trading cryptocurrency and explore this new space.
Non-fungible tokens (NFTs) are unique digital tokens that “live” on a blockchain. NFTs can’t be copied and pasted, which means each item is cryptographically unique, like a digital version of the Mona Lisa.
Employing NFTs in games allows developers to create unique digital assets that are scarce. This is key to how NFT games work.
NFTs are used as in-game items, characters, and avatars that players need to successfully play a game. The value of these assets depends on their rarity and importance in the game. Players can trade these in-game assets for cryptocurrency on a marketplace, and all transactions are recorded on the blockchain.
NFT games allow players to earn cryptocurrencies for playing and provide new monetisation models for game developers.
Game developers create NFT games through the use of smart contracts that specify the rules for how the NFTs are used in-game. If you haven’t heard about smart contracts, they are self-executing code - typically involving what/if statements - that are deployed on blockchains.
Game developers can use non-fungible tokens in every area of a game's mechanics and interactions. For example, a player avatar can be an NFT, power-up items can be NFTs, weapons can be an NFT, and more.
These NFTs can be auctioned before the launch of a game to grant a few people early access or sold to raise money to fund the development of the game itself. For example, a game developer can sell game characters in an adventure game as an NFT before the game launch. Guild of Guardians raised $5.3m in their token sale of their native token GEMS in late 2021 with the game soft launching in Q1 2022.
While NFT games differ from game to game, most NFT games require you to connect your crypto wallet, purchase or collect in-game characters, play using your characters, and take part in some type of competitions or battles to win.
Additionally, most NFT games have an element of collectibles that can be won, bought, and sold to earn crypto.
Pre-alpha footage of the NFT game 'Guild of Guardians' - Source: Guild of Guardians
Game players can earn income with play-to-earn NFT games. Players can earn in different ways depending on how long they play for, including token rewards and NFT collectibles.
Most NFT games have a token, so the tokens earned are often part of the game's economics. The players' generally earn tokens as they play more often and NFTs on rare occasions. The tokens can be sold for crypto while the NFTs are tradable on the game’s marketplace.
For example, Axie Infinity is one of the most widely played play-to-earn games. The game is similar to Pokémon, where you as the ‘trainer’ acquire different types of monsters to battle for you. It requires a new player to purchase three Axies, which will cost around $1,500 to get started (there's an opportunity to get a free scholarship too).
When you start completing tasks and challenges, you can earn a token called Smooth Love Potion (SLP), which is tradable on exchanges. Players can make $1,000+ USD a month playing the popular blockchain game.
While many NFT games require some upfront investment to start playing, there are NFT games that are entirely free-to-play. That means you don’t need to buy NFTs to start playing the game.
Below are some of the titles offering a free NFT gaming experience:
There are two main ways to invest in NFT gaming: buying a game’s token or owning in-game NFTs.
Own NFT game token: You could invest in the tokens of games such as Axie Infinity (AXS) and benefit from its user growth and adoption. AXS, which is the token for Axie Infinity, is traded on major exchanges like Binance and Coinbase. Several other NFT game tokens are also tradable on popular crypto exchanges.
Own in-game NFTs: Another way to invest in NFT games is by buying in-game NFTs. These items are often bought and sold on NFT marketplaces or in the game’s native marketplaces. You could also participate in airdrops of in-game NFTs. Crypto gaming platforms like Gamestarter and GameFi, for example, offer Initial NFT Offerings (INO) for investors to buy in-game NFTs.
Yes, you can.
In places like the Philippines, gamers are earning way above the country’s minimum wage with an NFT game like Axie Infinity. Generally, there are two ways people earn from NFT games.
Yes, it's also possible to lose money playing NFT games.
The amount you can lose depends on the game you're playing, its structure, and the value of the in-game NFTs and tokens you have to purchase to play to game.
NFTs are currently traded speculatively and the value of each typically depends on what people think. If most people think an NFT is worthless or few people are taking risks in the crypto market, the NFT price could crash, leading to a loss of money.
The NFT gaming market continues to grow in 2022, with the launch of more crypto games and announcements of more on the horizon. Our list of the best NFT games available below include some that have been around the space the longest.
Other NFT games that are still in beta or will soon be released include Guild of Guardians, The Sandbox, and Illuvium.
A battle sequence in Axie Infinity - Source: Axie Infinity
Most NFT games are available to play on Windows, Android, and iOS. What you need is a crypto wallet that you can connect to the game, which will depend on the blockchain the game is built on.
If you’re a developer, you can also build your own game on the blockchain using the tools available within the crypto space.
Like with everything in the world of technology, there are benefits and drawbacks with NFT gaming. Let’s look at the most prominent.
Ownership: Unlike traditional games where big companies make all the money from in-game items, NFT games allow players to own the in-game items they earn and do with them what they want.
Provable scarcity: It’s impossible to copy and paste NFT game items and it’s verifiable on the blockchain.
Interoperability of in-game items: In-game NFTs can typically be transferred outside of the games, which opens up the possibility of interoperability between different games or gaming universes.
Quite technical: NFT games typically don’t have the best user experience and require knowledge of using decentralised wallets and interacting with blockchains.
Speculative value: NFTs are still predominantly used as speculative assets. This could incentivise users to only buy and sell these in-game NFTs rather than actually using them to play the game.
We hope that our guide on NFT gaming helps you understand the exciting new entertainment and trading aspect of crypto. Keep up to date on evolving blockchain trends here!
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