Cryptocurrency

NFT in Games Explained: Its Role, Benefits, and Limitations

NFT in gaming is an underserved market. Nonetheless, it will generate $4.5 billion in revenue in 2021, accounting for over 20% of all NFT sales last year. Players love how NFTs transform them into decision-makers and owners of their favorite games. And as technology advances, more game developers will incorporate NFTs into their games.
While market experts predict a positive future for this trend, Risingmax Inc is keeping an eye on the role of NFT in games while anticipating potential problems. We know that incorporating the NFT component into existing games takes work. Please contact us as soon as possible if you require NFT Game Development services.

As in the well-known case of Ghost Recon Breakpoint, instead of creating an impact as the first game from a major publisher to feature an NFT component, it was widely panned and deride by users. The company’s inability to effectively integrate an NFT component was most likely the root of the reaction.
So, to paint a more realistic image, we’ll show you some instances and emphasize the advantages of incorporating NFT into your new or existing gaming projects. Then we’ll talk about various roadblocks you might encounter along the way.

NFT in games strengthens the concept of play-to-earn games

Although NFT is still in its early stages in gaming, it is widely seen as one of the industry’s most important 2022 trends. According to Global Market Estimates, the global NFT market will expand 185% by 2026, with gamers inevitably contributing to this expansion.
People play normal games for pure enjoyment, but blockchain gaming allows them to make money. NFT has become an important component of the creation of play-to-earn (P2E) games, in which players earn digital assets with real-world value that they can rent out or sell on NFT marketplaces for fiat or cryptocurrency. NFTs in video games generally represent guns, armor, virtual real estate, and other inventory items.

Owning an NFT can signify social standing in the digital world, much as wearing luxury products improve social status in real life. Users purchase NFTs to personalize their game experience and to make their characters stand out. And pay a lot of money for it. In 2020, gamers will have spent approximately $54 billion on additional game content.

But enough with the theory. Let’s look at some of the most impressive examples of NFT in games:

Axie Infinity
One of the most notable NFT projects with intricate economic ecosystems is Axie Infinity, a Pokemon-inspired metaverse. Tokens (the game’s currency) can be obtain by breeding monsters known as Axies for use in battle.

Illuvium
Illuvium is a multiplayer and battler NFT game in 3D. Its major goal is to pursue and capture deity-like entities known as Illuvial. On June 5, 2022, Illuvium sold digital land parcels for more than $72 million.

Tamadoge
Tamadoge is a popular mass-market game. Users can relive the Tamagotchi experience from the early 2000s, but this time they can raise NFT dogs and earn money as a bonus. The move-to-earn function encourages owners to walk their pets and receive rewards. Tamadoge had already raised $11.5 million during its presale round when this story was written.
These numbers appear positive, but let’s wait to jump to conclusions before learning more about NFT’s impact on important gaming KPIs.

Why are businesses investing in the creation of NFT games?

Trust us, NFT can have a positive impact on significant gaming KPIs. Of course, only if it’s done correctly. Examine it for yourself.

ROI (return on investment)
Players consider crypto games as entertainment and a source of revenue, which is a compelling reason to participate. My Crypto Heroes, for example, boasts one of the greatest ROIs in the gaming business – up to 20% every month. Not bad at all.

Total number of active users
The number of active users in your game will increase directly to the popularity of NFT games. The NFT metaverse Alien Worlds had 1,160,000 more users in January 2022 than the other two major blockchain games, Splinterlands, and Galaxy Blocks combined.

The average revenue per user (ARPU)
As you may be aware, this is one of the most important monetization measures in-game analytics, and investors use it to assess the performance of projects in which they have invested.

The average revenue generated by an active user over a certain period is refer to as ARPU. In addition to providing digital products as game inventory, game developers may charge a transaction fee when players sell or trade their NFTs to increase ARPU. For example, on the mobile P2E platform Arc8, gamers must pay an admission fee to participate in tournaments and make game purchases.

Average check
This KPI is similar to ARPU in that it computes average revenue per transaction. Divide the payment by the number of transactions to get your average check. As the prices of digital NFT assets rise dramatically, so makes the average money generated by transaction fees by game developers.

Concurrent users (CCU)
It refers to the total number of persons who are playing the game at the same time. Many fans of NFT games are looking forward to the next release. For example, Thetan Arena, an e-sports crypto game, attracted 150,000 participants simultaneously. This figure is a new high for NFT games on the market.

Customer satisfaction score (CSAT) and downloads
Progressive gamers continue to be impressed by the NFT gaming innovation, pushed by the Metaverse concept, blockchain, and extended reality. But are you up for the challenge?
The CSAT statistic will genuinely reflect how satisfied your NFT game’s participants are. You’ll need to roll up your sleeves and conduct a survey among gamers to measure this KPI. Once you obtain the findings, divide the total number of responses by the number of players who gave your game the highest rating.

Customer lifetime value (CLT)
This indicator represents a company’s total money from a single user throughout their gameplay. This KPI represents the market value of your game from a business aspect. When organizations utilize gamification and NFT together, they get a unique, new technique to appeal to both present and potential customers and keep them using your product. Roughly 34% are interest in buying a video game NFT.

Customer retention rate
This game metric indicates how many users a game retains over time. According to DappRadar, the average customer retention percentage in NFT games is 75%, which is remarkable. NFTs can reward client loyalty and even transform them into ambassadors for gaming solutions. The strategy works because as the company grows, so does the value of the NFT. It’s a win-win situation for everyone.

However, NFT’s beneficial impact on main game measures is one of its many advantages. Continue reading to see how NFT can help with P2E game development.

Limitations of NFT in games to be aware

Despite the widespread excitement, we must ignore several limitations to incorporating NFTs into games. The popularity of NFT games continues to rise, and it’s not unexpected that there are many unanswered questions. Furthermore, even fiat currency cannot guarantee stability in these volatile times.

Having stated that below are the limits that prevent NFT from being widely utilized in games:

  • Manipulation of the market. NFTs, although safeguarded, provide space for guesswork. This may encourage players to buy and sell NFTs in-game rather than use them to participate in gaming.
  • NFT is being compare to an economic bubble. Some observers have likened the present buying frenzy for NFT assets to a financial bubble that will inevitably collapse. Of course, many NFTs have already demonstrated their worth and potential for expansion. However, remember that not all digital assets are equal in value. The NFT value is mostly determined by utility. For example, the virtual asset “Flying Falcon” from the Ethereum-based game Axie Infinity was auctioned off for $1.5 million. Although this land may not be worth much in the real world, it is extremely valuable in the game.
  • The dangers of gaming promotion As previously said, the performance of the company has a direct impact on the value of the NFTs. Therefore it is always changing. This fact may lead to gambling activities using digital assets.

However, if you’re serious about launching NFTs within your gaming project, don’t allow these constraints to deter you. Furthermore, they are all doable if you work with a game production company that will help you through the full NFT development process.

What can you do to keep the advantages of NFT in games?

After you’ve mastered the fundamentals of NFT in games, the next natural question is where to begin. Here’s an overview of how to properly incorporate NFT into a certain game.

  • Design your game’s economics with care. This is a critical component of your NFT game’s success. Assume you devise an effective approach for implementing NFT into your game. In that instance, you can eliminate potential restraints like market manipulation and gambling, attract more consumers, and increase income.
  • Make a set of smart contracts to help you with your approach. Smart contracts establish the properties of your digital assets, such as ownership and creation time and place. Smart contracts demonstrate the uniqueness of a specific crypto asset and protect it from counterfeit certificates.
  • Marketplaces can be use to promote exchanging assets. If you’re running a P2E game, you’ll need to set up an NFT marketplace so players can trade and exchange stuff in-game.
  • Select a reputable blockchain development partner. Using gaming NFT in collaboration with the right game production business will raise the worth of your game. So, to establish a viable solution and keep your gamers interested, try working with or consulting with specialists who understand blockchain and NFT technology.

Finally, to optimize the benefits of NFT gaming, focus on the value each NFT asset offers to the players rather than being carried away by the sheer volume of NFT assets.

Conclusion

NFT in games is a fantastic asset that provides benefits that traditional games do not, such as allowing players to make money in-game or expediting the game developer’s ROI. NFT assets can also boast a high level of security thanks to blockchain technology. It also assures that digital assets are “future-proofed,” even if the game is no longer in production. We could go on and on about the in-game NFT experience, but let us say this: if you’re thinking about doing something like that, Rising ax Inc will help you stay on top of the latest NFT trends and make wise investments. Don’t hesitate to contact us if you have queries about NFT token development services or games.

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