Before we get started when I’m talking about NFTs (Non-Fungible Tokens) in video games I’m usually talking about actual useable items for the player in most instances. These will be things like weapons, armor, transportation, houses, land, and so forth. What I’m not talking about most of the time is game artwork that has zero use other than sitting pretty on a wall or making your character look nice. The expectation is NFT game assets are being used by game developers.

• Part 1: The Gamer Dilemma | Players Fight Against NFTs In Video Games

Table of Contents

• NFT And Blockchain Data
• Fungible Token
• NFTs and FTs For Game Developers
• Beyond A Single Game
• Beyond A Single Blockchain
• Burning
• Duplicates Exploiting
• Increased Security
• Real Money Trading Aka RMT
• Final Thoughts

NFT and Blockchain Data

Items have a history we often just don’t get to know about it. Storytelling in video games is an important thing for many genres out there. One thing that never really gets explored enough is the history of an item itself beyond some background lore.

NFTs are after all Non-Fungible Tokens. Once it’s created on the blockchain there is no going back without burning the item itself and recreating a slightly different version to replace it with. This ensures the information that is stored as an NFT can’t be tampered with and can be verified as unique the more blockchains a transaction on a blockchain has been confirmed. This gives the player confidence of what they are holding in their wallet is going to remain unchanged and is not a counterfeit over the long run.

Ensuring an item is never going to degrade over time and is the real deal is something physical gaming has struggled with since the dawn of time. I mean that guy you bought a $50k card from for $50 in the back of the alley for sure was selling you the real thing. it’s a shame it was lost in a boating accident as you defiantly did not find out it was fake. Which if I was an NFT on a blockchain you could have verified not only the price history, who owned it but the item itself.

You also have to remember if a game wipes its database the blockchain data as an NFT still lives on. Which for the player means once they have confirmed their wallet to an account all their items are back. Now if the game developer chooses to accept those items back into their game after a wipe is a whole other story.

I feel there are going to be a lot of fun things in the NFT space that we have not fully realized yet. One of them is going to be the item’s owner. While it might not be important to all gamers who owned an item and how they acquired it. This helps add to the lore of that item itself giving us tangible proof that some insane story had some backing of blockchain data.

In non-nft games, they have attempted a few times to showcase some way of who owned an item. Usually, a player has to buy a “tag” in a microtransaction shop. They then attach that tag to the item and it displays their user name. In other cases in some crafting games for example they will display who crafted that item.

With NFTs, you have the blockchain displaying every interaction that item ever had. From the account, it was created into existent from up to who burned it if it ends up going that way.

The item in the blockchain data will include things like when it was crafted and all the materials that were burned in the making of it. All those items were gathered by someone usually many players. Adding yet another layer of the story and the creation of the item.

It goes beyond just that. You might be looking for a player to craft an item but you don’t know who to trust or even has the skills to do so. Usually, this is solved by people posting a crafting post on a form and if people are willing they take a screenshot of the trade afterward. With an NFT you have actual blockchain data to back up what took place between two parties.

There is also going to be a lot of metadata that some gamers will be thrilled poring over. Is there a limited supply and how many have been created? Who owns an item you are looking to buy? Is it a legit verified item? When was it created? Who created it? How was it created?

This can also help solve the whole “streamer rng” situation where people swear streamers in some games play on special servers with higher drop rates. Sooner or later people will find the blockchain account associated with that streamer if NFTs are involved and they will be able to see for themselves if anything fishy is going on.

I’m sure we all have played on a private server where mods or the owner themselves spawned in a bunch of items so they can pawn everyone in sight. Would it not have been nice to look at the blockchain data for that game and see a truckload of the best items in the game were minted all at once and transferred to a single account? Blockchain data is beyond just a single game being confirmed by validators around the world.

Fungible Token

Fungible Token FTs are seen in a lot of blockchain games and a lot of players don’t even know about it. FTs are often seen as non-unique and give flexibility to the game developer while also being cheaper to handle in terms of data storage. Think in terms of a game's currency. If every single gold piece out of 100 trillion in a game has to be unique the storage costs of that data alone are rather unreasonable.

FTs are often interchangeable with the word NFT which is although incorrect is how it is. FTs are more than likely the real culprit for a lot of NFT hate but there is only so much one person can do. A lot of people doing shady things are selling the player FTs and not NFTs.

A lot of games out there are also rather misleading the player. They say they are an NFT game when in reality they are an FT game. More times than not they will create some unique one-of-a-kind items so technically they can call themselves an NFT game despite the bulk of items being NFTs. There is still a long way for the industry in pinning down definitions and what can be classified as what.

NFTs and FTs For Game Developers

The biggest thing for NFTs and FTs in video games has nothing to do with gamers at least at the ground level. I know that might be a mind-blowing thought. As a game developer when making a game dealing with copyright and asset management can be a nightmare.

Every month I have people contact me offering music for my games. The issue is a lot of it is questionable if they are the ones who created it which is difficult to confirm. The other part is having clear rights to who can do what.

Music is quite a nightmare for a game developer to deal with if they are trying to outsource it or contract someone for the work. There is a good chance you end up in court over it where the musician claims they were not paid fairly. Formats for music change over time and people always want more for past work even if it was never agreed on.

The other issue is if you buy the music you do so for use in your video game. What is usually not included is transfer usage to the players. There are a lot of shady music sellers out there who want to give game developers free music that will go and claim/strike DMC takedown anyone else that uploads a video with their music in it. Even if it is someone just playing that game and the music was nothing but background sound for a short moment.

What gets confusing for mid to larger game development studios is when they get bought out or sold. Believe it or not a lot of things do not come with transferable rights to a new copyright holder aka the company buying them out.

They might think they have the right to use certain music or even the right to remaster an older game. When there are thousands to hundreds of thousands of assets all with different copyright agreements. Mistakes are made, paperwork gets the loss. Somebody at some point is getting sued for using an asset in a manner they don’t have a right to.

While having NFT assets buyable for game developers I would consider to be quiet in the early stages. It will help lead the industry into a better understanding of who owns what. What rights do they have without any nonsense of off-the-books talk? Along with a clear chain of custody of said assets forever on a blockchain. That can be easy to audit.

I have never worked for a giant gaming company I can only assume there are quite a few closed system options in trying to keep track of copyright. With the number of lawsuits, you tend to see over this stuff. It seems that part of the industry needs an update, to say the least. Even more so when people who are not even the copyright holder are copyright striking people and filing lawsuits.

Beyond A Single Game

While I think there is going to be a lot of innovation in the NFT space and that we are still in the early phase of what all you can do with it. There are some amazing things within the gaming space that people are already coming up with.

Unlike a normal game asset where you are restricted to a game server or say the studio's network. With an NFT the sky is the limit. A game developer can be as restrictive or open about NFT usage as they want.

Imagen for a moment you are some badass gamer in your younger years. You slay some once-in-a-lifetime boss that drops a unique item. Everywhere you go in that game people see you with that item and ask “what is that?” Reminds me of my younger years getting a server first kill in a game and was known for having a certain weapon.

One day you are going to quit the game or it’s going to shut down. All those memories tied to items I guess will have to live in a screenshot? No, you deleted that screenshot, or did it get lost? It’s an NFT? That is right it’s an NFT. It’s not trapped in a single game; unless that game is not letting something it claims you own be moved to your wallet.

I have had an instance of playing early access games that have not done so well and are dead or have shut down. While I can’t use those items anymore in those games that I acquired them in. They are sitting in my wallet on a blockchain and can be traded on different exchanges.

That is however not as far as it can be taken. There are many blockchains out there and projects within the crypto space that are playing around with the idea that certain items can be used in other games if those games choose to allow it.

Some blockchains such as Enjin call it multiverse items. These are quite rare items that can be used in some way or another across any game on that blockchain that permits such items. Giving that item unity and use for possibility forever.

That is the beauty of blockchain and NFTs. Your blockchain wallet suddenly becomes your gaming wallet. Game developers and studios collaborating in interesting and I can only assume strange ways is going be something we will see develop over time.

Universal items are also not the only thing. Some games out there are also playing around with allowing some forms of yield farming with other games items. Now I do think this can be a bit risky as oftentimes you are transferring your items over to that game’s wallet and they hold it while you get their tokens.

I have talked about one such instance I’ve given it a try in another post Staking My First Game NTFs. More times than not to reduce the risk you are using low-value items that you are holding for the long run waiting for them to increase in value.

In some instances being able to yield farm in another game has been the sole reason an item even had any value. I recall on Wax I was farming this one item like crazy in a game and it had zero use case in the actual game it came out of (that part was still in development). In a different game, it had quite a high value. Once that value dropped in the secondary game it crashed the price in the main game for that item since it still lacked a use case at the time. What an interesting outcome that was.

The crazy thing about all of this is I could tomorrow start working on a game that accepts items from a bunch of different games. Never contact those games telling them that what I’m doing. Those items could be pulling blockchain data and displaying it as is without me stealing it. While I’m sure there will be quite a lot of legal battles over people doing this. This is something normal games have struggled with implementing even between different versions of their game.

Another place NFTs are going to have a fun place in gamer's hearts will be player housing. Imagen if that unique item I talked about earlier you acquired in one game could be displayed in your player house in another? The memories and conversation piece that will create is almost priceless as the years move forward. Better than a game achievement displayed in a user profile on a single platform could ever hope to be.

Beyond A Single Blockchain

Now for those that want to say cool maybe an item could live beyond the game but it’s still trapped on a single blockchain. That is wrong again if the developer or that blockchain wants to have a way for that item to be transferred in some way elsewhere.

One game I play is Splinterlands. There are a bunch of different blockchain wallets that can be connected to a single account. Not to mention because those developers put in the time there are Splinterland assets on multiple different blockchains.

Asset swamping between blockchains is quite rare to see and very early still in this industry. Usually, the player is not so much swapping as they are burning one asset for another. In many instances, in games, a player ends up sending the item to a burn address where it gets destroyed on one blockchain, and then it’s minted on another. That will mean in many instances the game still needs a server active issuing those NFT assets. Unless minting is done outside of the game which I think we will see quite a lot of in the coming years as solutions are created.

I’m willing to admit I’m not the most knowledgeable on swamping, wrapping, atomic swamping between blockchains, and all the crazy stuff going on in the forefronts of the industry. I however will not be surprised when you start seeing more blockchains, games, and the like playing with each in different ways even if they don’t want to.

The opportunity for cross-promotion and use between different platforms, games, and blockchains will be bigger than console players and pc players being able to play with each other on the same server. The ability to do so has always suffered from massive legal issues between the console companies and other individuals not wanting to play nice with each other to make it happen. Once NFTs are let out of the bag good luck trying to say where they can and cannot exist.

Burning

While I’ve briefly touched on item burning this is going to be one utility a lot of game assets could have a way to give an item value. While breaking down items in a game is nothing new. Burning an NFT on the other hand can bring new things to the table.

You will have your classic destroy an item via burning and get currency or material for that game. That is nothing new and while kind of exciting not so much. At the very least it can help create a floor value for the burn amount. Not to mention as the supply is reduced it could cause upward pressure on the price.

Burning I think is going to shine when it comes to what kind of contracts a blockchain has and how a game developer can take advantage of it. There is no reason whatsoever burning an item in one game can’t give you something outside of that game on a blockchain.

One thing we have already started to see are items having burn value for the crypto of the blockchain it was minted on. Blockchains like Enjin have items that the game developer pays a minting fee. That minting fee can include quite a few Enj that the player gets when it burns the item. It also locks up Enj into that item that may never get released ever again.

That is however just the start. Once you start talking about immutable contracts that can guarantee something occurs on executed that is the game-changer. You could reward the player with NFT items in another game, wrapped eth, a storyline.

I won’t even be shocked if we one day see the ability to burn an item NFT to receive a physical good that gets mailed you to. Since it’s an NFT it can be confirmed to be authentic of both the holder and the item itself.

Duplicates Exploiting

As a gamer, I don’t think there has ever been a single MMO I’ve played where at some point items were not duplicated in some manner. Nothing worse than buying an item off the marketplace that ends up vanishing when you log out or rollback. Often leaving you without the in-game money you spent and the item.

It’s crazy to think even in modern games they still have issues with players duplicating items. Even worse when it goes undetected for months on end or they simply just don’t care to do anything about it.

With NFTs, every single one can be verified on a public ledger that they are unique and someone did not duplicate 10k copies of the same one in some way. Since it's also public that means it’s not having a single point of failure for it to be discovered about either. Players, exchanges, the game developer themselves, and who knows what else could discover something wrong is going on. Asset auditing is going to be a big deal.

On top of that marketplaces can script into their systems safeguards to double-check that item X 11132 does not have 10k copies on the blockchain. Any reasonable external market would have an auto blacklist feature in place looking to catch that. Along with dealing with stolen items that now have a history forever on a blockchain.

Increased Security

Imagen for a moment someone found an exploit to log into other people’s gaming account in a game. Ina normal game they could just steal whatever items they wanted off that account. In this day and age, it’s not uncommon stuff like that happens all the time.

Let’s face it. Far too many popular games, apps, and even websites can have accounts hacked if the token/cookie that is used for keeping the user signed in gets stolen in some way. While I won’t go into the methods that could be used it’s quite an alarming issue.

Many blockchain games still utilizer the old-school method of having a user name and password. That could simply be breached if they use the same username and password for a bunch of accounts and one of them became compromised. There are even ways to bypass two-factor authentication.

When it comes to the NFTs on those accounts they should either be already in the user’s blockchain wallet or linked to the user's wallet in a way doing anything such as selling or transferring the NFT requires the wallet that account is linked to granting authority for that action.

Let’s face it game developers are not known for being the most security-minded. NFTs help migrate the risk of thief away from the game developer and onto the wallet and blockchain itself. Where if wallets can not withstand reasonability security there are bigger issues than an NFT in a game being stolen at stake for that blockchain and wallet.

There has also been a much bigger issue over the years than just that. Disgruntled employees wiping out players' inventory, gifting items to their friends. Heck, I was once a server admin and I caught GMs contacting players and trading them items in exchange for money.

Without public blockchain data, we never got to see the GM receiving the money for their acts. We just could see the internal data server-side of the item spawning, and chat logs between the parties in-game. Which ended being disclosed to the public when that GM cried wolf and claimed they were let go for no reason. Just imagine if they were not so stupid to use in-game communication to broker the deal and instead the player made a fake ticket about the items going missing that they never had in the first place. This is not a thing once an item is minted onto a blockchain and can be verified no matter what happens to in-game data. With it being out in the open of what happened and when for all to see.

This part I feel still has a long way to go on both the blockchain and game developer sides. Sadly players don’t always read every single transaction they sign. Not to mention contracts on blockchain like ETH can be complicated and the end-user and game developers do not always do the due diligence or fully understands what is going to happen.

Real Money Trading Aka RMT

It used to be back in the day you could buy a physical game and once you were done playing it you could sell it or trade it back in for a portion of what you spent to go towards a different game. Between silly DRM (Digital Rights Management), most things now being digital, and the mentality that you will own nothing and you are supposed to be happy about it. NFTs can bring ownership back into the hands of the player.

Something that I’ve always been in favor of is once someone is done playing with a game they should have some ability and even the right to sell off or give away whatever they want in terms of assets or even the game itself. Outside of a few expectations and a single genre in gaming the gaming industry has failed miserably to innovate in the freedoms of the player. They have instead turned into an armored truck of no you don’t own that.

Game developers since the dawn of time have been fighting off RMT tooth and nail with limited degrees of success. Usually, game developers try and use scare tactics that you are going get your account hacked, your personal information stolen, and you will be banned. While that can be the case it’s a big enough industry now that players have found decent black markets to offload goods on.

One of the best ways of dealing with RMT in a game is the developer getting in on the action themselves. If people are going to do it you might as well have them do it in a way you approve and can profit off. That is just my take on it and I’m sure many will disagree.

We have seen games in the past try and work out some way of moving the sale of their games currency off black markets and into the game itself. You have games like World of Warcraft and Eve Online that allow players to buy game time and sell it for in-game currency to other players.

You even had a game like Diablo III try and take it one thing further by allowing players to trade items for money. They however had far too many restrictions on who could buy, amounts, and other issues that people didn’t want to play their way. Resulting in other sites getting the sale and it being shut down.

You have also had Real Cash Economy games like Entropia Universe that have a fixed rate in and out of the game. Since they were dealing with fiat money they struggle with banking regulations, payment processors dropping them, and fraud.

NFTs takes thing to the next step. The item could be sold on an internal market in the game with the game developer taking a cut or imposing other restrictions. That however comes with some added risks and even regulations the developer would have to navigate.

Since NFTs are on a blockchain and many different markets could have a place for an item to be sold. The game developer could simply not stand in the way and the free market will free market. Bad and scam exchanges will fail over time and the safer and more secure ones will succeed.

In the end, this takes some risk away from the player looking to RMT. Everything is public on a blockchain. This means if money laundering or fraud is taking place it can get tracked back to all accounts involved. If anything this sounds like the dumbest way to be doing anything illegal as a record of it will be there forever for someone one day to do something about it.

Final Thoughts

While some will argue that games could already do everything mentioned in some form or another that has been talked about in this post before NFTs and blockchain. You are forgetting that most modern-day games are not and have not for some time. They lacked a unifying protocol to unlock the flood gates. Instead of freedom, they have brought DRM tyranny and the notion that what you bought is not yours. The items were not Non-Fungible tokens on a blockchain. It’s time for a new kind of innovating in favor of freeing the player instead of bogging them down even further in red tap and limitations.

As massive trillion dollars companies start using blockchain and NFTs to solve global issues like data storage, tracking, logistics, chain of custody, fraud, and other things. There is no doubt some of it will make it back to the gaming industry and vise versa. While there will be scams, money grabs, and shenanigans along the way that is not enough of a reason to dismiss an entire emerging market. Even with all my experience and understanding I only see a fracture of what NFTs could mean to the gaming industry and ultimately empowering the player.

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Written by @Enjar.