What Are NFT Games And How Do They Work? Important Guide

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Introduction

Discuss What Are NFT games? From their beginnings with the CryptoKitties craze, NFT games have developed and begun to offer play-to-earn models. Game-Fi, as it’s become known, mixes the worlds of finance and gaming, providing players opportunities to earn income as they play. You no longer need to only rely on winning, finding, or breeding a scarce collectible worth thousands of dollars. Players can now choose to experiment with multiple gaming models in various themes aside from collectible animals.

How Do NFT Games Function?

NFT games are different from just holding crypto-collectibles in your wallet. An NFT game will use NFTs in its rules, mechanisms, and player interactions. For example, a game could represent your unique character or avatar as an NFT.

Digital items you find while playing the game could also be NFTs. You can then swap or trade your NFTs with other players for profit. A newer, play-to-earn model also allows you to generate income from NFT games which we’ll discuss more later. So how do you take NFTs and technically implement them into a game environment? To swap, create, and implement NFTs within a game, developers create smart contracts that make up the rules for the NFTs used. Smart contracts are self-executing pieces of code stored on a blockchain.

CryptoKitties, for example, has a small number of main contracts that structure the game. The most famous is their gene science contract that determines the random mechanics that generate new cats. The game developers initially kept its code secret. Interested players even created tools to analyze the odds of particular traits in cats turning up. With this information, players could optimize their chances of developing a rare breed worth more money.

What Are NFT Play-to-Earn Games?

Play-to-earn NFT games give users the chance to generate an income stream through playing. Typically, a player is rewarded with tokens and occasionally NFTs, earning more the longer they play. The tokens earned are often needed as part of the game’s crafting process.

NFT Play-To-Earn Games

The token method is usually the more stable of the two, as tokens can be earned steadily through play while NFT drops are more chance-based. Play-to-earn has been especially popular with users in low-income countries as an alternative or boost to fixed income or social security.

Axie Infinity has become one of the most well-known play-to-earn games. The game requires an initial investment to purchase three Axis, or you can receive a free Scholarship from another player. Once you have a Starter Team and begin completing tasks and challenges, you can earn Smooth Love Potion (SLP), an ERC-20 token tradeable on exchanges.

Breeders use SLP to breed new Axis, creating an economy for the item. Axie Infinity became particularly popular in the Philippines, where many users started to live off its play-to-earn model. Many players are making between $200 to $1000 (USD) per month, and some even more than that depending on the market price and time invested.

What Exactly Are In-Game NFTs?

In-game NFTs offer another way for you to generate an income through playing NFT games. Rather than earning a fungible ERC-20 token like SLP in Axie Infinity or SKILLS in CryptoBlades, you earn NFTs that represent collectible items. This gameplay mechanism is the traditional way of generating income with NFT games. Items will vary in their worth based on their cosmetics, rarity, or utility based in the game.

CryptoKitties is one example of a game that relies only on the collectibility of in-game NFTs. There is no way to keep playing and earn a steady income without the element of chance. Most newer NFT games offer a mixture of both play-to-earn and in-game NFTs. 

What Is The Revenue Model For NFT Games?

The amount of money you can earn playing an NFT game will depend on the specific game’s mechanics and market demand. The money you make will come from other users who value the NFTs or cryptocurrencies earned in the game. 

You will need to cash out by selling your goods on a market, exchange, or auction house. With NFT games, value is derived either from the NFT or token’s collectability or in-game utility. These two factors also lead to speculation.

Can I Lose Money If I Play NFT Games?

It’s possible to lose money playing NFT games. The exact amount depends on the type of game you’re playing, its mechanics, and the value of the NFTs you’re handling. 

Losing money doesn’t necessarily mean you’re being scammed. As NFTs are speculative and their value depends on what people place on them, your losses also depend on market forces. Like any crypto investment, only spend what you can afford to lose.

There’s a wide range of NFT games available, with the majority on BSC and Ethereum. Some offer more traditional video game experiences, and others depend mainly on the collectibility of NFTs. 

Axie Infinity

As we mentioned before, Axie Infinity follows a model similar to Pokemon with collectible creatures and battles. Axie Infinity is on the Ethereum blockchain and provides users a potential income based on trading Small Love Potions (SLP), Axis, and Axie Infinity Shards (AXS). SLP and AXS are both available to trade on Binance.

So rare

Sorare

So rare is a fantasy football game with collectible, tradeable soccer players from real life. You create a five-player soccer team using either free cards for beginner players or purchasing tokenized cards. You can earn points to level up for every game you win, the goal you score, or other events you complete.

Gods Unchained

Gods Unchained

Gods Unchained is a tradeable NFT card game on Ethereum similar to Magic The Gathering or Hearthstone. Gamers build decks with different powers and strengths to combat other players. As you win, you find in-game items to use or sell. If you win Ranked games, you can begin to earn Flux which lets you craft powerful NFT cards. You can then take your profits by selling them or reinvest in new cards and continue the process.

NFT Collections On Binance

Binance NFT Marketplace provides an NFT gaming experience with NFT Mystery Boxes and Collection partnerships. These partnerships range from digital artists to NFT games.

Binance NFT

Every purchasable Mystery Box contains a random NFT of a different rarity from the Collection. You can either open the box to reveal the NFT or sell it without opening it.NFT Collections contain several NFTs and Mystery Boxes centered around a theme or project. Some of the most popular so far have been Game-fi Mystery Box Collections. Let’s take a look at a few:

1. The MOBOX Collection. MOBOX is a gaming platform on BSC combining Defi yield farming with NFTs. The Collection involves NFT Mystery boxes containing MOMO NFTs with randomized hashing power in the MOBOX platform. The more hashing power the NFT has, the more valuable the MOMO is in MOBOX’s games.

2. The My Neighbour Alice Collection. My Neighbour Alice is a virtual world-building game featuring NFT cosmetic items. While the game assets contained in the Collection’s Mystery Boxes are cosmetic only, users still value them and give them worth in the secondary market.

Closing Thoughts

NFT gaming takes digital collectibles and creates rules for players to interact with each other’s NFTs. While some people value NFTs for their collectibility, others want them for their utility. Many NFT games work like a trading card game, but not everyone who collects the cards intends to play. Game-fi has now created new NFT gaming economies that have changed how people can earn using NFTs. To make money, it’s not just about luck and collecting anymore; it’s also about playing too.

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