NFT enables gamers to have digital property rights
Every day we hear more engagement from big industry players (e.g. Epic Games and Roblox) as we approach the Metaverse, a continuously shared virtual environment with digitally connected experiences. The point is, none of this matters until internet users can actually own digital assets. And it all starts with playing the game.
Video games make us feel like we can do anything. These virtual worlds with limitless potential allow us to transcend the reality of everyday life and become heroes. They make us feel that our fate is in our own hands.
Games and players
Good Life Simulation Game: Players receive rewards for collecting values, advancing ranks, and gaining status. These goals are a top priority for gamers, and each week, gamers spend an average of around 30 hours playing games, interacting on game forums, and participating in game streams. They also spend a lot of money on in-app purchases like weapons and armor to improve their gameplay or just to look cool. You can even pay to speed up your progress and level up faster.
It could be argued that it is wrong to be “successful” in these games. As a species, we spend a lot of time in simulated environments, indulging in our nature and economic potential. The traditional video game is one of the most controlled, constrained, and secluded worlds imaginable: beautiful walled gardens for gamers to play in – and only there. Any sense of freedom or possession a gamer feels is an illusion, as publishers and gaming platforms actually control your game and your Metaverse experience.
Valued at more than $ 170 billion and growing, the global games industry is valued more than movies and music combined. Game publishers who feel they have to strictly control games to protect their winnings are at risk.
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Game against real world: conflict
One example is currently taking place in Chinese courts. Tencent, the world’s largest video game publisher, is suing DD373.com for $ 6.2 million for allowing Dungeon Fighter Online players to trade virtual currency and other game items on the site.
In court, Tencent stressed its terms and conditions, stating that all virtual items purchased by players have no real value and will forever remain the property of Tencent. Even the game’s virtual currency, which players buy from the platform in exchange for other in-game items, is a “service charge,” according to Tencent they never actually owned those assets.
This is not an isolated incident. Almost every game publisher takes the same approach.
Currently, most traditional games only allow the player a limited, predetermined number of economic activities. Players are required to use the in-game trading system and can only trade certain in-game currencies such as coins, credits, gold and gems. Therefore, in-game content is only valid in the original game.
Because games and content are made available to users on a license basis, it means they are not owned by players – they are hired. And that rental is best of all: players can put years of effort into a single game and spend tens of thousands of dollars amassing assets, but everything can be erased instantly with no need.
This often happens in the game world. Delisted Games is a website that tracks dead games. A recent example of a game facing a premature death is the China-exclusive Call of Duty release, slated to complete in August and has accepted payment for past purchases through the end of June.
The unintended consequences can leave players speechless, such as the case when Ubisoft shut down servers that Might & Magic X: Legacy players have been blocking from their useful purchased content since early June.
Catastrophic outages can occur, such as a fire or flood in a critical data center that wipes out progress, accounts, or even the world. In March, survival game Rust players lost days of progress when the game’s servers literally caught fire. While the problem could be a lot worse, in a game that is played in real time, it is still pretty severe whether or not you can log in.
Finally, changed regulations and license agreements can also disqualify a player from the game. For example, a European Star Trek Online player may not be able to access the game due to licensing restrictions when moving to Hong Kong. It seems absurd to block access to and participation in area-based online games, especially given the limitless and comprehensive nature of games and virtual worlds.
In principle, the games industry takes a very protective and restrictive approach.
Digital ownership in the game
These different cases illustrate the lack of fair digital ownership in the game. So far, players haven’t given any thought to digital rights, but thanks to the growing number of blockchain games, there will soon be a revolution where players will begin to claim the rights to their property.
We already have the means for the rights to digital assets in the game: Inedible Tokens (NFTs) as assets in the game. Made possible by blockchains, NFTs are unique, indivisible tokens that give owners property rights and enable digital assets to have real value regardless of platform. The platform can be a game, publisher, mobile app store, or other proprietary server, but gaming is probably the best place to start as the 2.7 billion gamers out there already understand the concept of virtual goods.
Digital ownership of a blockchain is supported by open, permissionless protocols and guaranteed by the consensus of the community. This allows NFT game assets to be traded between owners in a way that is inconceivable in most traditional games.
This is great for gamers, but many traditional game publishers fear that this new move will negatively affect their bottom line.
NFT is a game changer
An example of a tokenized game is F1 Delta Time, a Formula 1 licensed blockchain game from Animoca Brands. All content present in this game can be owned by the player. Cars, parts, tires, and even the drivers and tracks you ride are NFTs that can be used in-game or traded on third-party marketplaces at the discretion of the owner. As a result, some F1 Delta Time players have reported making thousands of dollars a month.
NFT also enables cross-platform interoperability and functionality, which means that the digital assets themselves become the centerpiece of the gaming experience – essentially the content becomes the platform. Just as you can own a single set of parts that can be played on many different boards, eventually you will be able to own NFT add-ons that can be used in different games or access different virtual worlds. The metaverse is getting closer.
The more game content is encrypted to empower players and enable digital ownership, the more optimistic I am about the future of the game industry.
Put simply, the world is moving towards a more equitable and decentralized global internet. This is underpinned by blockchain technology as a transparent and immutable infrastructure for accountability and powered by a model that rewards communities that bring, build and maintain their value. The new digital economy will bring the flow of money and power back into balance, reduce the influence of intermediaries on the virtual world and ultimately free us from decades of constraints.
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History is full of examples of societies’ transition from autocratic systems to (more) democratic systems, but this may be the first time this has happened on such a large scale.
Yat Siu, President and Co-Founder of Animoca Brands, leads various NFT projects including F1 DeltaTime, The Sandbox, MotoGP Ignition, and the REVV token and ecosystem. Yat’s vision is to monetize 2.7 billion gamers and beyond, digital ownership and gaming. He campaigns for various NGOs, is a member of BAFTA and is on the board of the Asian Youth Orchestra.