Will NFTs appear in video games soon?

In 1996, when the Nintendo 64 was first released in the United States, it sold 1.6 million units (worth $200 each) in the first quarter. Its closest competitor for the holiday season was the $30 Tickle Me Elmo doll, which sold about 1 million in the same window. More than 20 years later, when the $300 Nintendo Switch sold 1.5 million units in its first week of release, competition was even more intense, and not just during the holiday season.

The gaming business has changed dramatically since its early days. From basic monetization through the sale of physical games and digital game copies, to in-game monetization through microtransactions, the widespread adoption of the Internet has transformed the gaming landscape significantly. In the last century, video game studios made most of their revenue from the sale of games and gaming hardware, and today's gaming giants simply don't expect you to buy their games.

game business
Nintendo is a rare example of a large game studio that hasn't explored the microtransactions space in depth. Fortnite brings in about $5 billion a year to Epic Games, and based on numbers like these, you can bet that most game companies are at least working on a free-to-play model. However, the shift in consumer mindset from extreme aversion to microtransactions to moderate acceptance has been a long and arduous process.

Fortnite was far from the first game to introduce microtransactions, but it was one of the first mainstream examples of live-service games that relied entirely on in-game purchases. At the time, the concept of microtransactions was reminiscent of a toxic loot box economy and luck-based purchases, which turned games into a "pay-to-win" ecosystem, and consumers grew increasingly frustrated with game publishers.

Fortnite flips that paradigm on its head, using microtransactions as a way to differentiate itself in the game while also supporting developers. They don't affect gameplay, prevent the richer from dominating the game, and are an excellent way for those with money and taste to showcase it - a vanity-driven charity. Sound familiar?

Will it be combined?
Non-fungible tokens (NFTs) are bound to find their way into the gaming ecosystem. From the early days of CryptoKitties to today's aAxie Infinity, digitally held tokens seem destined to be integrated into gaming.

It should come as no surprise that some of the biggest names in the video game industry are embracing NFTs. Gaming has never been more accessible than it is today, growing from a niche consumer base to establishing global pop culture trends. Gaming collectibles have sold for staggering prices for decades - why should their digital cousins be any different?

From Ubisoft to Square Enix, what really appealed to the industry was figuring out the best way to do it. Some companies are starting to sell digital products as NFTs, allowing buyers to resell to other, more ardent enthusiasts. Others are experimenting with the P2E model used by Axie Infinity.

Earlier this year, American video game retailer GameStop announced plans to partner with an Australian crypto firm to develop a $100 million fund for NFT creators, content and technology. Square Enix president Yosuke Matsuda said in his New Year's letter that the company hopes to incorporate blockchain/NFTs into its future releases, but he didn't mention any details.

Recently, Ubisoft attempted to release a limited-edition series of NFTs related to the Ghost Recon Breakpoint game. In a perfect world, this would have been a moment of celebration - one of the world's largest and most valuable gaming giants announced the adoption of blockchain technology. As you probably already know, this announcement didn't quite go according to plan.