In 2020, the worldwide gaming industry was valued at $167.9 billion USD. The industry is projected to reach an overall valuation of $287 billion USD by the end of 2026. This represents an overall growth projection of 70% over a seven-year period. The popularity of gaming has grown significantly over the past 18 months, partially due to worldwide lockdowns that occurred as a result of the COVID-19 pandemic. Alongside the cryptocurrency industry, the gaming industry is one of the fastest-growing industries worldwide.
Since 2018, we have seen the emergence of many cryptocurrency gaming projects. For example, the Decentraland project, which aims to combine gaming, VR, and blockchain technology, was founded in 2017. In projects such as Decentraland, users can buy in-game NFTs.
In-game NFTs allow users to effectively purchase in-game content. This is not the same as DLC content/add-on packs. Rather, users can purchase content in the marketplace of the game in question, then use it in the game itself. They can also sell their purchases down the line if they wished to.
For example, if we use the Decentraland project as an example, users can purchase items from the Decentraland marketplace. Items include:
- In-game land
After buying something, users can then use what they purchased in-game and also arrange to sell it at a later date. For example, in the image below, we can see land available for sale in Decentraland (light blue).
Users can proceed to buy this land, then build and earn from it. When building, a user’s imagination is the limit. You will find all sorts of things in these in-game NFTs and across the metaverse, from in-game VR strip clubs to art museums.
Some in-game NFTs are typically serious (such as land sales), while others maintain the traditional cryptocurrency community vibe. For example, the picture below depicts a DOGE Head for sale on the Decentraland marketplace for a price of $69,696,969.
To many outside the cryptocurrency industry, this may seem like a relatively non-serious trend that will eventually disappear. However, this is far from the truth.
What projects like Decentraland have achieved is the creation of numerous secondary markets within the cryptocurrency world. Like traditional NFTs, there is a significant potential profit to be made in these in-game NFTs. Without further ado, let’s take a dive into these potentially lucrative, hot-property markets in the cryptocurrency space.
Why do people buy in-game assets?
The reason people buy in-game assets depends on the game itself. For example, if we take Star Atlas, a new-wave metaverse cryptocurrency built on Solana, users can purchase various in-game NFTs such as:
- Crew equipment
- Space Stations
- Power Plants
Purchasing these in-game NFTs provides significant benefits and opportunities within the game itself. This brings us to the first reason of why users purchase in-game NFTs.
1 – In-game benefits
Offering in-game benefits is one of the main value drivers of in-game NFTs. We have already seen the value of traditional NFTs. For example, the Solana DEX Orca had limited edition NFTs for sale recently. With these collectibles, users could earn additional APY from their ORCA cryptocurrency.
Returning to our example of Star Atlas, if users purchase the Noble Cloak available on the in-game NFT marketplace, users with the cloak will receive a health boost upon the release of Star Atlas.
These performance-boosting in-game NFTs, which are typically rarer than the conventional type of NFT, provide greater benefits for the user. Lots of users want to get their hands on the best in-game NFTs they can afford. The motivation behind this action is to give themselves an edge over fellow competitors. However, the rarer the in-game NFT, the lower the supply. Subsequently, a high demand for a low-supply item can cause the overall valuation of the in-game NFT to soar over time and users can potentially witness a significant increase in an NFT’s valuation.
2 – Profit potential
Traditional NFTs are often purchased in the hope of increased future valuation. In-game NFTs are no different in this respect. For example, this unique (1/1) Sandbox low rider transformer will set you back by a significant $16,000 USD.
3 – For fun
When evaluating the financial potential of in-game NFTs and the lucrative sales made across various marketplaces, it is easy to forget that the purpose of the platform is for it to be a game. Users may want to purchase in-game NFTs to advance through the game with increased speed or buy a cute digital pet for their gaming adventures.
For example, in the picture below is an Axie from Axie Infinity. Someone may wish to buy this to potentially breed from it, fight with it, or simply because they like the look of it.
4 – The new form of collecting
Naturally, humans are collectors. The need for collection stems from prehistoric foraging thousands of years ago. Humans collecting seemingly random objects is a natural instinct, since the collected objects are often ever-evolving and appreciate over time.
Thousands of years ago, humans collected shells, rocks, and metals. Today, the trading of pretty metals has evolved into the current monetary system. Humans then proceeded to collect these collectibles in various forms of jewelry, such as gold necklaces, gold earrings, and more. Others have taken to collecting stamps and coins. When you were a child, you may have collected Match Attacks or baseball trading cards.
Metaverse collectible items in the form of in-game NFTs are merely the evolution of the art of collecting. For example, nowadays, someone may want to buy the latest pair of Artwalks on Decentraland because they enjoy collecting blockchain sneakers online, rather than physical sneakers.
By collecting these shoes, new collectors get satisfaction and can view their sneakers online. If you get lucky and get your hands on a super rare in-game sneaker NFT, you will likely want to show them off to fellow collectors (in a similar fashion to showing your school friends the Ronaldo or Michael Jordan card you found).
What projects listed on AAX have in-game NFTs?
AAX lists multiple projects which have in-game NFTs. Currently, the following projects on AAX have in-game NFTs:
- Decentraland (MANA)
- Axie Infinity (AXS) & (SLP)
- The Sandbox (SAND)
Why do people purchase in-game NFTs?
Ultimately, there are numerous reasons why someone would want to buy in-game NFTs. However, one thing is clear: these in-game NFTs are exploding in popularity, and they are here to stay.