In the last blog post, we discussed three (3) examples of companies that are using fungible tokens & NFTs as financial assets like fiat backed stable coins, synthetic tokens and revenue generating resources. In this latest blog post, as the title suggests, we are going to be discussing 3 examples of companies that are using NFTs to represent in-game items. According to WePlay Holding (2021) “in-game items are purchasable weapons, armor, or cosmetic skins that players can buy to make their character stronger or improve a gaming experience. Video game producers consider them to be virtual goods”. We’ll be discussing NFTs as in game items using Axie Infinity, the Sand Box & Illuvium as examples.

Axie Infinity
Developed by Sky Mavis – a Vietnam-based game studio, Axie Infinity is a blockchain-based play-to-earn game built on the Ronin network, an Ethereum sidechain. Gamers buy, train, breed, and battle pets called Axies, available in the form of NFTs to earn in-game currency. Axie Infinity players can also sell their Axies on open marketplaces to earn real money.
Axie Infinity is one of the go-to references when discussing blockchain based gaming where playable characters are NFTs. But why make it an NFT & why are players interested? As discussed in previous blogs, Blockchain Technology & NFTs brought the idea of digital scarcity & digital ownership to the internet. This unlocked the innate human desire to “own” the things we invest time and money in – and within the gaming context, this is true of the characters they play with in digital environments.
 
The SandBox
The Sandbox is a blockchain-based play-to-earn 3D metaverse game built on the Ethereum network. The game is relatively popular and is endorsed by the likes of Nike and Adidas. Gamers can explore their virtual surroundings, visit different locations in the metaverse, purchase land in the form of NFTs and build structures and experiences to earn income.
The SandBox is one of the go-to references when discussing blockchain based gaming where “land” or virtual spaces are sold as NFTs. But the big questions are the same, why make it an NFT & why are players interested? The answers, just like the questions are no different than before. After committing time and money to a game, if there is an option to truly “own” their in-game items, then players will likely take it – and that’s what blockchain technology and NFTs enable.
Additionally, and perhaps this is key insight into the minds of some gamers – if you enjoy a game, there will be a desire to improve the gaming experience. One-way players can do just that, is if they “build up” their section of the metaverse to have the “look” or the desired functionalities that they believe their space should have. If this sounds like the rent & homeownership experience in-real-life, then you are starting to see and understand the psychological patterns. Wouldn’t you like to improve the space you live in to make it yours? And if you’re going to commit a lot of resources to improving the space, wouldn’t you rather own it? It’s no different for a lot of gamers.

Illuvium
Illuvium is an upcoming role-playing game where users can earn through gameplay. It uses Immutable X, the layer 2 scaling solution for NFTs on Ethereum, which provides gas-free transactions. Players can capture NFT creatures called Illuvials, which become more powerful as they win battles. They can also customise art pieces based on their in-game characters. Lastly, as is the common theme with blockchain based games, players can sell and trade their Illuvials and tokens earned on NFT marketplaces and decentralised exchanges.
Illuvium is a good example of “skin-like” assets as NFTs. Skins are a great way for players to show their individuality, dedication to the game and feel unique and proud of their characters. They are also a fun way to commemorate certain events & stages in a player’s gaming career. And just like with the other two examples, if given the opportunity to “own” these items – players are likely to take up that option.

So you see, in game items are a legitimate use case for NFTs that is active, as at today. Gamers have proven that they’re willing to spend hundreds, if not thousands, on these virtual goods. And we believe that in time, this trend will only grow, as the notion of “ownership” is something that is common to the human experience, that is now possible on the internet. In the next blog, we will discuss examples of how Yaad Labs will be taking advantage of this new paradigm for its studio made products.