Analysis of the definition of NFT games and their development history

NFT games are a new form of games based on blockchain technology. It uses non-fungible tokens (NFTs) to represent virtual assets in the game, making these assets unique and tradable. The development of NFT games can be traced back to CryptoKitties in 2017, which is a game with the core gameplay of collecting and breeding cute digital cats. Subsequently, more and more NFT games have been launched, such as Axie Infinity, Decentraland, etc. These games not only provide a unique virtual world experience, but also provide players with opportunities to create, trade and invest. With the further development of blockchain technology, NFT games are expected to become an important part of the future gaming industry.

What does NFT game mean?

NFT games are real assets owned by players and are also important props in the game. NFT stands for non-fungible token, which can carry unique information. This information can include properties and pictures of game props, or even the content of the entire game. Therefore, whether it is a game installation package downloaded from Steam, a game disc from a PS console, or a game cartridge from an NS console, it can be carried and displayed through NFT. This allows players to truly own and control their own game assets, which no one can take away from them.

The development history of NFT games:

First generation (2017-2019)

The first generation of NFT games are mainly based on digital collectibles, many of which are inspired by traditional Online collectible card games like Hearthstone.

#Some developers are worried that the application of blockchain technology is not meaningful enough, and there are also many public misunderstandings about cryptocurrencies. However, CryptoKitties is the first game built on Ethereum, and its team is trying to solve the problem of missing functions faced by the sustainable development of digital collectibles through games.

Since games are generally free, developers make money by taking a small percentage of all blockchain transactions in the game. Early NFT games tended to have an idle/passive gaming experience, relying on time-based actions to collect resources over time. For example, the CryptoKitties game revolves around collectible gameplay, where unique cats with different characteristics are “bred” based on the combination of two CryptoKitties “parents.” Gameplay is also primarily 2D in nature, with basic graphics and animations, with many inspired by classic games such as Pokemon and Neopets. The first generation of games also includes EOS Knights (an idle RPG game built on the EOS platform with the main goal of saving villagers from orcs), EtherGoo (a competitive idle game built on Ethereum where users aim to accumulate as much money as possible) "goo"), Etheremon (a version of CryptoKitties inspired by Pokemon, built on Ethereum), etc.

However, the first generation of games had some shortcomings in terms of long-term player engagement, and the decline of CryptoKitties is one example. These games lack a proper in-game economy, where players must spend money to play against others, and there are concerns about digital scarcity. These issues have led to the evolution of these games towards a pay-to-win model.

Second Generation (2019 to present)

The current generation of NFT games belongs to the second generation, focusing on the digital economy in the game, especially in the "from playing to making money" ( With the help of Play-to-Earn, P2E), improve long-term player participation. The P2E model allows players to earn income through in-game tokens or rewards. These tokens or rewards can be spent in-game, traded on public exchanges, or even redeemed for the player’s local fiat currency. This innovative economic model creates more opportunities for players to have fun in the game while also receiving financial rewards.

The pioneer of the second generation P2E mode is Axie Infinity. This is a Pokemon-inspired NFT game where players fight, collect, raise and build a land kingdom for their digital pets (called Axies) in an open universe.

The game is currently the No. 1 game on Ethereum, with approximately 58,000 daily active users (more than 10x growth since October 2020) and cumulative revenue of more than 7,000 ETH since its inception.

Axie Infinity is popular because there are a variety of carefully designed ways for players to earn income, including: through daily missions, PvP and PvE games, earning SLP, utility tokens needed to breed new Axies coins), which can then be traded or cashed out; earn Axie Infinity Shards (AXS) governance tokens through in-game rewards; breed and trade individual Axies for profit; accumulate resources (and potential capital appreciation) by owning in-game land; and ultimately Earn what you can earn on staked AXS tokens from in-game fees via the community treasury; all of these earnings can be traded on public exchanges like Uniswap, OpenSea, or redeemed for fiat currencies like Binance P2P SLP/PHP pair).

The innovative “game to make money” ecosystem incentivizes players, expands the addressable market for NFT games, and brings more players into the cryptocurrency ecosystem (who would otherwise will not be interested in cryptocurrencies), and drives up engagement levels as gaming essentially becomes a part of one’s life.

Other second-generation games include Gods Unchained (the first NFT online trading card game, where players can earn a pack of digital cards that can be sold for ETH), AlienWorlds (a browser-based simulation game where players mine and competitive in-game resources Trilium), as well as various sandbox platforms such as Decentraland and The Sandbox.

Although the current second generation of NFT games perform better in terms of playability and gaming experience, with their open universe allowing for land gameplay, higher quality graphics and player-generated content, It still lacks the sophistication of traditional AAA games in terms of user experience, game design, and graphics.

Third Generation (Upcoming)

The upcoming third generation NFT games are expected to have a more refined gaming experience, the advantage of using the game to make money, combined with better game design/graphics , reaching the level of a low-budget AAA game.

If making money is the driving force behind the current popularity of NFT games, then the upcoming third generation of games will start to enter the larger mainstream gaming community as production values ​​become more and more consistent with traditional AAA games (plus The financial incentives brought by making money from games).

This is where we may see rapid growth in the S-curve of NFT game adoption, and potentially the last generation of NFT games that large game developers directly get involved in.

In fact, the investment in NFT itself is more similar to the investment in collectibles. Therefore, in terms of NFT investment, you need to have an in-depth understanding of the specific NFT market segments to make a good investment. It is especially suitable for enthusiasts. First, To enter early, the second is to participate in the market of games, digital art collections, domain names and other markets, and go deep into the market demand. Of course, in addition to NFT itself, projects carrying NFT are also an important part of NFT investment. Projects carrying NFT are relatively NFT itself has a better chance of capturing the value of the entire ecological development. Of course, this also depends on the economic mechanism design of its project tokens.

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