Can NFT holders earn income during the holding period rather than at the time of sale? Can Web3 co-creation be applied to game NFTs?
Written by: DawnXue
NFTs were undoubtedly the focus of the last cycle. Whether in crypto art, sports collectibles, or in-game assets, NFT success has left its mark. However, after the glory of PFP projects like CryptoPunks and BAYC, NFTs ultimately concluded with the speculation of virtual land in the metaverse. Nowadays, these once-hot assets are gradually being forgotten.
The price bubble of the NFT market and the limitations of use value
Based on historical data from Opensea, blue-chip NFTs like BAYC and Doodles have fallen over 90% from their peak prices. This phenomenon is not only lamentable but also prompts us to reflect on the root issues of the NFT market:
Price bubble burst. In the last market surge, NFT prices were significantly inflated. However, as market enthusiasm declined, the excessively high prices led to a sharp decrease in buyers, and trading volume plummeted. Similar to other speculative markets, NFTs experienced price surges and rapid corrections, lacking subsequent narratives or value support, which caused investor confidence to collapse.
Limited use value. Many NFTs have overly singular functions, existing only as speculative tools, with very few NFTs possessing long-term use value. For example, PFP (profile picture) NFTs lack more practical uses beyond representing users' social identities; while collectible NFTs have aesthetic value, their appeal and liquidity are difficult to sustain.
Co-creation and revenue sharing of NFTs
The core of Web3 is co-creation and revenue sharing. Looking back, the issuance and revenue of most NFTs were mainly concentrated in the hands of individual creators or platforms:
PFP NFTs: such as Punks and BAYC, their profits are exclusively enjoyed by the project party.
Sports collectibles: NFTs represent specific sports moments, with issuance and circulation rights controlled by the platform.
Virtual land: such as Decentraland and The Sandbox, these platforms hold the dominant rights to land issuance.
Although there have been some cases of user-customized assets in the metaverse, overall, the market has not truly achieved deep co-creation between players and platforms.
Exclusivity and non-exclusivity of use: new ideas for NFT usage
Currently, most NFT usage methods are exclusive: only holders can use or authorize others to use them separately. This model limits the popularity of NFTs and weakens their income-generating ability. The exclusivity of NFT use is similar to the early stage of computer development, which mainly revolved around hardware like chips; you can buy, sell, and rent (NFTs already have relevant technical support), but it is not suitable for large-scale dissemination.
In contrast, non-exclusive use is more open. The same NFT resource can be licensed for use by multiple parties, generating broader value. For example, the Little Ghost NFT can launch co-branded products through brand authorization, allowing multiple consumers to purchase and pay premiums for the products simultaneously, thus bestowing broader market value to the NFT.
What other more valuable assets can this NFT container hold? When these valuable NFTs are authorized for simultaneous use by multiple people, can NFT holders earn income during the holding period rather than at the time of sale? Can Web3 co-creation be applied to NFTs? Can forgotten, illiquid NFTs in wallets be awakened?
NFT games could be a breakthrough. NFTs are powerful containers that can hold not only in-game assets but also the game itself.
NFT games
Why start with games? The gaming industry often leads new technologies, whether it’s the emergence of computers (text adventure games, graphical interface games), the development of PCs (mouse and keyboard games, multiplayer online games), or the popularization of button phones (Snake and other button games) and smartphones (Angry Birds with touchscreen operation, Temple Run with tilt and movement); gaming has played a key role in these processes, leading innovations in user experience and interaction methods.
And it needs to start with small games. Because the development cost of small games is low, and they can iterate quickly; small games are easy to get started with and have simple gameplay, making them more suitable for a wide user base and having strong dissemination.
The high barriers to entry in game development
Although the development cost of small games is low, most players, except for programmers, do not have coding skills, making it nearly impossible for these players to independently develop even seemingly simple small games, let alone the creativity involved. However, platforms can collaborate with players for co-creation and share profits; the platform has technical development capabilities, and players have various NFTs and other resources.
Co-creation of games
Not all games are suitable for co-creation; some games are very suitable, such as puzzle games. Because the images are different, it results in a different game.
The co-creation idea exemplified by puzzle games:
The platform develops the basic logic of the game and opens up the functionality for NFT image uploads.
Players can upload NFT images from their wallets, and the platform generates a customized puzzle game.
Each puzzle game can be minted as an NFT, and game players enter the game through a ticket mechanism, with revenue proportionally distributed between image providers and the platform.
This model realizes the division of labor and collaboration between developers and users while avoiding redundant development. Players using their own NFTs can prevent piracy and enhance the combinability and utility value of NFTs.
The following is a comparison using puzzle games as an example, comparing physical puzzles, web2 puzzles, and blockchain puzzles, showing the advantages of blockchain puzzles.
Awakening dormant NFTs
Certain long-dormant NFTs may be revitalized by a successful game, while new NFTs can also spread widely among users through the co-creation model. Through this gameplay, NFTs are no longer merely collectibles or speculative tools, but assets with practical value.
The financiality and revenue model of NFT games
Financiality is one of the core features of blockchain games. NFT games not only bring entertainment value but can also form a sustainable revenue distribution mechanism:
Initial capital and reward mechanism
Users pay initial capital when creating games to attract players. Players participate in the game through a ticket fee and rewards are distributed based on the leaderboard.
Revenue distribution
The revenue from games after NFT issuance can be proportionally distributed to the platform and content contributors, and holders can also obtain dynamic income through usage rights during the game, rather than just relying on the premium at the time of NFT sale.
In addition to the above, conditional project parties can also stack points, airdrops, etc., to increase the financial aspect of the game.
The broad applicability of the co-creation model of game NFTs
In addition to puzzles, the co-creation model of games is also applicable to other games, which should have the following characteristics:
Simple modifications can generate diversity: the basic rules remain unchanged, but users can upload images or modify maps to create unique experiences.
Lower development costs: no complex logic is needed; image replacement and parameter adjustments can complete most game content.
Easy to share and disseminate: each player's created version may attract specific interest circles.
In addition to these games, this model can even be extended to other types of assets.
Of course, NFTs and games complement each other, and games may also progress with the wind of NFTs. In short, NFTs have not been discredited; we may only have seen the tip of the iceberg of this new territory, and more needs builders to explore.
