Magic Eden CEO Jack Lu spoke on Decrypt’s podcast gm about the “paradigm shifting” that he sees as NFTs in gaming. Many crypto advocates believe video games are one of the most clear use cases for NFTs . These tokenized, interoperable assets allow players to resell and possibly profit from digital assets.
As they have explored the NFT industry, vocal fans from the traditional gaming sector have been critical of companies such as Ubisoft or Team17. Many view the industry as a hub for speculation and scams. The negative environmental effects of NFTs is a frequent complaint, but this argument is dead after the recent Ethereum merger.
Some believe that NFTs will be used by game publishers as a way to extract more value from their players. NFTs are similar to the backlash against downloadable add-ons and free-to-play games when they were first introduced. Both of these business models are now industry standards.
There is a slight issue, many gamers hate NFTs
NFT marketplace Magic Eden sees long-term value in gaming NFTs despite all the controversy. Magic Eden was launched in June and was valued at $1.6 billion. It is now the largest marketplace for Solana nfts, and has recently expanded to the Ethereum market.
The most recent episode of Decrypt’s podcast featured Magic Eden CEO Jack Lu, telling co-hosts Daniel Roberts, and Stephen Graves, that NFTs are “unlocking something completely new” for developers to create an economy and a new business model.
Magic Eden supports a variety of NFT-based gaming projects via its launchpad feature as well as secondary marketplace. This includes upcoming titles such SkateX and Mini Royale, Nations and BR1 Battle Royale.
The firm created a gaming-focused venture capital arm in July with the goal of helping game developers find Magic Eden. The marketplace offers simple integrations that allow developers to embed the Magic Eden platform into their games. This allows users to buy and sell NFTs within their games.
Lu acknowledged that gamers have a lot to learn about NFTs. This includes the existence of bad actors and the growing financialization of digital assets. It’s not surprising that NFT-powered games are still in their infancy, and many of them have been simple, and falling short of players’ expectations.
For example, the Ethereum-based Axie infinity is the most successful story in the space, with more than $4 billion in NFT trading volume and millions of players at its peak last fiscal year. The game’s repetitive gameplay was also criticized. In spite of the increasing hype, the play to earn economy crashed. The game’s Ethereum bridge was also hacked to steal more than $600 million of crypto.
We could be seeing richer NFT-powered experiences as more game developers get into the Web3 space. However, it might take some time. It can take many years to create large-scale videogames. They are also supported by large development teams.
Lu stated that his team is waiting for “a few diamonds” to emerge, which is great games that demonstrate NFT functionality, in order to spread NFT adoption.
He explained that “great games take a long while to build” and that it takes vision, inspiration, as well as a lot dev time to create such a large amount of content. “We wait for the most promising studios to have the time to build their content and then figure out how to use NFTs in those.”
Lu suggested that, once a few “diamonds” hit the market and succeed, they will serve as a case study to help other developers get into the NFT space. It could be a “tidal surge that follows the paradigm shifts in the gaming industry, such as the move to free-to play games.