Even before the advent of NFTs, paying “real” money for in-game items was controversial with gamers. And according to the latest 2023 GDC report, only 23% of developers are using paid in-game items as part of their current projects. But with valuable revenue available for studios that provide desirable in-game assets, let’s take a closer look at how developers can get this business model right.
In 2006, to much fanfare (and ridicule) US$2 horse armor was introduced as paid downloadable content (DLC) to The Elder Scrolls 4: Oblivion. Though initially met with skepticism, this was the beginning of a fundamental shift in the games industry and its business models, opening the floodgates for in-game assets and downloadable content.
This has since become a staple of some of the biggest gaming titles. For example, for free games like League of Legends and Fortnite, most of their revenue is made through microtransactions, and the global online microtransaction market is currently estimated to be worth approximately US$67.28 billion.
In 2012, Blizzard launched its smash hit title Diablo 3 alongside a “real money” auction house, which allowed players to trade, bid for and buy items other players had looted in the game. It was not well received and was eventually replaced, with the real money auction touted by many as the reason the game “failed.”
In 2022, Blizzard again faced criticism for the mobile version of Diablo – Diablo Immortal, which launched as a free-to-play title but encouraged players to spend money to upgrade their in-game hero, with some reporting it could cost US$300,000 or more to fully upgrade their character.
This criticism was often leveled at the idea that paying for downloadable upgrades and extras defeated the object of the game. But what if, instead of merely paying for extras to get ahead, downloadable content was the basis of an in-game marketplace that added to, rather than distracted from, the complex worlds that players occupy in such games? Often these assets die with the games they were purchased or won in. This means users can put hundreds of hours of time into building assets up within a game, or spend real money to get ahead with bonus resources and items, only to have them lost or digitally forgotten when it’s time for a new game or a sequel, or if the gaming studio shuts down with all the in-game assets stored on centralized servers.
Rather than accepting this as an inconvenience, we are now seeing technology evolve to give players complete ownership of their in-game assets. By using new innovations like blockchain, developers and studios can facilitate true gamer ownership of in-game items. For example, say a player had won or purchased a weapon skin. This skin could be sold as an NFT, or non-fungible token, on the blockchain. NFTs are a type of blockchain token that is not interchangeable with another — making them ideal for in-game assets as the rightful owner can irrefutably prove ownership. This means that if there is a breach or a hack, or even if the gaming platform decides to try and take that weapon skin away, they will be unsuccessful.