June 2022#NFT#MarketResearch

GameFi NFTs sales outperform the marketthanks to 8 new use cases

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Authors

Daria Khritonenkova

Daria Khritonenkova

NFT Analyst

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  • Game NFTs outpace regular AI-generated collections in terms of the number of sales in Q1 (4m sales vs. 2.7m)
  • The supply of new GameFi NFTs is growing slower than in 2021, indicating that users tend to resell the assets of the same popular projects;
  • NFTs have around 8 in-game applications, such as earning rewards for winning battles/quests, staking, fusing, and upgrading;
  • GameFi NFTs can have utility outside of a game – e.g. provide access to events or merchandise 

In Q1 2022, gaming NFTs have replaced regular AI-generated art collections as the NFT category with the most individual sales. The experts at BDC Consulting have analyzed this phenomenon and the varied new applications that NFT assets find within and outside GameFi platforms. 

In-game assets lead by the number of NFT sales, but the USD  sales volume lags

GameFi is having a momentous impact on the development of the NFT industry. In 2021, AI-generated collectibles like Bored Apes Yacht Club or Sappy Seals accounted for most buys on OpenSea and other marketplaces – but in 2022, they were replaced by in-game NFT assets.

The research team at BDC Consulting analyzed NFT sales data provided by  Non-Fungible.com. In Q1 2022, over 4 million gaming NFTs were sold, as opposed to 2.7 million regular collectibles. 

Source: Non-Fungible.com 

This is due to the high liquidity of in-game assets and a very large number of market participants: almost a million active wallets interact with gaming dApps, especially play-to-earn games. 

Source: Non-Fungible.com 

At the same time, the average price of a play-to-earn NFT is low compared to the price of popular generative art works – thus their overall all-time sales volume remains almost 10 times lower, too. 

Source: Non-Fungible.com 

Another interesting trend is the slowing down of the supply growth of new gaming NFTs. While the total number of GameFi NFTs in circulation is very high compared to the supply of artworks or metaverse NFTs, it has increased by just 5% last quarter – as opposed to a 22% increase in Q4 2021. 

Source: Non-Fungible.com 

This could mean that players tend to buy and resell NFTs from the same popular games, rather than shop for assets from new games. 

NFT use cases in games

The team of BDC Consulting proceeded to analyze how NFT assets are used in the top GameFi projects by the number of active wallets, according to DappRadar

Source: DappRadar Report

Based on the study of the game mechanics in Splinterlands, Alien Worlds, MOBOX: NFT Farmer, Bomb Crypto, Axie Infinity, and others, the experts found that gaming NFTs usually have very little to no value outside of their respective ecosystems – and that most gaming projects require that users purchase a set of NFT assets (characters, weapons, etc.) in order to start playing and earning tokens. 

Another common feature is that NFTs of a higher rarity rank yield better rewards, be it for completing quests, staking, etc. 

The most popular in-game use cases for NFTs are as follows:

  • Using NFT characters in battles or quests to earn in-game tokens;
  • Upgrading or leveling up NFT characters and equipment to make them stronger and more performant; this usually requires a payment in tokens;
  • Creating new NFTs within the game;
  • Staking NFTs to earn governance/utility tokens;
  • Fusing or breeding NFTs to get new ones, rarer and more valuable;
  • Burning NFTs to get utility tokens in return;
  • Buying, selling, lending, or borrowing NFTs on internal or external marketplaces;
  • Buying NFT packs or bundles with several items inside.

As for utility outside of a game, while rare, it comes in the following forms:

  • Collaborations with other GameFi projects (such as Splinterlands and Waka Flocka Flame);
  • NFTs can act as access tickets to an exclusive club of sorts. For instance, G2 Esports’ Samurai Army NFTs give access to AMA sessions, gaming nights, merchandise, tickets to eSports events, etc.
  • Also, an NFT can be used in several games launched by the same team or platform and on the same blockchain.  

GameFi NFTs: the 4 key trends

In the last part of the study, BDC Consulting analysts have summed up the ways in which NFTs add value to GameFi projects, giving them an advantage over traditional mobile and desktop gaming. 

  1. Flexibility. NFTs in games enhance existing gameplay and make it more flexible. The idea of earning money while playing isn’t new, but NFTs, being actual digital objects on the blockchain that exclusively belong to their owners, allow for new ways of earning rewards. For example, users can trade them on outside marketplaces or stake them.
  2. Increased control. In traditional gaming, in-game purchases are one-tie irreversible investments tied to a single app. But in GameFi, users have much more control over their investments thanks to the ownership rights over the NFTs. They can sell them, transfer them to other supported dApps, or even create and monetize new NFT.
  3. Interoperability. Game developers can make their dApps more attractive by collaborating with other projects, so that players can use their NFT characters in several ecosystems (an example is MOBOX: NFT Farmer).
  4. Rewards for owning NFTs. As noted above, an NFT can provide long-term value outside of any game – for example, as an entry ticket to a VIP online group or event. In this case, the holders can continue enjoying the benefits even if the NFT’s market value falls or if they no longer play the game. 

GameFi is becoming an important factor in blockchain adoption, as it introduces players to the concepts of NFTs and tokenization. Non-fungible assets already provide greater utility than traditional in-game assets, and in the future they may find even wider applications in GameFi and the metaverse. 

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