Do NFTs Add Value to Games? Three Perspectives

The integration of NFTs into gaming raises intriguing questions about their potential to generate value in virtual environments. As digital scarcity and ownership become central to game design via blockchain, it’s essential to reevaluate what truly adds value to gaming communities. Alesha Serada, from the University of Vaasa, uncovers in her research that the true worth of gaming items emerges from social interactions rather than their rarity or cost.

Serada’s doctoral work delves into how NFTs, specifically within the context of pioneering blockchain games like CryptoKitties, build and influence value. Although industry experts grasp the dynamics of value creation and extraction, academic insights remain limited, contributing to gaps in consumer knowledge and corporate accountability in gaming.

Initially, in 2017, NFTs were seen as a beacon of change, promising autonomy from large game corporations. Yet, by 2024, this promise largely remains unmet, with only a handful of blockchain games achieving notable recognition or approval. Despite their initial potential, their actual player value appears restricted. However, these “crypto games” have been pivotal in advancing blockchain technology, as highlighted in Serada’s dissertation, with CryptoKitties being a prime example due to its rapid success.

Exploring the Dimensions of Value in Blockchain Games

Regardless of blockchain’s limitations, there are lessons for game designers in this sphere. Serada proposes a three-pronged model addressing different value types: the intended value by designers, the subjective worth perceived by players, and the communal value generated collectively. The latter is the most enduring, though ironically, it’s often lacking in blockchain games. Her study also offers a decision flowchart pinpointing the specific value constructed within an NFT game item.

“CryptoKitties was chosen due to its unprecedented popularity,” notes Serada. “It’s rare among blockchain games for fostering a strong, welcoming community, which has allowed it to weather numerous downturns in the crypto market. By integrating extensive data, both on blockchain and from the game community, my research provides a comprehensive look at these dynamics.”

For more insights, consider reading Serada’s dissertation on the University of Vaasa’s website: Value Creation and Price Negotiation on the Blockchain-Based Marketplace: The Case of CryptoKitties.

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