In this article, we’ll inspect the creation and utility of NFTs in the industry of eSports. ESports exist within a neat cross section of popular NFT use-cases: purely digital assets, and ‘merchandise’/ collectibles sold by athletes. In previous articles we’ve covered how NFTs can be used to sell art, commercialise ideas, create and attribute value to virtually anything (pun intended) as well as be used to raise capital for athletes and artists. With all these factors in mind, I propose that ESports is a fantastic industry to cultivate and sustain the growth and continued development of NFTs.
The nascent industry of eSports is a rapidly growing space which is gathering pace alongside its compatriot video game industry. It is important to note that eSports are dependent on video games, and at this time are at the whim of the direction video game developers take their games. To emphasise this dependency, let’s compare them with football: FIFA could not suspend all major football leagues around the world, but Activision could suspend all official Call of Duty tournaments (and even casual online iterations of the game). Major game development studios hold a lot of sway as to how great a role NFTs play in gaming and eSports in the near future. ESports can encompass any competitive event or activity involving a video game. This might be a competitive game of Pong, a speedrun of Dark Souls II, or the World Championships for the wildly popular title League of Legends. Just as there is a sport for most every game and activity we do (including Excel competitions and Spelling Bees), many facets of video gaming can be turned into competitive activities or sports (we’ll keep the definition of sports loose for the purpose of the article). With these eSports come both athletes and fans, eager to share and invest in their love of the sport. With this love comes the opportunity for the sale of goods, which nowadays includes NFTs.
ESports is just as capable as any other market at utilising the initial popular uses of NFTS. ESports athletes make gifs and jpegs for fans as collectible items. ESports organisations do the same. Some eSports organisations make NFTs to commemorate significant competitive victories, such as NFTs for depictions of championship rings/ trophies. These aren’t frontier or radical implementations of NFTs but they demonstrate that eSports is a sector that has enthusiastically embraced NFTs, and should be a space that continues to foster interesting growth in the space. Here are a few examples:
In terms of popularity, eSports is surging in popularity in Asia, rivalling other sporting events, and the industry is seeing a regular climb in western countries as well.
While the existing NFTs in eSports are not groundbreaking, the dimension that eSports operate in lends itself to a world of exciting possibilities. In the previous article, we discussed the issue of in-game assets (mostly cosmetics and characters) being isolated and restricted to the games in which they are made, bought and sold. NFTs could solve this issue by creating real-world, tradeable value for these assets that would allow gamers to retain some measure of the investment they put into these video games. eSports can introduce another layer to this solution by creating assets around eSports organisations and players that continue to hold their commercial value. An analogy from the physical world: imagine yourself a lifetime boxing fan, being able to buy the gloves worn by Muhammad Ali on October 30, 1974 when he knocked out George Foreman in Kinshasa - signed by Ali - and also being able to box with them yourself. The bonus is that the gloves suffer none of the regular wear and tear of real boxing gloves. For gamers, this is the level of fan connection that they might expect to see from NFTs.
What would this look like for video games? Well, individual progress or investment in these games is often measured by the amount or quality of weapons and attire a player has, and in some games these weapons or characters can wear different cosmetics. You can compare it to wearing player jerseys or signature shoes, except it becomes possible to use the tools that your gaming heroes used in-game as well as owning the collectible item. It may be hard to gather why people would value these digital, intangible assets as much as a sporting fan values a Masters-winning Tiger Woods club or Kobe Bryant’s 81-point game shoes. However, evidenced by the rising popularity of streamers and the entire profession of streaming/ gaming, many people idolise these gamers as much as others worship great athletes, artists and musicians. Compound this with the fact that these assets as NFTs would be immutable on the blockchain and immune to physical damage, they become treasures for gamers to be able to collect and use while gaming.
Now let’s go a step further and imagine a world in which NFTs are commonplace, they exist within most every game, they’re standardised across the video game industry so that they can be used across most titles of the same genre. Exclusive NFTs would provide more incentives for players to play longer and dedicate more time to the games, and for players would become far more valuable to possess than items and achievements as they exist currently. In such a world gaming NFTs would become its own market, with a lot of money surrounding it. It isn’t hard to imagine then that eSports organisations would start to form teams of professional players that hunt for and dedicate their careers to finding and earning these NFTs. They would become professional treasure/ bounty hunters. All of a sudden, these in-game items, which exist not only in game but on public blockchains, would become their own status symbols within the gaming community, and might even attract outside investors who would have not normally entered the video game space. In the event that Virtual/ Augmented Reality technology improves to a state where they become mainstream in gaming development, fully immersive worlds could be formed around the ‘real’ world that run purely off NFT-based economies and entities. Picture a digital version of your own home except where every item you own is digital and exists as a token on a blockchain. Imagine yourself as a wizard in a game where the experience is so immersive that you truly feel like you have magical powers. The technology makes it palpable, almost visceral. What could be more attractive as a gamer than to spend hours of your time being a digital wizard and earning money fighting creatures and discovering treasures in game, rather than typing out essays on why NFTs have so much potential as financial investments? A world where you are capable of things impossible in the real world. Maybe instead of striving to build a career working for a tech company, you instead train to join an eSports organisation looking for players to build out their teams of hunters exploring vast new digital frontiers.
That being said, in such a world, you wouldn’t even have to be part of a specific organisation. Likely, NFTs are so numerous and widespread that you could make modest amounts just by playing the game recreationally. And it would change the way games are enjoyed if suddenly you could realistically start to generate income from time invested into a video game (without making it a career). It seems far-fetched, but not impossible, and NFTs would keep these kinds of dreams tethered to the real world economy, not just isolated within the boundaries of video game developers. NFTs encourage more open source infrastructure: more value is generated for everyone if everyone can use/ access the NFTs.
It’s hard to fathom the state of humanity should this future come to fruition. While not impossible, it would take many years to become a reality. An ecosystem where NFTs were so pervasive would take years to manifest, and would require a significant increase in cooperation between major game development studios. Agreed standards would have to be set on NFT design and implementation. Furthermore, given that NFTs are currently built on several different blockchains (Ethereum, Solana, Cardano), there would likely be disparate factions of NFT markets and games. We are unlikely to see a Ready Player One universe where everyone converges on a single game. At this time, a few new game design startups have popped up aspiring for these lofty goals, but it remains to be seen if they can maintain enough momentum to continue to grow. What is more realistic within the next decade is to see eSports organisations and game development studios release NFTs to celebrate and commemorate moments and events, to promote players and teams, and provide more collectible assets for fans. There is also a good possibility that games will come to include NFTs which remain restricted within their own respective universes, but at least provide a platform for which in-game assets become tradeable beyond the game, and allow players to retain some value from their investments - of both money and time - or even grow the value of their in-game possessions.
