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How NFTs are Powering a New Wave of User-Generated Content in Decentralized Gaming

As industries from big tech to retail grapple with their future in the digital metaverse, it’s evident that one industry has been storming ahead of this particular curve for quite some time. Gamers have long sought out immersive virtual worlds, resulting in many of the best-selling titles and franchises of recent decades – Minecraft, Grand Theft Auto, Tomb Raider, Super Mario – the list goes on.

So now, it’s hardly surprising that gaming is blazing a trail into the metaverse. Established titles have already begun to expand their universes beyond pure gameplay. For instance, last year, Balenciaga teamed up with Fortnite to launch a collection of digital attire for in-game playable characters.

There are plenty more exciting developments in the decentralized space as demand for NFTs and play-to-earn games such as Axie Infinity has risen over the last year. Introducing digital assets to the equation has begun to blur the boundaries between gaming and DeFi – a new phenomenon known as “GameFi,” which has now caught the attention of mainstream outlets, including Bloomberg.

A Boom in User-Generated Content

While increased demand is ostensibly a good thing, in gaming content, it simply compounds an age-old problem for the industry – it’s impossible to keep up. Developing and publishing a game involves significant up-front investment and, as such, a high degree of risk.

As such, the industry has struggled to scale to meet the insatiable demand of the gaming community. But now, it’s spotting the opportunity in user-generated content. Roblox has grown rapidly over the last decade to become a $30 billion company on the back of a huge community of developers who build gaming content for the app.

One exec from Electronic Arts highlighted that the company itself had managed to turn out 5,000 pieces of electronic clothing for flagship title The Sims over five years. In contrast, a user-generated content (UGC) site for the game had generated over 39,000 pieces in the same time frame. As she pointed out, the company can’t keep pace with its players.

It’s also worth considering the phenomenal scale of the billion-dollar esports market– a subsidiary of the broader gaming sector that’s expanding at pace. Esports is effectively an entire industry of user-generated content around gaming. Not to mention the fact that many of the world’s biggest influencers, including PewDiePie himself, emerged from gaming.

Decentralized Platforms Offer the Best Opportunities for Creators

Centralized gaming companies are increasingly turning to UGC as a way of overcoming their content problem, but for creators, the biggest opportunities are likely to emerge from the decentralized segment. True asset ownership, peer-to-peer transactions, and the opportunity to increase profitability by avoiding platform charges will ultimately prove too attractive to resist.

Following the lead of trailblazers like Axie Infinity and The Sandbox, other projects are now moving into the decentralized UGC space. Kawaii is one such example, with an ambitious 2022 roadmap for its anime metaverse game Kawaii Islands holding some exciting developments in UGC. Kawaii Islands is a multiplayer simulation and social game in the manga style launched in September 2021.

Over the coming year, the project will begin launching its metaverse infrastructure and introduce social features between games on the platform. Thereafter, we can expect to see the first iteration of a “create and earn” protocol allowing anyone to generate their own games and NFTs in the Kawaii Islands metaverse. As well as play-to-earn, users can also participate in staking and governance of the decentralized ecosystem.

Later features will allow people to open their own Kawaii Islands business, opening the door for branding and merchandising opportunities.

Monetizing the Peripheral Market

Focusing on the lucrative peripheral market, Starly is another blockchain project looking to unlock some of the value in the NFT creator economy. Starly is a launchpad and marketplace for creators to generate an economy around their own gamified NFT collections. Any influencer or creator can create their own NFT collection on Starly using its standardized format.

Each collection is organized into sets of 21 cards, comprising 11 commons, six rare, and four legendary. Collectors engage with the game through its immersive pack-opening experience and by trading their cards on the marketplace to complete the full set. Creators can offer a reward program for collectors who achieve the full set, providing new channels of engagement and community building.

These developments all spell great news for game developers, players, and the broader community of influencers, esports fans, and more. UGC will provide a steady stream of content and monetization opportunities, while the advent of decentralization will empower people to transact directly and develop innovative gaming concepts outside of the big studios. Blockchain, NFTs, and the metaverse are unleashing a new wave of creativity on the gaming sector, with unparalleled value to match.

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