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PoliciesNFTs: Play to win
NFTs could be your brand’s ticket to a new and lucrative online audience.
This week we journey through the brave new world of NFTs and virtual earth-building. So if you’ve ever wanted to get that hard-to-reach gaming audience tuned to your brand, keep reading.
Kevin Trinh
Strategy
Trending
5 minute read
Unless you’ve been offline for the past few weeks, you would have heard about NFTs. To many they may seem like uncharted territory, but they could also be the key to accessing the coveted gamer audience.
The concept isn’t new to them like it is to the rest of the world – this is their language, and you could be speaking it.
The concept isn’t new to them like it is to the rest of the world – this is their language, and you could be speaking it.
In short
- Non-fungible tokens (NFTs) are unique digital files that can be sold or auctioned via cryptocurrency.
- The crypto/NFT movement is not a new concept for gamers.
- Authentic use of NFTs can help your brand win the attention of this lucrative audience.
WTF is an NFT?
An NFT is a non-fungible token. Still confused? Most of us are, so let’s dive a little deeper.
‘Non-fungible’ means that something is unique and can’t be replaced. A non-fungible token (NFT) is a digital file with these characteristics.
When a non-fungible token is created, like a piece of digital art, that file is left with a unique footprint that can be used to identify it as an original. So, while the file could be copied or reproduced (just like copies or prints of physical art), the token ensures that the original always has a unique identification marker that can be verified using blockchain technology.
Because the token is included in the ‘background’ of the file, it can come in almost any digital form, most commonly an image file (like a JPEG or GIF) or a piece of music (like an MP3). And like any physical creation, these files can be sold or auctioned – in the case of NFTs, via cryptocurrency.
‘Non-fungible’ means that something is unique and can’t be replaced. A non-fungible token (NFT) is a digital file with these characteristics.
When a non-fungible token is created, like a piece of digital art, that file is left with a unique footprint that can be used to identify it as an original. So, while the file could be copied or reproduced (just like copies or prints of physical art), the token ensures that the original always has a unique identification marker that can be verified using blockchain technology.
Because the token is included in the ‘background’ of the file, it can come in almost any digital form, most commonly an image file (like a JPEG or GIF) or a piece of music (like an MP3). And like any physical creation, these files can be sold or auctioned – in the case of NFTs, via cryptocurrency.
Are NFT’s new?
Not really. While loads of brands are seemingly jumping on this trend at the moment, the concept of exchanging currency for virtual assets has been around for a decade – and gamers are more than familiar.
The lineage of NFTs may differ depending on who you ask, but the concept can be tracked all the way back to 2012 when they were known as Coloured Coins.
Fast-forward to 2021, where people are now not only gobsmacked by the thought of paying for digital ‘pixel art’, but the amount this art is going for.
The lineage of NFTs may differ depending on who you ask, but the concept can be tracked all the way back to 2012 when they were known as Coloured Coins.
Fast-forward to 2021, where people are now not only gobsmacked by the thought of paying for digital ‘pixel art’, but the amount this art is going for.
“The concept of exchanging currency for virtual assets has been around for a decade – and gamers are more than familiar.”
Why all the hype now?
I believe it’s caused by a combination of factors, including:
- A renewed interest in cryptocurrencies.
- The after-effects of COVID-19 pushing interest in alternative revenue streams.
- The everlasting appeal of collectibles (think baseball and Pokémon cards).
- The need to ‘flex digital clout’.
Who’s leading the way?
One of the more well-known initiatives in this arena right now is NBA Top Shot. Customers can buy and own game highlights as NFT collectible basketball cards – a way to definitively prove the authenticity of their collection. Top Shots has generated over $230 million in revenue, and new packs are constantly selling out.1
Their new vision for these collectibles incorporates infamous and extremely lucrative loot box/japanese gacha elements that companies like EA, Steam and Epic Games have been profiting from for years.
Some quick stats:
Their new vision for these collectibles incorporates infamous and extremely lucrative loot box/japanese gacha elements that companies like EA, Steam and Epic Games have been profiting from for years.
Some quick stats:
- FIFA Ultimate Team Packs have reportedly made EA Sports over $6B (yes, billion) since 2015.
- Counter-Strike: Global Offensive players spend well over $100,000 for individual video game skins that don’t change the game in any way, shape or form outside of aesthetics.
- Epic Games’ Fortnite Cosmetics take in almost $1.8B (yes, again, billion) a year from in-game cosmetics such as skins, emotes, and dances that customise a player’s avatar.
Will NFTs work for your brand?
Some aspect of your business might lend itself to using NFTs already. For example:
American fast food chain Wendy’s did this well in their recent Fortnite venture. Playing as Wendy, they set about destroying all burger freezers in the game to champion ‘fresh, never frozen’ beef. They made their brand message part of the entertainment, rather than an interruption of it – and that message was viewed more than a quarter of a million times.5
It’s also important to realise that not every brand is primed to find a foothold in this market – gamers are some of the most brand-loyal customers in the world, but they can identify bullsh*t a mile away. Authentic and strategic use of NFTs could open up a whole new market for your business, but disingeuine cash grabs could just as easily mean game over.
- A luxury handbag brand might sell an NFT equivalent with every purchase so customers can match their in-game avatars.
- A car brand might offer vanity plates for racing games as singular as their real-life counterparts.
- More generally, a brand might sell digital tokens that equate to real-world perks at their restaurants, entertainment venues and more.
American fast food chain Wendy’s did this well in their recent Fortnite venture. Playing as Wendy, they set about destroying all burger freezers in the game to champion ‘fresh, never frozen’ beef. They made their brand message part of the entertainment, rather than an interruption of it – and that message was viewed more than a quarter of a million times.5
It’s also important to realise that not every brand is primed to find a foothold in this market – gamers are some of the most brand-loyal customers in the world, but they can identify bullsh*t a mile away. Authentic and strategic use of NFTs could open up a whole new market for your business, but disingeuine cash grabs could just as easily mean game over.
on Consumer Culture Theory (CCT)
Why are people around the world paying millions of dollars for NFTs? It comes back to a perspective within CCT called symbolic consumption, which is informed by symbolic value and self-perception. When society deems a commodity to be valuable, consumers will pay for the status, membership, scarcity, and identity associated with it.6
To infinity and beyond
Bombshell – there’s another planet Earth.
It’s the latest NFT trend – a virtual 1:1 replica of the planet broken down into 5.1 trillion land tiles. These can be owned, bought, and sold in a fluctuating property market, just like that in the real world.7 And investors, gamers, and trend speculators are already pretty keen.8
One day, founder Shane Isaacs hopes it will evolve into “Earth’s fully immersive virtual reality similar to The Matrix or Ready Player One”.9 There are plans to make properties rentable, resources mineable, incomes taxable, and space advertisable.7
In the meantime, Phase 1 lets you buy and sell land tiles from $0.10-$30.7 One guy has E$908,080.08 worth of assets.9
Now for the million-dollar question: is this just another video game crypto-fad or the next big leap for the digital economy?
It’s the latest NFT trend – a virtual 1:1 replica of the planet broken down into 5.1 trillion land tiles. These can be owned, bought, and sold in a fluctuating property market, just like that in the real world.7 And investors, gamers, and trend speculators are already pretty keen.8
One day, founder Shane Isaacs hopes it will evolve into “Earth’s fully immersive virtual reality similar to The Matrix or Ready Player One”.9 There are plans to make properties rentable, resources mineable, incomes taxable, and space advertisable.7
In the meantime, Phase 1 lets you buy and sell land tiles from $0.10-$30.7 One guy has E$908,080.08 worth of assets.9
Now for the million-dollar question: is this just another video game crypto-fad or the next big leap for the digital economy?
References
- Jabari Young, People have spent more than $230 million buying and trading digital collectibles of NBA highlights (28 February 2021) CNBC.
- Zak Wojnar, FIFA Ultimate Team Has Made EA Over $6 Billion Dollars Since 2015 (23 May 2020) Screen Rant.
- NikolaSavic, Someone paid $100,000+ for a CS:GO skin, the most expensive skin purchase in history (12 July 2020) Ginx Esports TV.
- Oscar Gonzalez, Fortnite made $1.8 billion last year, but it's still a game in decline (22 February 2020) CNET.
- The Drum, Wendy's: Keeping Fortnite Fresh by VMLY&R (Jan 2020) The Drum.
- B R Martinez, Purchasing behaviour on aesthetic items in online video games with real currency. The case of Counter Strike: Global Offensive (2017) Uppsala Universitet.
- Gaia Lamperti, All eyes on San Marino in the race to buy virtual land (1 March 2021) domus.
- James Hennessy, I bought my own apartment on a virtual version of Earth– and made a whopping 24 cents doing it (8 March 2021) Business Insider Australia.
- Earth 2, About (2021) Earth 2.
