What are the benefits and challenges of creating and trading NFTs in gaming platforms?

We are the beginning stages of blockchain adoption and its uses in traditional society. NFTs in recent years were viewed as investment pieces but overlooked as what their true use case is, which is digital ownership. Certainly, there is opportunity to make profits on holding something unique or scarce, but the goal in the ever advancing digital realm is giving people proof of ownership of what is created in this space. I can see games such as "Fortnite" using NFTs for its various skins, themes, and packs as seasons rotate in the game - adding a much more versatile ecosystem for players.

This COULD be great for gaming, but companies need to get on board in the right way - especially with AAA games and the big players like Sony and Microsoft. At the moment, many gamers (that are not web3 gamers) see the tech as 'scammy' because of the way that publishers have used NFTs before - to make as much money as they can. Companies need to use the tech to showcase what can be done with it to improve a gamers experience, not to just make money.

A great example of this is an old NFT project called 'Loot'. It allowed people to mint NFTs that featured a list of items, a cloak, a dagger, etc with different stats. There is no game behind this, but rather the NFTs can then allow people to create their own games based around those items attached to the NFTs.

It’s all about personalization! NFTs allow gaming companies to create that next level of engagement and loyalty. It also allows for additional monetization opportunities by creating a secondary markets empowering creators

It's true, they can do all of the above but it must be done in the right way. Adults play games but so do kids - systems have to be put in place to protect them and take away any aspects of gambling. The technology could be great but safety measures have to be put in place.

True, but there is going to be a lot of 'red tape' to overcome and rights to be agreed, I think, before cross-platform type NFTs exist. I think there will be some great collaborations and partnerships in the future and we've already had many. But also watch out for bigger companies 'lawyering up'. Nintendo are renowned for this.

This is why NFTs are so powerful. It can make digital assets valuable. This is why gaming is such an interesting place for the technology and I'm surprised that so few web2 companies are trying to use the technology in a good way.

Agreed that some of these issues are important to figure out in the gaming industry, especially when a large majority of games are aimed at kids. Being able to, for example, transfer an NFT of an item from one game to another game by another publisher is going to be steeped in legalities. Compatibility is key, and also publishers and gamers seeing the benefits of just playability with NFTs rather than just monetising assets. It could open a whole new era of gaming if done right.

Performing transactions on chain, dependent on economic conditions, could lead to congestion and high fees. We have even found that the largest platforms have ran into blockages that occur that can prevent transactions for millions of people. There is still a long road to regulatory clarity and government intervention to protect against the risk of these instances.