Hundreds of NFT games have emerged since the play2earn boom last year. And many have also fizzled out into oblivion. The competition in the space is only bound to get more heated up from now on. Many more will come, and likely most will be culled.
But don't misinterpret this as a dire forecast of play2earn gaming. It's the opposite. It means that we'll eventually get more games with better quality and higher survivability. There are games like Splinterlands that are still faring well despite the overall slump in the space, right?
I will be sharing insights on a type of NFT game that I've found to be a lot riskier than the rest. I'm not an analyst or anything -- I'm just a humble programmer and gamer -- so take these observations and tips prudently.
What are Mining-type games
NFT mining games are primarily characterized by an earning mechanism where you lock your NFT assets for a certain amount of time, then gain coin rewards after the said time lapses.
For a specific example: picture a game with a mercenary NFT that you can send on 24-hour "missions". A random reward of 10-20 coins awaits after completing the mission. As a player, you spend a few seconds clicking to set up the mission, then come back a day later to claim rewards and launch another mission.
Does that even sound like a game?
If you are familiar with the standard staking of crypto assets then the concept is not too far. But change normal staking's lock-in period from several months to several hours. Then you get NFT mining games' core mechanic. Also, change standard staking's APR that's around 100% to a ridiculous amount of over 1000s%. Red flags all over.
Gamer Perspective on Mining Games
I'm prefacing the succeeding statements by reiterating that I'm not a financial analyst or a blockchain expert, so I can't talk about factors such as market manipulation or scam contracts. I'm only offering a player's perspective, which arguably also significantly influences market dynamics.
In the plainest terms, the NFT mining games fail because there are very few new players joining or old players re-investing in the game.
Since mining games aren't really games and offer very little enjoyment, the primary motivation of users investing is to just earn coins. Unlike in Splinterlands, for instance, I am tempted to spend more to get stronger cards. Which, yes, partly comes from the want to earn more rewards and to bet in its future value, but is also influenced by my desire to compete and improve my card collection.
NFT Mining games don't have that kind of incentive. If I were playing a mining game and was able to get significant profits, I will probably re-invest and buy more NFT assets to boost my earning potential. But only at the start. It's so easy to get to a point where I say: "Okay, I'm good with how much I'm earning now. Since I don't know what happens in the future, I'll just take and take rewards and stop investing."
The game ends up with thousands of players generating significant amounts of reward coins -- continuously earning and selling. Which then severely outpaces the demand for the coin and crashes the game tokeconomy.
But won't new players buy the coin and keep the game alive?
If the game heavily relies on new players to keep the game afloat, then isn't it dangerously not unlike a Ponzi scheme. And we all know how that ends. NFT Mining games' main appeal to players doesn't go beyond the potential earnings, so I can't help but compare it to a Ponzi system. Not saying the mining games are a scam, but I'm mostly pointing out the inherent fault on such games that often leads to a tragic end similar to getting into pyramiding schemes.
Some NFT mining games start as a mining type but plan to expand the project by adding more gameplay types in the future. But these often fail too as they don't develop the other features fast enough before the players suck out the vitality of the game economy.
A Dark History of NFT Mining Games
I've mentioned how the everyday player psychology will potentially bring down the economy of an NFT mining game. But I'd like to expose a different weakness, a much more fundamental flaw to the game system. There were two early NFT mining games at the start of the play2earn boom late last year that have ended disastrously epic. The games essentially died because the finite reward pool depleted.
Sorry, even though it was notorious, I can't recall the very generic games. Its traces were mostly removed from the internet, so I can't find direct references. The Youtube videos that first exposed me to these mining games were likely to have been taken down. We may skip the specifics, but let's pick up on some of the general things that I recall about the two games.
Those early mining games reward BNB to players and not its own unique token. The players were happy to gain BNB -- it has a solid reputation and is much more preferential than getting rewards from a new, unpopular coin. It was all great until one day, the players visited the site and found these words: Reward Pool: Zero (or some similar variation). The game has dried up and has no more coins left to give. The early ones got huge profits, but the new players who just bought their NFTs were unable to earn back their investment.
The newer NFT mining games have learned from the reward pool allocation mistake and has avoided this issue. But its early iterations likely created a huge stigma that these mining games are only profitable when you are early. New players will only lose money if they join late. Perhaps, that's why when the game's coin charts are shaky, people start to panic sell. I suspect, the players were thinking that it was the final leg of the coin, and there's no other prospect so might as well sell everything. I say this because I saw extremely sharp dips in the coin value happening in a span of a few days, as seen on the sample charts below.
Some examples of NFT mining games
The games I'll mention aren't exactly goners (I think). I don't play these and only have limited familiarity so I can't tell how these games are actually faring. I've picked them as they are the recent popular ones. Also, these games fall under the category of "started as mining game but plan to expand" type so their future isn't absolutely bleak.
Not FUDding here (But okay, take it as FUD if you want). I'm just pointing out historic data. I'm not in the loop with these games so devs may have plans to save the game that I'm unaware of.
Crypto Mines
Crypto Mines, as the name implies, is a mining-style NFT game. You use its token, $ETERNAL, to buy and gacha Worker and Ship NFT assets. You both need Worker and Ship NFTs to send out on timed missions, where you earn $ETERNAL rewards upon completion. Higher NFT rarity equates to higher earning potential. You can play it for a few minutes to set up missions, then mark down its duration so you know when to come back to claim the rewards and launch a new mission. Rinse and repeat.
As I previously mentioned, there's a tipping point in NFT mining games when all players are earning + selling too much and collapses the coin economy. This happened on November 2021 for $ETERNAL after a lot of hype about the game. And I reckon, the surge in price further fueled inorganic, fast player growth which died down after a while. It reached its all-time high at $778 but started crashing down three days later. Now it sits at 0.08% of its ATH at $0.778.
CryptoMine's $ETERNAL - USD Chart Snapshot from CoinGecko
Crypto You
Crypto You's developers plan to add new game modes in the future and even touts it as a future metaverse game. But the first game mode that was launched was a mining-type game. Current gameplay is similar to Crypto Mines. It also has gacha system where you randomly get NFT assets of different rarities to earn rewards. You click some, then come back after X amount of time to claim rewards and do more clicking.
Its coin is $BABY and peaked last December 2021 at $3.84, days after its play2earn game was launched. It's now around 10% of its ATH at $0.35 which is not incredibly bad. Perhaps the metaverse that's in the works was its saving grace so the coin did not perform too terribly.
Crypto You's $BABY - USD Chart Snapshot from CoinGecko
To end
Is it good to invest on NFT mining games? There's a golden time on the very early stage where you can ride the 10x price increase of these NFT mining coins and earn huge profits. But to the risk-averse like me, I wouldn't want to spend money on coins that will possibly crash a few days later. I understand crypto assets are volatile but NFT games are incredibly more so. Since there's the game appeal and general gamer saltiness that affect the market. Also, the general history of mining games further destroys any faith in its longevity.
As a gamer, there's also a huge part of me that don't want to indulge in NFT mining games as I don't see them as games. I draw the line on spending on NFT games that I know I won't enjoy playing.
So if you're budget is limited or just don't like taking too much risk or someone who likes to actually play these NFT games, then skip the NFT mining games and search for other types of NFT game projects.
I welcome corrections and opposing opinions about my review. Let's talk about it in the comments section :)
Header image made with Adobe Express.