If you are familiar with cryptocurrency, the chances are good that you have heard of NFTs, or non-fungible tokens. NFTs are essentially digital media, art, or original information that utilizes encrypted keys that act as unique identifiers, helping to authenticate pieces of artwork or NFTs themselves. As NFTs begin to take on a life of their own with extensive communities, dedicated loyal investors, and even RPG and ARG games, developers are faced with many new realities and challenges that have never been seen before.
What is an NFT Game Developer?
NFT game development may be a new industry, but it is quickly becoming a thriving market, especially for those who are already actively engaged members of the cryptocurrency community. NFT game developers work to create virtual or ARG-type online games surrounding specific NFT collections and creations.
An NFT game developer is typically responsible for streamlining the process of selling NFTs, promoting contests, managing users, promoting players, and even implementing a suitable UI (user interface) and overall UX (user experience). They will need to consider the logistics involved in planning, building, developing, securing, and promoting an NFT game throughout the community, as NFTs are sent and received using encrypted platforms and solutions.
Legal / Regulatory Challenges
Whether working as an independent NFT game developer or for an NFT game development company, NFT game developers will likely face legal and regulatory challenges at some point or another, especially as their NFT game begins to grow and expand. NFT games are being developed in a gray legal area, meaning there is little to no representation available for those who are involved with NFT games or even NFT collectibles themselves.
As laws are introduced and regulations continuously shift and change, NFT game development companies and independent developers alike will have to swiftly adapt in order to avoid being fined or stopped.
Another legal element that should always be kept in mind when developing a new NFT game is intellectual property rights. Because NFTs are a new type of medium and a new collectible in the digital world, it is not quite sure how theft and other virtual crimes will be prosecuted. However, for any developer who is currently working on an NFT game or development project, it is imperative to keep in mind that intellectual property rights may become an issue at some point or another, especially as your game grows and begins to amass a following.
Choosing how to manage NFTs, collections, and players of your NFT game is another area of importance for any NFT game developer. Working with smart contracts and ensuring that all of the data sent and received is encrypted, protected, and secured is essential for any NFT game, even if you are only targeting a small niche community.
While the idea of developing an NFT game may sound appealing and exciting to most, it is also providing a brand new breeding ground for online hackers and thieves, especially those who are familiar with encrypted software and cryptocurrency/NFT communities already.
NFT game developers will need to ensure that the security and data protection of their users is a top priority at all times. With the rise of online hacking, phishing scams, and even identity theft, an unsecured site poses a great risk and threat to anyone who uses it, even if they believe they are doing so anonymously.
In addition to hacking and cybersecurity threats, there is also the potential for fraud, especially when developing games or software using unsecured tools and platforms. Proper monitoring, branding, security, and encryption are all key components of developing a successful NFT collection and/or game.
Developing an NFT game can be done independently and with little to no startup funds, especially if the NFT game developer who is creating the game is well-versed in UI, UX, security, and even marketing on their own. However, as the NFT community continues to expand at lightning speed, NFT game development companies and developers alike will need to consider the financial support they have available.
If an NFT game becomes popular overnight, server demands and costs can quickly skyrocket, which can cause the NFT game to become defunct without the proper financing available. Planning for the potential of growth and scalability is highly advisable for any NFT game development company or solo developer before embarking on any NFT project, especially in such a volatile market.
Another element that should be considered while developing an NFT game of any kind (and size) is scalability. The NFT market is extremely volatile and unpredictable, which makes it difficult to determine which NFT games, collections, and community members will rise to the top in a short period of time.
Because of the unpredictability of the NFT market, it is always advisable to plan for the potential of scaling, whether you intend to scale your NFT game in the near or distant future. Whether you have intentional plans to attempt to scale your NFT game or if you want to be prepared for the possibility of going viral or scaling without additional marketing efforts, knowing how to go about expanding your NFT game without causing disruptions or financial hardships can go a long way.
NFTs as Securities: Challenges Faced
Some who invest in NFTs do so as securities. However, while some NFTs are said to be sold as securities, they are only associated with investment contracts, according to the United States Supreme Court. After the ruling from the US Supreme Court, NFTs will now have to pass various sections of the Howey test in order to qualify as securities. This may pose a major risk to early investors over time.
Understanding the reality and challenges that NFT game developers are facing is crucial for anyone who has a vested interest in the world of NFT collectibles, investments, and startups. Familiarizing yourself with both the reality and challenges that are being confronted in real-time by NFT game developers can help you to determine what path is right for you and your business or brand within the realm of NFTs.