NFT and crowdfunding: a new frontier for indie game developers?

Thanks to crowdfunding and NFT, independent developers have a whole new way of raising funds

On 6 December, just two days after starting the sale of an NFT „card pack“ for their blockchain video game Alien Worlds, the 15-person team that makes up the development studio Daococo closed the sales due to running out of packs, after raising $250,000.

While this might seem like a pittance in a world where a single NFT creature can be purchased for hundreds of thousands of dollars, while more structured games like The Sandbox and Decentraland have raised millions, for a smaller studio these funds can guarantee whether or not a project is successful. According to Play To Earn editor-in-chief Robert Hoogendoorn, the unique set of incentives for buyers means that this system could well become part of a larger trend.

Hoogendoorn said:

„Finding smaller games, investing early and hoping they succeed is very similar to investing in cryptocurrencies. Everyone is hoping to find the next Minecraft and have their investment return 100 times over.“

Where traditional crowdfunding initiatives for video games allow early users to fund the development team in exchange for rewards of various kinds, such as in-game characters bearing their name or invitations to launch events, NFT-backed games have the potential to turn this concept into a real investment.

Alien Worlds co-founder Micheal Yeates said:

„For centuries, land ownership has been a privilege of the wealthy classes. Now, in the crypto world, everyone has the opportunity to earn passive income by owning land that is truly theirs.“
NFT-related in-game items and assets can accrue significant resale value should that game become popular: according to the Alien Worlds team, complex in-game economies can even turn them into interest-bearing assets.

Saro Mckenna, co-founder of Alien Worlds, points out:

„The NFTs in [Alien Worlds] are not like collectible NFT cards, because they have real characteristics that are recognised by the game’s smart contracts. One NFT might earn you more Trilium (Alien Worlds‘ in-game currency) when you use it, another might be used more frequently. […]

This is an important step forward for blockchain standards, where functionality is often still basic in some ways, despite immutability and decentralisation.“

Alien Worlds, which bills itself as „DAO and DeFi in space“, is one of the titles most at the forefront of monetising game-related NFTs, but Hoogendoorn thinks there will be more in the future:

„For developers it might seem strange to give players ownership over assets. But what if they received 5% commission on every in-game/on-chain transaction? They would create a new revenue stream. On top of that, a community would be created that has an economic stake in their game world. The engagement will be much higher because of the economic incentive.“

However, Hoogendoorn warned developers looking to monetise the new trend:

„You have to understand scarcity and build the game economy around that, and [make sure] you have a game economy that is interesting so that players invest time and money on it.“