The Business Case for NFTs in popular games such as League of Legends

Gm everyone! The last year we have seen an explosion of NFTs, NFT projects, and games in the crypto space that utilize NFTs. What we haven’t seen is large game developers outside of the crypto space implement NFTs into their products. In this article, I take a look at how, and why, large game developers such as Riot Games should implement this technology into their games.

NFT Overview

For comparison, think of the Mona Lisa. There are likely hundreds of thousands, if not millions of physical copies of the Mona Lisa, but only one true Mona Lisa that was painted by Leonardo da Vinci starting in 1503. If the Mona Lisa was created in the modern world through a digital canvas, minting the image as an NFT protects against the ever so easy Ctrl C + Ctrl V ability to copy and ‘steal’ the image. Although others can still copy and paste the image with a screenshot, the original is registered on a blockchain for proof of ownership and validity, and copiers may even face legal action against them if they attempt to copy and sell an NFT image.

NFT Market Overview

At the start of 2021, the market cap for Art Blocks NFTs was estimated by Statista to be just $40,000. Come August 31st, that number had jumped to $529.55 Million, a greater than 13,000% increase in just 8 months. As of March 31st, their most recent data point, that number sits at $840 Million. I chose Art Blocks as an example for the growth of the NFT market, as it is a long standing NFT project with accessible data on growth, starting in November 2020, whereas more popular NFT projects such as Bored Ape Yacht Club and Moonbirds were launched in April of 2021.

Statista Art Blocks NFT Market Cap in millions of USD

The majority of NFTs exist as part of a Collection, with an estimated 95% of those existing on Ethereum. At the time of writing this article, the top NFT Collection, Bored Ape Yacht Club, had a market cap of $4.25 Billion alone (BAYC is built on Ethereum, and has an estimated market cap in ETH of 1,521,564). The estimated market cap for the top 10 NFT collections alone is 4,322,452 ETH, or just over $12 Billion, and with pulling data from coinmarketcap, the entirety of NFT Collections have a market cap of roughly 5,862,963 ETH, otherwise known as $16,360,774,140 in USD. This makes the NFT market cap larger than well known companies such as Fidelity ($12 Billion), Booz Allen ($11 Billion) and Nordstrom ($6 Billion). This is not to mention that NFTs exist beyond simply Collections, and as a part of other projects such as Metaverses like The Sandbox, Decentraland, and soon CitaDelv, the MMO Metaverse project that I am COO of.

Existing games that have NFTs integrated

The main thing that all of these games have in common is that they were created with the purpose of incorporating NFTs into their gameplay. In reality, one of the primary means of advertisement and excitement around these games was because they were created with the use of NFT technology in their gameplay. The players of these games come from the cryptocurrency communities, rather than from the typical gaming community. We have yet to see a major, existing game, start without having NFTs as part of their gameplay and then decide to integrate them.

How League of Legends could, and should integrated NFTs to their game

League of Legends is strictly not a pay to win game (unless you have infernal Shen), but rather a pay to accessorize your in game experience. Players can purchase skins, which are stylistic variations, of the champions they play so that they appear differently while playing them. Each year, Riot Games has sought to make these skins more and more rare and unique, now releasing skins with a monstrosity of a name such as “K/DA ALL OUT Seraphine Rising Star” and “Battle Academia Leona Prestige Edition”.

K/DA ALL OUT Seraphine Rising Star splash art

Some of these skins names have gotten so long and ‘prestiged’ that the name of the skin looks absolutely ridiculous on the loading screen.

Size 6 font of Duality Dragon Volibear Prestige Edition

Rather than making more Prestige skins, Riot Games could be taking the customization experience of in game assets to an even more unique level, not to mention a profitable level. Here’s 5 ways that they could increase the uniqueness of skins, increase company profits, enhance community engagement, celebrate player success, improve their competitive ladder, and more through doing this.

  1. Give unique NFT skins to each world champion. Every year, the winners of the League of Legends World Championship have a skin created for a champion of their choosing in their honor. In addition to this, Riot Games could gift each winner an NFT equivalent of that skin, that has their teams logo appear on the loading screen and showcased the skin in game through a mechanisms such as the logo appearing on recall animation. I created an example below. This would allow the winners to have the option of selling their NFT on the market, and we all know people would pay a pretty penny for them, or keeping them to be recognized even further for their success.
Example of World Champion NFT skin

2. Award NFT Skins to the top 10 ranked players in each region at the end of the season. Back in 2018 and before, Riot Games sent out backpacks or other physical rewards to those that achieved Challenger, the highest rank on the competitive ladder. Gifting an NFT with the Challenger logo attached through similar mechanisms as above adds an additional reward system to competitive Solo Queue play, something they proved they are not against doing by awarding a total of $400,000 to the highest ranked players in North America’s Champions Queue. What better way to incentivize players to try their hardest in every game than giving them something to showcase for their rank other than the typical borders they are awarded.

3. High end skins that are actually unique. Cut out these gimmicky Prestige Edition skins which cost 2x the price and simply change colors to gold with minor other changes. These NFT skins could be auctioned off, and I know that they would sell for way more than the cost of producing them. You also don’t have to make every single one unique, as plenty of existing NFT uses in games have minted tens to thousands of the same digital image, but this still adds the rarity and uniqueness that Riot games is looking for in their skins, as well as opening a new marketplace for League of Legends content, similar to how accounts with legacy skins like PAX Jax and PAX Sivir sell for close to $1000 today.

K/DA Akali Prestige Edition versus regular

4. Allow community members to design and submit splash arts and in-game assets for minting approval. People already make their own custom skins and in-game looks all the time, and sometimes they are the same level of quality of the Riot Games created skins, if not better. By allowing players to create (and potentially sell) their own skins, Riot Games could create an entire ecosystem of community generated content without paying any costs of development themselves. They could be as rigorous as they wanted for review, ensuring that no skins that aren’t up to their standards make it through the minting process.

5. Enable the use of NFTs as in game assets outside of solely champion skins. Riot Games already has wards with skins, and they don’t have any issues with these looking wildly different depending on the skin. They have enabled the use of emotes and selecting which emotes you want to have access to while playing. Both of these methods of user expression could be extended in the same way that champions skins could be, through digitally transferable NFTs.

Potential concerns, and addressing them

Secondly, Riot Games may not want there to be an influx of unique skins in their environment. They may be concerned about the ability of players to be able to recognize the champions with unique skins, creating competitive integrity issues. There are multiple ways to address this. First, allow players to turn off skins on their client, so that every champion appears with their default while playing (personally I would love this regardless). Secondly, ban these skins from being used in competitive games as needed. They already do this with certain skins that have clarity issues. Lastly, World Champion or Challenger skins could appear the same in game, and only showcase their uniqueness in the loading screens or right as the game loads and no combat can occur, eliminating any competitive integrity issues even in non-professional games.

Other games that have potentially better uses for NFTs than League of Legends

Counter-Strike

Counter-Strike, and more specifically CS:GO, has a similar skin functionality to League of Legends, but rather than customizing the characters you can purchase, earn, or trade for skins on your weapons. Many of these skins have unique descriptions, and they all have a rarity rank attached to them. By adding the use of NFTs to manage their high-rarity skins, CS:GO could open up a bevy of technological benefits for the trading, purchasing, and management of these unique skins.

Fortnite

Fortnite could implement skins in many of the same ways that League of Legends does. They also have the ability to add additional mechanisms for awarding NFT skins to players who reach certain milestones before others, such as completing the Battle Pass first, being the first player to reach 25 kills in a game each season, and more.

Destiny 2

MMOs have a lot of opportunities for NFTs becoming an exciting part of their gameplay. Many MMOs such as the Destiny Series, World of Warcraft and Guild Wars have a concept of ‘raids’ in one form or another, where players join together in a party to complete a challenging series of battles and puzzles. For many of these games, there is a race to see which group of gamers can complete the raid first. Giving in game assets as NFTs to the parties that complete these objectives first give even more incentive and excitement to these challenges.

Conclusion

If you enjoyed this article, give this account a follow! I will be writing weekly on topics such as this related to cryptocurrencies, Cardano, and general gaming topics.

Gn

-Matt

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Matthew H

COO at CitaDelv Studios. Twitter Profiles: @Lowsmithy @CitaDelvStudios Discord: https://discord.gg/QM2PVXhcJU