The growth of the NFT (blockchain) gaming market since 2021 has caused a large increase in the entry point for certain popular games of this type. To participate, the correct number or quality of NFT elements is required, such as the characters, spellbooks, plots, etc. In general, the price of this starter pack increases as the game in question grows in popularity, and can reach several thousand dollars (for the sake of comparison, a license costs to a “regular” game like Cyberpunk 2077 sixty dollars). On the one hand, this is an obstacle to prevent new players from joining, while on the other hand, it means that there is a need for financial and investment cooperation arrangements for people involved in the game. In general, an insufficient number of players inhibits the growth of the game and reduces the likelihood of market success.
For this reason, in the case of particular NFT games, systems are created that enable a kind of sponsorship of new players by people with capital that enables them to enter (purchase the NFTs required to start playing). The first scheme of its kind was introduced for Axie Infinity, and involved the distribution of profits from the NFTs earned and generated in-game, between:
- the player being sponsored;
- the guild sponsoring the player1 (10%);
- The recruiter who attracted the player in question and also serves as the scholarship officer.
Several games, and schemes and guilds formed independently, followed suit, resulting in the NFT scholarship model becoming commonplace. In practice, sponsored players are often players from developing countries such as Pakistan, Bangladesh, Nepal, Thailand, Sri Lanka or the Philippines. As they play, they work and produce higher values of the specific NFTs that work in the game. These NFTs can then be traded and generate investment profits.
The current situation and the rapidly growing value of the NFT gaming market may make this market increasingly attractive for investment purposes. In other words, the interest from people who want to profit from NFTs without playing can be expected to increase. Achieving this goal will require cooperation with people interested in playing, and this may take the form of the scholarship programs described above, the creation of guilds (which presumably require contractual arrangements), and direct investor-player agreements. The player gets access to the NFTs bought by the investor. In practice, questions have been raised as to whether actors and investors can enter into collaboration outside NFT’s grant models defined by certain organisations. The answer is that they can, as according to the principle of freedom of contract it is not prohibited to enter into agreements of this nature. The terms of use (license) for a particular game may provide certain restrictions in this regard. For this reason, it is advisable to start the analysis of the investment project related to NFT actors by going through the relevant terms of use.
Moreover, in each of the cases described above, from the perspective of Polish law, there are certain noteworthy issues to consider when signing an agreement of this type:
- Above all, this is whether a particular agreement may lead to infringement of trademarks or other intellectual property rights of the owners of the game. This could happen, for example, if the scholarship program or guild created was given a name that is a registered trademark of the manufacturer, such as the game title.
- It must be decided whether the agreement concluded directly with the player may have certain features that make it classified as an employment contract under Polish law. This will trigger a number of risks and fees for the investor, such as paying social security tax, and put it in a difficult negotiating position in the future if a dispute arises with the sponsored operator (for example, due to restrictions on the employment of minors).
- In the agreement itself, the issues of participation in the NFT (and who is stated in the agreement as the owner of the token), sharing of generated income, bearing the costs of currency conversion and the law governing the contract, are in particular. important.
It is therefore clear that investing in an NFT game must be considered in advance, not only with regard to financial, but also legal aspects. However, due to the growth of this market and its increasing value, it can be expected to become increasingly popular among both private and institutional investors.
