We might be on the brink of the former – or the latter, a digital dust bowl. The gaming NFT market alone is expected to skyrocket. Based on HTF Market Intelligence Consulting estimates, that’s a leap from $1.5 billion in 2025 to a mind-boggling $10 billion by 2032. That's a 25% CAGR. Numbers like that make you stop and read, right? Before we all start imagining Lambos purchased with Axie Infinity profits, let’s pump the brakes. This explosive growth hinges on one critical, often overlooked factor: NFT Royalties: The Creator Lifeblood?

Royalties: Fair Play Or Just Tax?

Think about it. What makes an NFT valuable? Rarity, sure. Collectibility? Absolutely. Beyond all of that is the creative work that went into it. The artists, the developers, the storytellers. Having spent countless hours researching, writing, editing, designing and perfecting their award-winning digital assets. Royalties are their lifeline. They’re the mechanism by which their partners make sure they get a share of the perpetuating value that their work creates. We’re not speaking about an abstract idea in this regard. This is about real people, real livelihoods.

Now imagine spending those same months, years, creating that beautiful new in-game skin or that engaging metaverse asset. You drop it, it blows up, and all the players are freaking out and trading it like crazy. If you don't receive royalties on those secondary sales, where's the justice? It's like a musician writing a chart-topping song and never getting paid when it's played on the radio.

Here's where the unexpected connection comes in. Think about the traditional art world. This is because artists’ entire world continues to depend on galleries and auction houses to move their work. These institutions may grab a cut, of course, but the artist’s estate would get enrichened by the resale value of their pieces. Therefore, royalties in the NFT space are the digital descendant of this system. They are a built-in mechanism to ensure that creators continue to reap the rewards from the widespread appreciation of their work.

Today, many claim royalties are simply a tax, an unfair punishment of buyers and sellers. Opponents argue that it is anti-competitive, that consumers will just not engage with NFTs that have royalties. I think that's a short-sighted view. Without royalties, we’re in danger of creating a world where the platforms and first movers win—and no one else. In the process, the producers on whom this fragile ecosystem ultimately depends would be squeezed out. That’s a formula for catastrophe, a race to the bottom where quality is sacrificed and innovation vanishes.

Unsustainable Growth: The South Asian Lesson

I've seen this movie before. Having grown up in South Asia, I know too well what happens when development is left to flounder without guardrails. The chase for the fast buck always seems to wash away our community sensibilities. We see businesses consistently choosing short-term cost-cutting measures over offering livable wages, thus exploiting workers and lowering product quality. We view communities splintered by myopic race for personal fortune, eroding the connective tissue of society that’s our only defense against life’s woes.

Gaming NFTs are no different. That 25% CAGR looks great on paper, but if that rapid-fire growth is happening at the direct cost of the creators on a platform, that’s not sustainable. Such a sugar rush would be recent history’s biggest bottleneck, an unsustainable artificial stimulus sure to produce a painful crash.

  • Consider This: A thriving NFT gaming ecosystem requires a healthy balance between innovation, investment, and fair compensation for creators. Without royalties, we risk replicating the exploitative practices that have plagued other industries, both online and offline.

We need to learn from these mistakes. We must begin to create a system where fairness, transparency and long-term sustainability are the primary guiding principles. This involves not only adopting new royalties, but making sure that they are being enforced on every platform and in every use—especially across platforms and jurisdictions.

Enforcement: The Wild West or New Frontier?

That's the million-dollar question. How do we guarantee that royalties get paid out? Unfortunately, the NFT space continues to feel like the Wild West in most respects. It fails to provide meaningful standards and robust enforcement tools. Companies such as Animoca Brands, Immutable X and Sky Mavis must lead the charge in developing the template. They’re going to have to bake royalties into their APIs, making them mandatory and transparent.

This isn't just about altruism. It's about self-preservation. To compete for the best talent, these platforms need to make sure that they are giving creators a good deal. That is critical for creating an ecosystem that’s dynamic and connected. If not, those creators will just head over to greener pastures, bringing their creativity and their audiences with them.

The difficulty with that, that of course, is that the NFT space is global and decentralized. Collecting and enforcing royalties on a global scale and across varied platforms is an expensive, convoluted process. It will take a different approach, one that calls for shared responsibility among developers, platforms and regulators. That depends on a lot—most notably, it requires the formation of industry standards and best practices. It's not impossible.

At the end of the day, the success of the Gaming NFT market will come down to whether we can build a fun, fair and sustainable ecosystem. Royalties are not only their nice-to-have, they’re their need-to-have. If so, they’ll most certainly help to lay the groundwork for a future that respects our nation’s creators and rewards innovation. With this promising new technology, everybody stands to gain from the economic development it creates. Otherwise, we will continue to make this gold rush a digital desert. That's a future no one wants. This is NFT Gaming’s Make or Break Moment.

  • Smart Contract Enforcement: Build royalties directly into the smart contracts that govern NFTs.
  • Platform Agreements: Require platforms to enforce royalties as a condition of listing NFTs.
  • Legal Frameworks: Develop clear legal frameworks that define and protect NFT royalties.

Ultimately, the success of the Gaming NFT market depends on our ability to create a fair and sustainable ecosystem. Royalties are not just a nice-to-have; they're a must-have. They're the foundation upon which we can build a future where creators are valued, innovation is rewarded, and everyone benefits from the growth of this exciting new technology. Without them, we risk turning this gold rush into a digital wasteland. And that's a future no one wants. This is NFT Gaming's Make or Break Moment.