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Play-to-earn gaming NFTs
There is no IRS guidance on NFTโ€™s or crypto rewards earned whilst gaming, so you would need to examine the specific circumstances and consult with a tax professional to determine the tax treatment.
Activity differs between games however, generally, it is likely that โ€˜in gameโ€™ earnings are taxable as they involve some form of crypto-to-crypto trade.

Although there is no guidance from the IRS, we would expect that selling or trading NFTs or assets within a game would generate a capital gains disposal. Again, clear IRScguidance is lacking but, as NFTs are classed as digital assets, which are subject to capital gains, we expect the normal rules of short-term and long-term capital gains to apply.
NFTs share some characteristics of fine art and trading cards so some speculate that they may be regarded as collectibles. We await specific NFT IRS guidance.

There is no guidance from the IRS however we assume that earning an NFT or asset within a game would be taxable as ordinary income.
The IRS is yet to issue guidance on the tax treatment of NFTs. You should seek help from a tax professional.
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Selling & Trading NFTs or assets within a game
Earning NFTs within a game