Yesterday, the gaming community collectively rioted about a love letter Square Enix president Yosuke Matsuda wrote about the blockchain and NFTs, stating that both would be a key part of the company’s strategy in the past year.
NFTs invading traditional video games has been a burgeoning front in the war between gamers and publishers, though really, mostly the executives running those companies, as reportedly there’s internal pushback on the idea of blockchain/NFT integration within some of these companies, like we saw with Ubisoft.
Ubisoft recently attempted to launch limited quantity NFTs in Ghost Recon Breakpoint, which was met with mass player outrage and no meaningful aftermarket sales. STALKER 2 was forced to cancel and NFT-based promotion for the game after player pushback online. Despite this, Square Enix, and no doubt other companies, are pushing forward with NFTs in games and blockchain-based offerings.
There’s a refrain I keep hearing that this is “inevitable” for gaming, and even skeptical critics in the press are saying this sounds an awful lot like the whole Oblivion Horse Armor situation from ages ago. That was famously the first real introduction of post-launch microtransactions, where Bethesda charged extra money for armor to put on your horse in Oblivion, and it caused an explosion of outrage among fans.
The idea is that though gamers were mad at first, over time, this practice became accepted and now almost all games have microtransactions or loot boxes and everything in between. The theory is that while NFTs are being implemented badly and are causing outrage now, that will fade in time.
I don’t believe these are equivalent situations. Here’s why.
The arrival of Oblivion Horse Armor and the advent of post-launch DLC was something that could be seen as an immediate benefit to publishers and developers. One of two things was true. Either you could take something that might have been in the game to begin with, and sell it separately, creating extra money from already-completed work. Or you could do some amount of extra work, if the content was not planned for launch, and still make a large deal of money proportionally to the hours invested. It was, and has been, a win-win for publishers, and has helped offset the rising cost of game development and pad profits.
This is not true with the idea of NFTs, at least not the way they keep being pitched. Some common “benefits” of NFTs that are extolled by the crypto-faithful:
Limited quantity items produced as NFTs allow players to feel special attachment to their gear – Players already feel attachment to their loot and collections in games, and issuing limited NFTs that can be snatched up and only transferred through sale destroys the motivation to acquire top-end loot in many game economies. And making that loot powerful, not just cosmetic, would be instant-death for the concept, as even current microtransactions have learned not to go down that path. Yet most blockchain games are fine with selling power to the highest bidder. And if you do want to sell power and make money from digital items, those avenues are already there in mobile and gacha games, no blockchain required.
Limited quantity NFTs are a potentially great revenue generator for publishers – The idea that producing a unique item that only a few hundred or few thousand players have access to is not feasible in most games. There’s an entire thread from a Bungie developer on this that talks about the process to make such an item, likely for a massive loss compared to a more traditional microtransction:
Players want to “Play to Earn” and have their time investment rewarded through valuable NFTs or tokens – Turning your gaming time into a low paying job has psychological effects on the player that these crypto advocates are not thinking through. We don’t even need to imagine how this might feel, given that we already exist in a world of gold and item farming for cash. Those are not “players,” they are low paid laborers experiencing the game in a way no one wants to play. Gamified token generation is not the same thing as playing an actual video game. This idea leads to bizarrely tone deaf statements like the one we got from Square Enix’s Matsuda:
“Advances in token economies will likely add further momentum to this trend of diversification. I see the “play to earn” concept that has people so excited as a prime example of this.”
“I realize that some people who “play to have fun” and who currently form the majority of players have voiced their reservations toward these new trends, and understandably so. However, I believe that there will be a certain number of people whose motivation is to “play to contribute,” by which I mean to help make the game more exciting.”
If you start to view “playing to have fun” as optional in your game in an effort to make it a revenue generator for both you and (to a far lesser extent) the player, things are not going to go how you think they will.
NFTs would allow items to be used across multiple games through consistent player ownership – This is one of those “has anyone here ever seen a video game before?” moments. The logistics of trying to create items that could be used across entirely different games is not remotely logistically possible outside of some fifty-years-from-now vision of the metaverse that does not exist and will not exist for eons. I imagine it would be hard enough to transfer items even within the same publisher (ie. Ghost Recon Breakpoint items to Far Cry), and forget about anything larger than that, like taking Destiny armor sets into Fortnite or Call of Duty loadouts into Battlefield. It’s utter nonsense. Literally not anywhere close to being a reality. This is the flying car pitch of NFTs.
NFTs allow players to feel secure about actually owning their digital items – If there’s one thing I certainly do not associate with NFTs right now, it’s security, given that every other day some story is trending on my timeline about someone’s hacked wallet and losing access to their precious ape pictures which requires the freezing of sales and recovery of assets to rectify. And in twenty years of gaming and building up inventories, I’ve never felt like my digital items were at risk of being stolen outside of…someone hacking your account or somehow scamming you in-game, which again, is consistently happening in the NFT space too. I’ve lost items through tech glitches on occasion, but gear/loot/inventory restoration is a common practice in those situations.
NFTs give players intrinsic value in their collections – I’ve talked about why limited quantity NFTs don’t makes sense, so that just leaves non-limited quantity ones. But in that situation, that is effectively no different than the way things are now in games that have auction houses where you can buy and sell items for in-game or real world money. Real world money auction houses have in the past, decimated game economies and player motivation so badly they had to be removed (Diablo 3) so I’m not sure this is the selling point it’s believed to be. And there is no real justification for any of this to need the blockchain as an essential part of the process.
I’m not saying the blockchain will never have any use at all in gaming. And sure, better ways of tracking digital ownership might be a reasonable thing to have in the future as more and more virtual spaces begin to connect to one another. And yet literally nothing about the current pitches to integrate NFTs in games feel like they solving any immediate problem or providing a benefit to the publisher, developer or player. Instead, they are proposing environmentally questionable retreads of systems that already exist in games currently, or pitching ideas that are so ludicrously impractical they would be laughed out of any dev meeting. Sadly, those are meetings I imagine are currently happening between crypto-blinded execs and hapless devs trying to explain that no, we can’t build NFT loot in our AAA shooter that will carry over into Roblox and Minecraft.
If crypto enthusiasts actually care about adoption and not about making a quick buck, they need to back off when it comes to gaming with these absurd, almost insulting proposals that show how little they know about the reality of both playing and building games. If this is the future of gaming, someday, the current situation is going to set it back for miles, and this slow burn “Horse Armor” implementation is going to feel like raging inferno that will wake the gamer hive every time it comes up for the indefinite future. I would not want to be the next studio or game that announces NFTs in the current landscape, and yet, the execs living in this bubble sure are going to keep trying.