N(o) F(reaking) T(thanks): The Backlash Against NFTs In Video Games – Fin Tech

N(o) F(reaking) T(thanks): The Backlash Against NFTs In Video Games – Fin Tech

Video games are historically a driving factor in the development of new technology. When the crypto-based assets known as non-fungible tokens (NFTs) first arrived, video game developers embraced them at lightning speed. In what seemed like overnight, many PC and console-based video games announced that they would incorporate NFTs into their platforms to expand their gaming universe and increase revenue. At first blush, it was an interesting and novel idea. Unique active wallets in blockchain games grew by 2,000 percent and won $2.5 billion in investments in the 12 months ending March 2022. Players seemed intrigued by the ability to buy NFTs to improve their in-game grades with skins, tools, and other items, but opposition arose shortly after NFTs began appearing in games. This increasingly vocal opposition continues to push back against gaming companies for even announcing plans to connect NFTs to games.

So what happened?

Some players were upset by the idea that NFTs would force them to pay to unlock features they believe should be included in the price of the game purchase. Others argued that grinding for the resources required to obtain in-game NFTs would rob many games of their fun. Many gamers see the incorporation of NFTs into video games as yet another predatory attempt by gaming companies to squeeze more money out of gamers. They clashed with Ubisoft, Square Enix, Zynga and other major game developers over the introduction of NFTs and crypto in their favorite titles.

Many gaming companies, on the other hand, see NFTs as a means of verifying digital assets on the blockchain, conveying proof of ownership that players can sell for profit on online marketplaces. Gaming companies claim that incorporating NFTs into their games helps build community and “play to earn” opportunities and take the position that NFTs support players and NFT artists. Many players remain unconvinced, especially those who still suffer from bad experiences with downloadable content (DLC) or loot boxes. Despite game companies’ attempts to draw distinctions by citing blockchain benefits and resale values, an extremely vocal contingent of players remains steadfast (reminiscent of World of Warcraft in the early 2000s).

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NFTs can offer exclusive in-game assets or highly sought-after items, making them potentially worth thousands of dollars and well beyond the reach of the average player. Far from democratizing and making gaming more inclusive, NFTs can reward players who can afford to “pay to win,” making the playing field more unequal than ever before. In addition, some gaming enthusiasts fear that the introduction of valuable NFTs could cause the price of games to increase dramatically, excluding even more potential players from the “community” and diluting the experience.

As if this were not enough, players have expressed significant concerns over fraud, theft and hacks targeting NFTs and their owners. Illegal activities around NFT transactions, such as those that launder money. The gaming industry is already a breeding ground for scams, spam and scams, and many players believe NFTs will only further attract the worst elements in society. The NFT market is not strictly regulated, so the threat of players being cheated is real. Marketplace Itch.io gave voice to the anti-NFT contingent in a tweet slamming the NFT craze, calling it a “scam,” “get-rich-quick” scheme and an avenue for shady parties to exploit players. Security issues abound, such as the hacking of the Axie Infinity usage blockchain where hackers stole $625 million.

Players also decry the negative environmental impacts NFT mining and the blockchain are inflicting on the world. Ethereum, the main blockchain platform for NFTs, releases the same amount of carbon dioxide emissions into the atmosphere as the entire country of Libya. The enormous amount of energy consumption that occurs when minting, buying and selling a NFT produces carbon dioxide emissions that cause climate change. NFT’s carbon footprint is significant – the sale of one piece of crypto art consumed 8.7 megawatt hours of energy, equivalent to two years of energy use in an artist’s studio.

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Are NFTs still the future of gaming?

Some gaming companies have joined the anti-NFT crowd, and a few even agree with their views. Electronic Arts (EA), Team17 and Epic Games have put the brakes on their NFT initiatives. Discord, STALKER 2, and MetaWorms canceled their NFT projects after facing player backlash. Steam has banned all cryptocurrencies and NFTs from its online gaming platforms. Mojang’s July 2022 announcement that they would ban NFTs from the wildly popular Minecraft game sent shockwaves through the gaming and NFT communities. Citing a desire to promote a safe and inclusive experience for its players, Minecraft has banned the integration of blockchain servers.

Despite the fact that several gaming companies have abandoned, or at least taken a step back from NFTs, others continue to embrace them.

Perhaps they are aiming to attract the “silent majority” of players who are intrigued by the potential to earn NFTs from their activities. A survey of 1,500 players earlier this year revealed that only 23 percent were “not interested” or “not very interested” in NFTs to play for profit. In fact, the poll revealed that more than two-thirds already do, including 4 percent who use video games to build their NFT collection and another 12 percent who have already monetized the game by selling NFTs they’ve earned. According to Interpret, the firm distributing the survey, “NFTs can play an important role in retention (crucial for live service gaming), as over 45 percent indicated that being able to earn NFTs through gaming would increase their current level of engagement by games. Ultimately, Interpret expects player sentiment to continue to warm toward play-to-earn as the industry unpacks how best to position this new model. NFTs represent a shift in power to players and provide a greater sense of true ownership from the items they earn both in-game and out-of-game.”

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Conclusion

Gaming companies must find the balance between using NFTs to enhance gaming experiences while compromising the experience for players who cannot or refuse to use them. Due consideration of player safety and support needs as well as minimizing environmental impact will certainly help improve the prospects for NFT in gaming. Significantly, GameStop is moving forward with its NFT marketplace. Others, such as NFT World, which sold NFTs that fit into the Minecraft world, have committed to exploring other options, including developing a Minecraft competitor. But for now, there has been an accounting for the otherwise burgeoning crypto-based gaming market. While the gaming and NFT world is still evolving, gaming companies’ romance with NFTs may have cooled for the foreseeable future.

The content of this article is intended to provide a general guide to the subject. You should seek specialist advice about your specific circumstances.

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