Are NFT And Blockchain Games The Future Of The Industry?
Recently, the words NFT and Blockchain games have been thrown around a lot when it comes to the supposed next step in video game evolution. The CEO of EA, Andrew Wilson, declared during the company’s earnings call this week that NFT and Blockchain games will be the future of the video game industry. Additionally, earlier this week, Ubisoft made a similar announcement during its earnings call. According to IBTimes, Ubisoft CEO Yves Guillemot considers blockchain games a “revolution” in the gaming industry. But to understand where they’re coming from let’s first break down what exactly an NFT is.
What Is NFT?
NFT stands for non-fungible token. Non-fungible means that it’s unique and irreplaceable. For example, a dogecoin is fungible. If someone gives me a dogecoin, regardless of what kind it is, it’s still just a dogecoin the same. On the other hand, football jerseys are non-fungible. If someone gives me a Brisbane Roar jersey and I give them my signed Kevin De Bruyne Manchester City home kit, the two are not the same despite both being football jerseys.
A majority of NFTs are part of the Ethereum blockchain. This cryptocurrency’s blockchain supports these NFTs, which helps them store extra information and operate differently from regular cryptocurrency. NFTs can literally be anything digital from high-end art to items in a game. The Game Crater could even turn this article into an NFT.
What Are NFT Games?
An NFT is a unique entry on the blockchain that gives the original owner public ownership over it. Just like any other asset, it can appreciate in value over time.
This is the foundation of so-called “play-to-earn” games. These games usually require players to pay a certain amount of cryptocurrency up-front to play the game and collect unique in-game items. Those items can then be sold to other players when they appreciate in value. Moreover, players also generally have a say in the development of the game as de-facto shareholders of that game. As the player base’s monetary stake in the game increases, so does the game’s overall value.
What Are The Potential Problems With NFT Games?
While some embrace this novelty, as with anything new, many oppose it as well. This duality is best exemplified in the difference between rival video game digital distribution services. Steam unequivocally banned blockchain games for its platform while Epic Games welcomed them with open arms. One big issue with Ethereum mining is that it greatly harms the environment because of the massive amount of energy it requires.
However, there are also direct consequences for the gaming industry itself. The profit potential for gaming NFTs is high enough that collectables, which might otherwise be bundled with games or sold as physical objects, will not see the light of day. For SEGA, that perhaps includes some of the original production sketches of Sonic, or a game’s original soundtrack. No one really needs either, but it would incentivise SEGA to sell them as NFTs to a handful of buyers and keep them out of the public’s reach for years.
Companies could also produce limited-edition games. If the last owner is unable to remember their login or otherwise manage ownership, that version of the game would be lost forever. It would be akin to losing access to your bitcoin wallet rather than forgetting your PSN account username and /or password.
Furthermore, most of the NFT games that already exist aren’t exactly AAA releases. Most of the time they are just glorified cryptocurrency mines. But there have been numerous instances of outright scams with developers pocketing millions of dollars worth of cryptocurrency from their player base.
Yet the most sinister side of NFT is the playground for thieves. NFTs are a gold mine for copyright trolls. Numerous content creators have already had their work stolen and claimed through copyright by thieves. This is especially concerning for the art community, but neither gaming nor individuals should take this lightly.
Are NFTs the future of gaming?
It’s about 10 years too early to answer that question. However, that hasn’t stopped talking heads, the media and netizens from giving their input on the matter. For my part, I give NFTs critical support. I find it interesting as a concept and many content creators have made a lot of money selling their work. And while its implementation has its issues, it’s still in its infancy.
Nevertheless, I remain critical of NFTs. Its downsides could have potentially devastating impacts on privacy rights, civil liberties, copyright laws, the environment and even national security. Without a doubt, further research is required in this emerging industry and we each have our part to play in doing so. Of course, I intend to do my part as well.