NFTs (non-fungible tokens) are unique digital media tokens that are part of the Ethereum blockchain, and gaming firms are willing to commercialise them. Blockchain gaming would revolutionise the gaming world and grow the potential of games as a trading platform, changing the future into a play-to-earn environment. This means that players will be able to earn profits while acquiring a portfolio of crypto tokens. This would establish games as a legitimate contributor to the crypto market through play-to-earn infrastructures.
The possibility of introducing NFTs in games was explored earlier this year, most overtly by Mythical Games’ E3 presentation where they discussed selling NFTs during the beta testing. Companies such as SquareEnix have already launched a successful experiment that simulated how blockchain-based digital content would function. The progression towards an in-game crypto market echoed the aspirations of companies such as Ubisoft, Electronic Arts, Take-Two and Epic. These high-profile gaming companies are currently formulating strategies and allegiances, demonstrating how blockchain trading is “the future of our industry”, as referred to by EA CEO, Andrew Wilson. Take-Two CEO, Strauss Zelnick, also confirmed his support for the NFT realm, stating that he is a “big believer” in the technology.
However, not everyone is in support of the introduction of NFTs due to the potential risks to the brand and the customer. As reported by Axios, Microsoft’s head of gaming, Phil Spencer, pointed out the ‘exploitive’ potential of NFTs:
“What I’d say today on NFT, all up, is I think there’s a lot of speculation and experimentation that’s happening, and that some of the creative that I see today feels more exploitive than about entertainment.”
These feelings echo past exploitive pay-to-win attitudes of other corporations, such as EA’s loot boxes and the colossal profits of FIFA through player cards. These measures have sparked government discussions in the past by attempting to classify them as gambling and creating the possibility of a change in the law. As reported by The Guardian, studies from the Universities of Plymouth and Wolverhampton on gambling and video games “showed a clear correlation between the use of loot boxes and problem gambling behaviour, under the commonly-used Problem Gambling Severity Index (PGSI) measure”. A play-to-earn NFT system could create a similar, if not bigger, issue with addiction. Players would not only earn in-game rewards for their investment, but also a perceived real-world monetary value. However, digital spaces could become a dangerous investment platform because nobody would own the item bought, but rather only the token of it, similar to investing in stocks.
Besides issues with addiction through a psychological reward system, there are environmental issues that have sparked debate over NFTs and cryptocurrencies more generally. The environmental waste created by cryptocurrency mining of the currencies would increase carbon emissions and proliferate climate change. According to Investopedia, due to the computations of crypto mining, the bitcoin network generates 11.5 kilotons of e-waste every year. In a recent study, researchers from the University of Cambridge showed how 65% of bitcoin miners are located in China, a country that generates most of its energy from coal. Not only that, but the production of equipment would increase the demand for workers and materials worldwide.
Technologies such as VR or AR, or the combination of them(i.e. XR) have the possibility of increasing in popularity over the next years. At Connect 2021, Facebook introduced its rebranding to Meta and the metaverse. In its promotional video, the company envisioned a virtual future with the help of the Presence Platform through the VR headset Quest 2, and “a $150-million investment in immersive learning to train the next generation of creators”, according to the company. These virtual environments will increase the possibility of an NFT future, where individuals will be able to display their unique items in their personal world. This future is controversial, as everything would be owned digitally, as opposed to having real-world value. Therefore, will anyone really own anything in these virtual worlds?
However, NFTs in games are still in the planning stage. Games would require a fundamental change in infrastructure to deploy this at a large scale. A major developer, Valve, has openly expressed its current disinterest in NFTs or blockchain by removing all crypto-related products from its store. The potential culture of games transforming into cryptocurrency trading platforms would also alienate a lot of players, as only a select few would profit from this, but the majority of people will experience monetary loss and potentially, mental health issues. A crypto future would require changes in law, clear terms and conditions, and a neutral regulator.