NFTs Are a Grift; NFTs Are the Future—Gamers, Over to You 

Is it a ruse or a revolution? The inexorable infiltration of non-fungible tokens (NFTs) into video games has inflamed a long-running dispute in the cryptocurrency and gaming communities. (Neither of whom are afraid to voice their opinions online.) While some of the more outlandish claims made by NFT’s proponents appear unlikely to come true, the technology has the potential to change the way gamers and developers interact.

NFTs are based on the same blockchain technology as cryptocurrencies, however, unlike bitcoins, which can be exchanged for bitcoins, each NFT is unique. Because of the cryptographic underpinnings of blockchain technology, these tokens can be used as a certificate of ownership for digital things that are both easily verifiable and impossible to forget.

NFT advocates “get wrapped up in the technologies of ownership and how markets will work. That’s just not the source of value in games.”
Edward Castronova, Indiana University

More lately, the technology has made its way into the game business, with both new blockchain game companies and experienced developers praising its merits. NFTs may appear to be a better fit for gaming than digital art since they may be tied to one-of-a-kind in-game goods, such as costumes or weapons, that can be utilized by their owners and are not as easy to replicate as a JPEG. However, gamers have mostly been antagonistic to the technology, with many accusing it of being used to extort more money from users. However, proponents argue that it allows players to genuinely own their digital things and sell or trade them without being bound by the whims of a single retailer.

“They’re the perfect vehicle to store unique game data that players should be able to own and use, potentially across other experiences,” says Aleksander Larsen, the cofounder of Sky Mavis, which produces popular NFT game Axie Infinity. As gamers play various titles, they can accrue NFTs linked to costumes, weapons, characters, and achievements, he says, which they can either decide to sell on once they are done with a game or retain as unique collectibles.

NFTs allow game producers rapid access to tremendous financial capabilities by connecting game objects to the wider blockchain ecosystem, according to Larsen. Some games have taken use of this to develop a new gaming model known as “play-to-earn,” with Axie serving as its poster child. Players purchase NFTs of monsters that can be battled for bitcoin or bred to create more NFT monsters that can be sold or rented out to other players. Larsen claims that the strategy allows gamers to capture some of the value created in the virtual world because Sky Mavis gets a share of all transactions. “By sharing parts of the revenue, we’re attempting to make the pie bigger,” he explains.

Xavier Coelho-Kostolny, a 3D-character artist, compares the NFT-gaming craze to taking a cup holder from a BMW and trying to put it in a Honda Civic.

According to Castronova, the technology would improve the transparency and security of these in-game economies while also making sophisticated trading functions more accessible. However, he believes it is only a minor step forward. While NFTs have the potential to improve existing enjoyable games, he believes they are more often than not a distraction that causes creators and investors to lose sight of what customers care about.

“They get caught up with ownership technology and how markets will work,” he says. “In games, that is just not the source of value.” People play games to have fun, he claims, and adding NFTs won’t offer any meaningful value until they improve the gameplay. The failed attempt to add an auction house to Diablo III, which would have let players to trade items for real money, highlights how trading dynamics can quickly degrade rather than improve a game.

One of the more enticing promises made by proponents of NFTs in games is that they may make it easier to move in-game things between games. One of the arguments for Ubisoft’s bad reception of a collection of NFTs was this.