[Gamer’s World] NFTs: Crypto Greed or Wave of the Future?
On July 3rd on IGN JAPAN, we published an article titled “Why do gamers hate NFTs?” by our freelance writer Nobuaki Shibuya. It went on to become the second most read article on our site this month.
As Shibuya writes in his article, Japan has yet to see a large influx of NFT-related content in video games. But the trend is growing in the West, and the strong response among IGN Japan’s readers suggests that the Japanese gaming community is following this development with interest.
But why do do players hate NFTs? Which Japanese companies use them? And what is NFTs anyway?
What is NFT?
NFT stands for “non-fungible token”, which in this case means a digital code that proves ownership of a digital product.
These NFT digital codes have been associated with the art world in particular, and video games are close behind. On the surface, the concept provides a way for completely unique digital items to be sold and resold with a clear line of ownership recorded in the blockchain, just as you would barter with the deeds to a house.
The main intended benefits are that creators can create and sell one-off creations of unique value and get paid accordingly. And the other advantage is that speculators can buy disposable digital goods that may (or may not) increase in value – and which can be resold.
As a common example, you’ve probably seen JPEG images of a monkey wearing a hat, available in hundreds of small variations and selling for a premium because they’re “unique”.
Buyer beware
Except, of course, in the case of an artwork or in-game item, a digital thing is itself copyable. Haters of NFTs – and there are many – are quick to exclaim that a certificate of ownership for a JPEG image is not worth the binary image it is printed on, because anyone can copy a JPEG with a right-click of the mouse. Unlike a house, where the deeds prove ownership of a single physical building, NFTs are more akin to buying a receipt, not the product itself.
As our writer Shibuya points out in his article, the ownership of such tokens does not currently mean legal ownership of the data associated with it in any country on earth. Buyer beware, indeed.
In gaming, the introduction of NFTs has generally meant endlessly customizable in-game elements sold by game publishers as a means for players to show their individuality. But while these elements may technically be unique, they are such minor variations and offer so little in meaningful gameplay terms that players have largely mocked them.
Ubisoft proved this with its disastrously received Ghost Recon Breakpoint NFTs, where players could purchase digital pants and other items for their game character with a unique serial number. And other games have suffered similar fates.
The situation is soured by the fact that many, many of those pushing NFTs are simply out to make a quick buck, in the same general Web 3.0 bucket as cryptocurrency miners and vague proponents of the metaverse.
The level of trust in these new technologies is understandably very low. There’s something really… creepy about it.
Bypass the ‘Lootbox’ and ‘Gacha’ systems
The backlash among players has not been subtle. When GSC Game World announced that the game STALKER 2: Heart of Chornobyl would support in-game NFTs, the uproar on social media was so intense that it backed off and canceled the plans within 24 hours.
The same has happened with Team 17 and their plans for an NFT art series based on the classic Worms game series. And others too.
So why do do players hate NFTs? Our author primarily argues that it is because gamers are inherently tech savvy.
In gaming, the actual sale of digital items is nothing new – from the games themselves to the in-game items sold by publishers and even community members, we buy ethereal digital stuff all the time.
We like to spend money on a skin that makes our Fortnite character look like Captain America, or buy additional content for our favorite games. We understand the pros and cons of freemium and free-to-play, and we know which games do it in a way that benefits players (Fortnite, Apex Legends, Fall Guys and many more) and which are a rip-off.
Through this, we’ve seen the controversies time and again: lootbox and “gacha” systems that encourage players to spend real money on randomized items, with countries across Europe requiring regulation to prevent predatory behavior:
- Additional purchases that simply unlock content that was already on the disc were arbitrarily kept unavailable to the player until they paid for it.
- Purchase of digital games that come with licenses that do not give the player legal ownership of their copy of the game.
And so on. We can smell a digital con, and NFTs certainly smell it.
Savvy Gamers vs Crypto Greed
Shibuya also presents other reasons, from how cryptomining has caused a global shortage of PC components (it’s complicated) to concerns about the impact of energy-intensive blockchain technology on global warming.
I would argue that another reason is that despite all this negativity from the gaming public, gaming companies continue to invest in NFTs anyway.
Gaming companies have tried various inventive ways to implement NFTs, but none of them have benefited the players – they don’t make the games more fun or interesting. They only serve to make the publishers more money. And the only people who want them are the publishers and NFT speculators.
Players say “No thanks!” to NFTs, but they force them down their throats anyway. So of course we’re going to dislike them even more.
Antithetical to gaming
IGN Japan’s article includes a quote from Gabe Newell, the founder of leading PC gaming platform Steam, in an interview with Rock Paper Shotgun. In it, he says his company Valve found that in games containing NFTs, “half of all transactions turn out to be fraudulent transactions.”
Newell cites this as one of the reasons why Steam introduced an outright ban on NFTs in games on its platform.
“Half of all transactions turn out to be fraudulent transactions”
Xbox has hinted at similar policies against NFTs. And while Nintendo and PlayStation have yet to comment, Shibuya points out that the very existence of a decentralized blockchain system is antithetical to the extremely centralized business of a gaming platform.
Square Enix is still interested
As for Japanese gaming companies, Square Enix – the massive publisher and developer behind Final Fantasy and Dragon Quest – has shown a keen interest in NFTs and related technology.
Square Enix president Yosuke Matsuda told investors in a New Year’s greeting that he expects NFTs to “become as well-known as physical commodity trading.” And in fact, the company has already tested NFTs with its own Million Arthur series as a “proof of concept.” The company is now preparing to sell physical and digital figure sets of its flagship Final Fantasy figures that include an NFT alongside a real action figure.
Earlier this year, Square Enix sold its Western development studios Crystal Dynamics, Eidos-Montréal and Square Enix Montréal to Swedish publisher Embracer Group for a shockingly low $300 million. Parting with IP such as the popular Tomb Raider franchise, Square Enix announced that it would use the funds to invest in blockchain (the digital ledgers in which NFTs are recorded), as well as AI and cloud technology.
Game companies are, of course, technology companies, and it is natural that a large game company like Square Enix would want to investigate these new technologies. But the idea that investing in NFTs is more valuable to this giant publisher than nurturing a beloved series like Tomb Raider struck many as cause for concern.
Konami’s move
Meanwhile, in 2021, Konami – the publisher behind Metal Gear Solid – auctioned $160,000 worth of NFT items to mark the 35th anniversary of the classic Castlevania series.
The publisher hasn’t made a new Castlevania game in years, so to see it instead celebrate the series’ birthday by making NFTs left many fans disappointed. The move even drew criticism from outspoken PlatinumGames developer Hideki Kamiya, who commented that NFTs have “no benefit to users at the moment”, before joking: “If it smells money, Konami is going to be there on a moment!”
Legal clouds, but money talks
Sega, who had considered entering the NFT realm, seems to be rethinking their plans now after observing the negative audience response surrounding NFTs. The company’s official statement said it is considering “what will and will not be accepted by users” before pursuing the initial plans.
And indeed, there is still some debate about the legality in Japan of games that use NFTs in conjunction with “gacha” mechanics, where games offer a random prize payout. If the prizes in question are NFTs and thus have monetary value, they may violate Japan’s strict gambling laws.
That said, our writer points out that schemes like those from Square Enix and Konami have been marketed much more towards a Western audience. He writes: “Japanese gaming companies do not openly advertise NFTs to Japanese users, and Japanese players remain indifferent to NFTs.”
But winter is coming. I feel it is inevitable that these Web 3.0 trends will continue to grow and they will spread to Japan like everywhere else. Trends like this are partly controlled by the market, yes, but also by the investors in the market.
Money talks, and if game publishers feel they have a vested interest in making NFTs work, they will eventually. Whether they can also make it beneficial for players is another matter. But as the interest in our article suggests, Japanese gamers will be forced to pay attention soon enough.
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Daniel Robson is the editor-in-chief of the video game news site IGN Japan. Read his series The world of players on JAPAN Forward, and find him further Twitter here.
