Wednesday, August 10

NFTs threaten the essence of the game

Let’s start with the most basic. The happy acronym corresponds to the term Non-fungible token and refers to a special type of cryptographic token that represents something unique. That is to say, a digital element that can be distributed or transferred freely like Bitcoin, but unlike these, they are not mutually interchangeable, since they are unique and indivisible as well as transferable. They also include, and this is very important, the inherent ability to prove their scarcity. Thanks to technology blockchain, its authenticity and ownership history is proven while additional information can be entered, such as a breakdown of the compensation received by the original creators, which increases with each transaction.

NFTs are not an absolute novelty in the art world. this same year Christie’s managed to place one for 58 million euros, but we can go back to 2014 to see the first example: Kevin McCoy’s Quantum. Neither in music (where Grimes or Mike Shinoda have sold specific pieces) or in cinema (with digital posters of Deadpool 2 or what you just did Tarantino with deleted scenes Pulp Fiction and that has led to a conflict with Miramax). However, now is when many of the big publishers in the video game industry have realized that the concept fits perfectly with the digital economies of their games, especially their games as a service, ecosystems that are expanding over time. and with strong multiplayer components.

The pieces are moving on the board. The main players in the industry are positioning themselves and it is impossible to find a greater discrepancy regarding the position they should adopt. From the frank disinterest of Microsoft or the open hostility of Valve (which has restricted access to Steam to all these practices) to the manifest interest of Square Enix or Ubisoft’s early forays into the matter. There is no general consensus.

Everyone is aware of the fiasco that was Star Wars Battlefront II (2017) for Electronic Arts’ efforts to promote loot boxes at any cost (lootboxes), a mechanic borrowed from gambling (bets) that met with a frontal rejection of the users and even with certain attempts at political regulation in several countries. In few media companies are content creators at the mercy of their public perception of the way they are in the video game industry. Good communication and a good public relations strategy can create feedback networks that can work wonders. And the opposite is also true. A company that does not take care of its image in the public sphere can suffer unspeakably when it comes to placing its products.

A few weeks ago, Ubisoft announced Quartz, its proposal to introduce NFTs in its games with a model play-to-earn. What does this mean? That players, apart from paying to get these NFTs, can get them simply by playing the game. That is to say, they can earn money just from their normal activity of interacting with the product. If it sounds too good to be true, that’s because it is. The catch that Ubisoft didn’t announce in its initial presentation is the approximate times it takes to get one of these NFTs owned. Shortly after it was learned that in order to get a custom helmet in Tom Clancy’s Ghost Recon Breakpoint it would take a whopping 600 hours of gameplay. Or what is the same, 25 whole days playing or 15 weeks of 40 hours of work. Because that’s what it would be, a job.


And how much money would all that time spent getting one of the NFTs in the game translate into? Right now it is not possible to know, because in the two main markets where Quartz operates (Objikt and Rarible), the helmet has not been sold. The pants and a special weapon yes. But for very little money. The pants used to cost 100 hours of play (when they were available, which they are no longer) and in Objikt they have been sold for 10 tezos, about 52 dollars at the moment. 100 hours of work to get an object whose real value is 46 euros It does not seem like a good deal for those who have believed the siren songs of the French multinational. At this time, all Ubisoft NFT transactions accumulate around $2,000 in sales. Nor does it seem that it is for the company itself.

It is no coincidence that they started with Ghost Recon Breakpoint. The game released in late 2019 was a resounding commercial failure. It is a game from which they are not going to get more revenue and a suitable testing ground to see how the water temperature is. The masses haven’t embraced Quartz but the French know this is a long-term game. Before officially launching it in early December, they did a round with influential media outlets in each country where they gave journalists an early look. They were also very transparent in communicating the cryptocurrency they would be based on: Tezos. On December 6, it was trading at 3.35 euros. On the 7th the embargoes were lifted and it was announced to the general public. On December 9, it was trading at 5.45 euros.

How many Ubisoft workers and international journalists used inside information to buy Tezos the days before and sell them after the announcement? In traditional stock trading this would be a textbook case. insider trading, but the world of cryptocurrencies is still the wild west where regulators don’t go. Another very significant issue is that despite the fact that the sales are not many, there is a Rarible user who does not stop receiving these NFTs. He doesn’t buy them. they give them away. The movements are the least suspicious (possible money laundering?) and reveal the gigantic gravitational well of corruption in which Ubisoft wants to participate voluntarily.

Quartz announcement, Ubisoft’s proposal for NFTs.

But are not the only ones. In a letter to investors on the occasion of the new year, Yosuke Matsuda, CEO of Square Enix, has transferred the good eyes with which the Japanese observe the implementation of NFTs in their games and formats blockchain to, in his words, achieve self-sufficient and decentralized games. He talks about how NFTs can do wonders for the liquidity of digital assets and how gamers can be rewarded for their addictions to games, user-generated content that until now was made altruistically. Without a doubt, this could be an interesting application of the model, but we cannot be naive.

Square Enix has in its portfolio Final Fantasy XIV, the most desired MMORPG of the moment and a true digital ecosystem with an economy based on the interaction between players. The characteristics of the game make it perfect for the implementation of NFT’s in the form of equipment., mounts or even furniture for the virtual homes of the players. The title already shows terrible real estate pressure due to the scarcity of available land and the enormous demand it has experienced in the last year. It also has a digital store where items are already sold in exchange for real money, where only the company itself sells, and another system to do it with in-game currency, where players can do it.

Until now, the development team has had a zero-tolerance policy for player-to-player trading for real money. In fact, before the advent of Endwalker, the latest expansion, updated the user license agreements (known as EULAs) to pursue this behavior even more vigorously. So it is somewhat surprising that Yosuke Matsuda seems so enthusiastic about NFTs, presenting them as a way to give the player more power over their digital belongings, when it seems that their star developer, Naoki Yoshida, is not very keen to include that dimension in the game he directs and produces and which has become the most profitable title in the legendary franchise.

Dutch cultural historian Johan Huizinga wrote in the book that gives this blog its name that “the game, in its formal aspect, is a free action executed ‘as if’ and felt as if it were situated outside of ordinary life, but which, despite everything, can absorb full to the player, without there being any material interest in it or any profit being obtained from it (Man playing, 26).” The inclusion of NFTs and, above all, the play-to-earn model is a torpedo in the waterline of that definition. The essence of the game implies that it is useless, that is, that it has no end other than spontaneous gratification itself., fun and emotions caused by the activity itself. There are already people who play for work.

QA departments are essential for video games to reach the market with the level of technical polish that players demand. It is considered a gateway to the industry because it is the most exhausting and painful job one can imagine, going through the same levels over and over again trying to replicate and document each bug in the code so that programmers can fix it. It’s not fun at all. It is a job and for that they should be financially rewarded. If we move the model to the other side of the barrier, outside the development ecosystems, we risk ruining an activity that has helped preserve the mental health of millions during these two years of pandemic, for example.

Because just like in the past, microtransactions and loot boxes altered video game design, blurring the lines that separated formats. free-to-play of the ones you bought in the store, the same will happen with the NFTs. Games will become artificially more cumbersome to accommodate them and will be perverted by an influx of economically vulnerable users that can be exploited by other more affluent. It happened in the past with the gold farming from World of Warcraft in China and is currently happening in the Philippines with the Vietnamese game Axie Infinity, a substitute for Pokémon that requires a large investment in order to have the “privilege” of training some creatures in the form of NFT’s.

Video games are permanently on the wire. The tension between creativity and commerce is much stronger than in other media, partly due to the mentality of the companies that share most of the market. Tech companies with an enormous capacity to make money and little thought about how to do it. Beneath this line of voracious executives, however, are other idealistic developers and a veritable legion of gamers who fight hard to preserve this patch of solace in the midst of a world already heavily polluted by productivity mandates and the constant tension of extreme competitiveness. The arrival of NFTs in video games is inevitable. The acronym works like a charm at shareholder meetings. But the last word will have the user communities. The rejection right now is predominant. Ubisoft’s initial failure with Quartz proves it. However, this has only been the first contest in a long war that will last for years and whose outcome is completely uncertain.