Gamers hate NFTs—here's why that's good for the game industry

We’ve seen this happen time after time. First, certain publishers decided that it would be cool to chop chunks off games and sell them separately—and now, DLCs are an industry staple. Then, the same thing happened with loot boxes and micro-transactions, both now seen in dozens, if not hundreds, of games on multiple platforms. At every step of the way, gamers came out in force with backlash, and yet, we are where we are. Are non-fungible tokens (NFTs), the world’s latest crypto craze, the next chapter in this story?

In recent months, many studios displayed an interest in using NFTs in their products—and gamers, their core target audience, were less than impressed. Square Enix’s president Yosuke Matsuda released a heavy-handed letter that infamously acknowledged the criticisms from those who “play to have fun” but still hailed blockchain and Metaverse as the future of gaming. Earlier, Ubisoft and GSC took flak over their respective NFT initiatives, with the latter even putting a lid on it.

Gaming fans are not alone in their skepticism. Even though a plethora of studios and publishers are looking for ways to get on-chain, many developers are not sold just yet. Josef Fares, founder of the studio behind last year’s massive hit It Takes Two, minced no words in his rejection of the technology. And he’s not alone, with other industry professionals voicing concerns over NFTs’ carbon footprint and questioning whether they bring much to the table as a design feature.

The dissonance is clear. A major part of the gaming world, both devs and players, is having none of the rosy corpo-speak blurbs about the glorious blockchain future of entertainment. While some of the critics may be, for their part, overestimating the doom and gloom involved, their backlash is still a positive thing for the industry.

Hell hath no fury

Many critics hold the view that NFTs are nothing but a cheap cash-grab. No wonder, given how many lazy cash-grabs gamers have already seen. DLCs and loot boxes are, again, very much a case in point, but they also tell us that details really depend on the developer. And the good thing about the all-around backlash against NFTs is that it will help weed out the cash grabs.

Consider Sega, for example—they’ve been paying attention, and they’re keen to avoid the keel-hauling that the public gave to Ubisoft and Square Enix. It’s not hard to imagine more board room meetings in other companies with managers shaking their heads as they review their sentiment analysis graphs. “No, we’re not going in,” one of the suits says with a sigh. “Can’t spook our investors like that.”

The thing is, most of the lazy cash-grabs, from microtransactions in paid AAA games to the mindless wade into the NFT craze, are brainchildren of corporatism in gaming. These are the things that get the suits excited, while your everyday developer is probably way less interested. Developers want to make good games, while execs want to make good profits. Their means and goals may seem aligned, but only at a glance.

The pushback we see may steer more of the corpo-types away from NFTs. They want to see profits, so if there’s a prospect of an outraged consumer exodus, they would probably think twice before pushing the pedal to the metal. Know the horse armor sets for TES 4: Oblivion, sold at $2.50? Or the endless flow of DLCs for The Sims series? Thanks to the furious gamers, the philosophy behind things like that may not find itself a blockchain manifestation.

What’s important to note, though, is that there is a silver lining to a cloud every now and then. Take DLCs, for example. There are the rare gems, like the Blood and Vine for cult classic Witcher 3, which added hours’ worth of engaging content and earned stellar fan reviews despite charging gamers $19.99 on top of the core game’s price. And let’s not forget how No Man’s Sky went from a bugged trainwreck to a fan favorite with its free DLCs.

NFTs are seeing a similar story as dev teams with enough vision, creativity, and integrity take on the technology and turn it into a feature that adds real value to the project. Check out Galaxy Fight Club, for example—the game will allow users to log in with their NFTs from third-party collections and play as them, facing off with other collectors. It’s like playing as Sub-Zero against Superman in Brawl Stars.

Also, it’s important to note that NFTs are not inherently bad for the environment. It is true that the Ethereum blockchain is one of the energy-heavier ones, but not all NFTs run on Ethereum, and Ethereum itself is working to become more eco-friendly. And developers are already working around this problem. They build on better-scaling public blockchains like Polygon, Binance Smart Chain, and WAX, or use their own blockchains, like Axie’s Ronin. So it’s good that not everyone is jumping on the hype train—backlash and criticisms may actually help shape up a healthier approach to implementing such features in games. And there’s another positive to this whole situation too.

The flip side of the token

Even if blockchain adoption proves to be nothing but a passing fad for the gaming industry, it could shake up some of the prevalent business models in the market in a way that would benefit gamers as well.

By design, most NFT-powered games allow players to trade in-game items, from cosmetic upgrades to things like playable characters, between themselves. Mainstream games rarely go for this approach. Cosmetics serve as the lifeline for high-grossing free-to-play titles like Fortnite or League of Legends, and to keep raking in billions, their developers can’t allow players to buy them from anyone but themselves. This isn’t to say players aren’t trying, though, spawning off shadow economies, even though that sometimes gets them banned.

The demand for player-to-player in-game item marketplaces is certainly there, recent polls indicate, and that’s exactly what NFT games can spearhead. They specifically gear their business model to support a bustling player-driven economy, incentivizing participation as opposed to mere consumption. Right now, they are giving this model a live-fire test. Should it prove to be viable in the long-term, more dev teams would look to replicate it. Could these developers opt for one of the more eco-friendly blockchains to avoid the energy consumption problem? Sure, and today’s backlash is a good incentive to do so.

Will gamers love it, though? Well, that’s a whole different question. Axie’s own player base does not seem to hold it in high regard gameplay-wise, focusing on the “earn” part of the play-to-earn. But Axie is special in the sense that it has an upfront cost, as you have to buy or lease Axies to play. Players make an investment, and they look for returns. Things may be very different for a free-to-play game, especially if its gameplay is good enough for the actual “play to have fun” gamers, as Mr. Matsuda would put it.

And that’s the key lesson for the entire industry, and especially its NFT-hungry power players. Build a good game. Use the NFTs in a way that adds to the experience it offers, not as a hype-generating label to mindlessly slap on the product. And, most importantly, make it fun. That’s literally it.

Blockchain and all of its associated functions are an interesting tool, and that’s how game developers should approach it—as means to an end, not as an end in itself. The capabilities it brings to the table could power a variety of interesting gameplay features, and with enough experimentation, gamers could warm up to it, if given enough reason to.