NFTs in video games: harmful technology, speculative bubble, it must all go

A lot has been said about « crypto-currencies » and related technologies, and many have already done so, whether it is about the stability or the centralization of power (on a supposedly « decentralized » technology) of these systems. Also on NFTs to explain how, in general, this technology has no use. So, even if their environmental impact could magically be reduced by some imaginary new method of consensus, there is plenty to question about these technologies.

But let’s focus on the field of video games, which is what we are interested in here. There is a « virtual gold rush » by many video game companies on NFTs. Their announcements about NFTs are often hailed by investors and other « crypto-enthusiasts » who have very little to do with video games (and don’t seem to understand much about them). In video games as in other fields, the only reason people talk about NFTs is not for their intrinsic value, but for their market value. The parallels with the art market and its many, many abuses place this technology in an unfavourable light from the start.

Q: What do NFTs actually bring to games? A: Nothing

To summarise the content of the above links, blockchain and NFTs are technologies looking for problems to solve, rather than solving existing problems. This is a very bad starting point, going completely against the concepts of design and engineering. When all you have is a hammer, everything else looks like a nail.

This situation is all the more obvious and deplorable when the properties so touted by the promoters of NFTs in games are already feasible, and already exist, without blockchain nor NFTs. Unsurprisingly, these uses are already harmful even with « conventional » technologies.

  • Unique objects with various properties? Team Fortress 2 has been doing this for over 10 years, with trading possible within the Steam platform.
  • Items that can be exchanged for real money? Counter-Strike: Global Offensive has proven that this is possible, all while creating a money laundering system in the process.
  • Obtaining items « in exchange » for playing time (play-to-earn)? MMORPGs and gacha games have made this their raison d’être, long before NFTs were even mentioned.
  • Want to sell items? Diablo 3 did it, and since it caused all sorts of problems, Blizzard finally decided to remove this feature.
  • Want to make money by offering a game experience on your favourite platform? Roblox does that without a blockchain either, provided you do’nt mind child exploitation and censorship

It gets even worse: so far, we’ve been talking about NFTs « in theory ». But, in practice, video game companies don’t and never will have any incentive to provide « full » and free-to-use NFTs. For example, the terms of use for Quartz, Ubisoft’s take on NFTs, state that « you may not modify the Visual Representation [of the NFT] in any way […], use the Visual Representation [of the NFT] in videos or any other form of media ». Proof that, whatever the provider may claim, the use of these NFTs is not yours to decide.

As an aside, one may also note this extremely charitable formula: « Ubisoft is not liable to you or to any third party for any claim or damage that may arise from any use of the Tezos blockchain network, payments or transactions you make ». In other words, good luck if anything happens to you because Ubisoft will not help you.

An NFT is a reference to an object that can be used in a closed ecosystem, whose existence and usefulness (and therefore value) remain subordinate to the goodwill of the operator of said ecosystem (the company that publishes the game). For it to be usable anywhere else, it would not only require the agreement of the company publishing the NFT, but also the willingness of another company to integrate it into its games without any notable gain for it.

However, as we know, video game companies are the exact opposite of paragons of virtue or disinterested works; their executives’ pay is convincing enough. Have you complained about lootboxes, games sold piecemeal with dozens of DLC and other season passes? Don’t believe for a moment that these same companies will suddenly be generous on NFTs. They will just explain that you didn’t understand.

Why then is there such a rush to put NFTs in games?

The reasons for integrating this technology are varied, but let’s get the most obvious one out of the way right away: for some time now, there has been a speculative bubble completely unleashed around « blockchain » and NFTs. This is the reason why companies that have nothing to do with this technical field have found themselves boasting about having « their » NFTs, even if it means taking the occasional hit. This is primarily a promotional ploy by companies towards investment funds, a pathetic attempt to lure people who know even less technically than our executives (which is not always easy to find).

The second, more fundamentally vicious reason is a covert financialisation of games. Introducing NFTs into a video game allows monetised exchanges, in crypto-pretend-money, without having to assume the consequences. Indeed, in the event of a transaction problem, error, theft or scam, the video game’s publisher will be able to absolve itself of any responsibility by taking refuge behind the argument « everything is in the blockchain, the code does not lie! » This will in no way prevent these same publishers from promoting this « play-to-earn » model and the murky possibilities of making a financial profit from it.

If they were to assume their role as guarantors of this market, which they are in fact, these publishers would have to offer the same guarantees as banks, such as being able to give you back the money you store within the system, and ensuring the validity and traceability of transactions on their platforms. Surprisingly, companies are not rushing to the door when it comes to putting their responsibility at stake and deploying costly guarantees!

Artificial scarcity, illusory value

This subject of financialisation is crucial. Our daily lives are constantly affected by the impact of markets that are less and less correlated with the real world. Whether it’s the subprime crisis of 2008, the various speculative bubbles (of which crypto-currencies could very well be the next to burst), the lives sacrificed during the COVID-19 pandemic in the name of the sacrosanct economy: the carnage must end, in video games and elsewhere.

It is natural to see the way the economy works, the revolting profits made by the richest while many fall into poverty, and to conclude that there is something wrong with the system. But the answer and the solution is not to say « well, what’s missing is the possibility for me to exploit others too ». The solution is not to reproduce the scarcity of the « real world » in a purely artificial way in our digital spaces, but its exact opposite: to bring abundance for all in our physical societies.

Breaking our (block)chains

NFTs are not just a bad solution to a problem that does not exist and that no one has really raised, they are also another symbol of the harmful functioning of economies so greedy for profits that they seek to monetise the non-existent. Let’s not fall into this trap!

The STJV, one of whose goals is to extract video game production from the infernal capitalist circle in which it finds itself, is therefore opposed to the use of these technologies in video games. Video games should not be casinos that allow studios and publishers to exploit the most fragile and youngest among us. This is a demand that aims to protect our ability to produce quality works, as well as to protect the players who wish to enjoy them.

The STJV nevertheless supports the workers forced by their companies to work on these technologies, or their already existing equivalent such as lootboxes, and will support any struggle to stop their use. You are not responsible for the insatiable financial appetite of your bosses.