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Ubisoft's NFTs are a new shade of beige | This Week in Business

After four years of research, the publisher's first step into blockchain gaming is underwhelming, to say the least

This Week in Business is our weekly recap column, a collection of stats and quotes from recent stories presented with a dash of opinion (sometimes more than a dash) and intended to shed light on various trends. Check back every Friday for a new entry.

It looks like the rubber is hitting the road when it comes to blockchain gaming as this week marked a few more companies jumping on the bandwagon, along with the first actual implementation of it from Ubisoft, who was into blockchain gaming way back before it was uncool.

I kid, I kid. It was always uncool.

QUOTE | "Each Digit will also be tied to the player names of all its previous and current owners... bringing you fame for years to come!" - In trying to come up with a reason to care about its new Ubisoft Quartz NFT program other than simply trying to make some money on a Ponzi scheme before the bottom falls out, Ubisoft redefines the word "fame" to mean "Your user name will be stored in a list of people who were sad/greedy enough to buy Wolf Enhanced Pants with a tiny serial number to make them different from any other sucker's Wolf Enhanced Pants, even though it's unclear where people will go to view this list, or why they would ever care enough to look."

Ubisoft's NFT strategy is pants

Ubisoft's NFT strategy is pants

STAT | 24-to-1 | The ratio of "Dislikes" to "Likes" for Ubisoft's announcement video for Quartz on YouTube, as reported by Kotaku. The evening after it was posted, the video was disliked by 24,000 users and liked by 1,000.

STAT | ??? - The amount of cryptocurrency and other assets Ubisoft executives hold on the Tezos blockchain, which they chose to use for Ubisoft Quartz. We have asked the publisher if it will be disclosing that information, but it hasn't gotten back to us.

At least Zynga has been relatively open about its blockchain inspirations being driven by executives and directors with such a detailed history of personal interest and professional investment in blockchain so it's easy for investors to see if their decision-making for the company could be affected by a desire to pump up the value of their personal assets rather than any kind of belief that getting involved in blockchain is the best thing for investors.

Regardless, after more than four years of research around blockchain gaming, one would hope Ubisoft would have come up with a better demonstration of why anyone should care about it. Beyond being attached to a critically panned game, the Ghost Recon NFT integration is uninspired to say the least. It's a serial number on in-game equipment that will be functionally invisible to people playing, something that in no way requires blockchain technology.

As far as innovations go, this is as dull as it gets. It's a way to do something differently but with no actual advantage to the user. It's insisting on proprietary memory cards when SD cards and SSDs would do, an option to preorder downloadable content, a new shade of beige.

It's also the only practical way to implement blockchain technology in games, siloed off in a single company's ecosystem, a centralized implementation of technology for decentralization. Ubisoft's NFTs are only available in a handful of countries. They are only traded on two authorized third-party platforms: Rarible and Objkt. If you get banned from Ghost Recon, Ubisoft can keep you from acquiring these NFTs.

In short, the only supposed advantage of the blockchain -- control and ownership outside of the company's grasp -- doesn't exist here. Because game publishers are fanatical about control (and not without reason), especially in the era of games-as-a-service.

And the only alternative to Ubisoft's way of approaching blockchain gaming is to go to the other end of the spectrum, promising that it will be super awesome and empowering and magical and not saying a thing about how you're actually supposed to implement it. Like Kickstarter.

QUOTE | "Since everyone is invited to help contribute to the protocol and participate in the ecosystem, a wider array of good ideas will surface about how to transform crowdfunding for the better. As a result, more creative projects will ultimately find the tools and resources they need." -Kickstarter in its announcement that it's going to be moving its platform to the blockchain for... reasons.

This is a classic example of the "We can't wait to see what developers do with it" red flag. While that line is rarely applied to actually significant innovations -- the iPhone strikes me as one -- it's more often applied to things that seem kinda neat but the company responsible for the thing has no compelling use case for it. Think the Wii U Game Pad, Nintendo's Quality of Life sensor, the gameplay potential of the 3DS' 3D effect, and even some things that weren't made by Nintendo. (Kinect is a big one.)

Interestingly, this seems to be exactly the sort of shiny-but-empty innovation Ubisoft loves. It pushed Zombi U for Wii U and it used Ghost Recon to showcase the future of core gaming with the Kinect Gunsmith mode. That last one let you use motion controls to customize your gun as a clumsier and less reliable substitute for picking options from a menu with a controller, so it's actually just like its blockchain approach. Or it would be if the motion control fad of a decade ago also hastened the destruction of the planet. (And don't talk to me about proof-of-stake; you can't feed the blockchain fad without feeding proof-of-work chains, Bitcoin, and Ethereum more generally. Kill the one and then we can talk about the other.)

So strip away the benefits of blockchain tech to actual players and the only benefit left is the potential for some people to make money. Ubisoft is giving its first waves of NFTs out for free, and has said it won't take transaction fees as people sell and re-sell those amongst each other. However, that could always change, as the Terms of Use explicitly state it may do so in the future.

QUOTE | "Ubisoft Quartz is an experiment, it is possible that it evolves as it develops and our Terms of Use are written to reflect that. As announced, at launch and for the foreseeable future, all Digits will be free for players to claim on Ubisoft Quartz and Ubisoft will not take any fee on the secondary market." - An Ubisoft representative explaining the apparent contradiction between what it was saying publicly and the fine print on the Quartz website.

And of course, the users might get something out of it too if they can find a taker for their Wolf Enhanced Pants. But that's really the only segment of the player base calling for NFTs in games: people who want to make money off the thing. People have been turning their gaming into revenue streams since they got online, from gold farmers in Ultima Online to shady Animal Crossing hackers that will let you scavenge their island full of recipes and rare items for a few bucks.

However, there are two key differences between the NFT thing and those kind of entrepreneurial efforts. First, there was demand for their services because they offered players something they wanted for gameplay reasons instead of speculative ones. Second, companies did their best to crackdown on these secondary markets because they hurt the experience for everyone else. With NFTs, publishers are forced to choose between tying the in-game perks to something useful and desirable -- which will create ill will and resentment from those who don't want to partake in them -- and creating something so minimally interesting that the only people interested in acquiring them will be speculators more than players.

And that can work in the short term. There's enough NFT hype these days that I'm sure Ghost Recon Breakpoint is getting an influx of players who care more about free NFTs of pants than anything else the game has to offer. But with nothing of actual worth or utility attached to it, the entire NFT fad is predicated on there always being more people getting into the market to keep demand and prices for the NFTs increasing. In the longer term, it's doesn't appear sustainable, and given how deeply unpopular NFTs are with a certain portion of the playerbase -- you can check the comments on the Quartz YouTube video response for evidence -- the damage to the company's reputation, the game's reputation, and the in-game economy for those who aren't partaking of NFTs would all seem to outweigh the benefits.

The rest of the week in review

QUOTE | "Just as last year highlighted the industry's shortcomings when it comes to diversity, inclusivity, accessibility and more, 2021 has also felt like a tough year for many. But it's important to view these issues not from a place of despair, but one of hope, determination and belief that the industry can be better." - Our editor-in-chief James Batchelor, in a post kicking off our year-end Game Changers project recognizing people working to make the industry a better place.

QUOTE | "...DEI work is a journey of constant improvement, some of which can be exhausting and relentless..." - In thanking her colleagues on diversity, equity, and inclusion councils at Bungie and Harebrained Schemes, JC Lau, gets at one of the reasons our 2021 Game Changers and so many others need support from the broader industry.

QUOTE | "What I think we missed, though, is the employee experience through that. I don't think we always communicated enough back to the people who had raised an issue in the first place about what we found as part of the investigations: the decisions that we made and the actions that we took. And so I think, unfortunately, people lost trust in that process." - Ubisoft chief people officer Anika Grant acknowledges the publisher made mistakes in not communicating outcomes of sexual harassment investigations to the people who reported them.

QUOTE | "I think our focus really is moving forward." - Ubisoft chief people officer suggests the company has no intention of correcting the mistakes it has already made but you should really trust it not to repeat them going forward.

STAT | At least $100 million - The amount of money Activision Blizzard should put in a victims compensation fund, one of three demands from the attorney of a current Blizzard employee who says over the past four years she has been repeatedly subjected to sexual harassment and retaliated against for reporting it.

QUOTE | "Even if they were concerned about Blizzard's competitiveness, at some point you need to stop joking around: we generate billions in revenue between Activision, Blizzard and King, with huge margins, so what was the point of doing a PSE during an economic and health crisis which would lead to people being jobless and struggling to find work? Why not wait? They wouldn't let go of it. I think it was just an excuse as they wouldn't be noticed in the middle of all the other companies who were laying staff off at that time." - A former Activision Blizzard Versailles employee among those accusing the publisher of violating French labor laws when it closed the studio last year.

QUOTE | "We are converting approximately 500 temporary workers to full-time employees in the coming months. Unfortunately, as part of this change, we also have notified 20 temporary workers across studios that their contracts would not be extended." - In response to a walkout over recent layoffs at Raven Software, Activision Blizzard explains that employee rights are a zero-sum game. If some people are going to insist on being treated well, others must be treated worse to balance things out. That's just science.

STAT | $2.2 billion - Activision Blizzard's net profits last year, a new record for the company. That was followed up by celebratory layoffs (in multiple waves), in keeping with the company's tradition.

QUOTE | "With the power of Professionals Australia behind us, we'll be able to do so much more -- take legal action to defend our members against underpayments, discrimination and bullying, organise collective agreements at workplaces, and lobby governments and industry on an equal playing field with studio owners and publishers." - Game Workers Unite Australia announces that it will join Professionals Australia and reorganize as a formal union next year called Game Workers Australia.

QUOTE | "Game creators need to be supported by the companies that employ them… We should not -- and will not -- tolerate any abuse, harassment, and predatory practices by anyone, including our online communities… Tonight, I call on everyone to do their part to build a better, safer video game industry." - The Game Awards host Geoff Keighley, several minutes before turning the show over to a trailer for the next game from Quantic Dream, which in 2018 was the subject of three media reports detailing allegations of homophobia, racism, and a toxic studio culture at the company. After responding to the reports with a statement apparently plagiarized from one Naughty Dog released several months before, Quantic Dream sued two of the press outlets for libel, winning one of the cases.

Oh, and if you're wondering why Keighley didn't name any names, it's worth noting that The Game Awards advisory board has the president of Activision, the co-founder of Riot Games, the CEO of Ubisoft, and Rockstar Games on it. Also, all of those executives are in the exact same roles as they were when those reports came out, so clearly we've got different ideas about what "not tolerating" these things means.

QUOTE | "Apple has demonstrated, at minimum, that its appeal raises serious questions on the merits of the district court's determination" - A panel of circuit court judges, in granting Apple's motion to postpone a ruling requiring it to allow apps to link out to external sites where users can purchase content without going through the App Store. The original ruling in the Epic v. Apple case gave a December 9 deadline for Apple to allow that, but now it won't need to take action until the appeals process is concluded, a process that Epic said could take years.

STAT | $10 million - The fine the reported leader of hacking group Team Xecuter will have to pay for hacking Nintendo consoles and selling circumvention devices that allow people to play pirated games on them.

STAT | ???? - The fine Amazon will presumably have to pay for selling a tremendous variety of R4 and 500-in-1 3DS cartridges. (You'd think a legal team so dogged about shutting down fan remakes of games would be on top of one of the largest retailers in the world flagrantly violating IP rights but I guess not.)

QUOTE | "...the court had suspended proceedings concerning the motion to dismiss due to the parties having entered into negotiations concerning a potential settlement." - CD Projekt announces that it is settling a lawsuit with investors who claimed the company lied about the "virtually unplayable" state of Cyberpunk 2077 before its notoriously buggy launch last year. Basically, CD Projekt is going to wind up giving more compensation to the people who already own it than it will to the customers it actually misled.

STAT | 8 - The number of BioWare studios in existence 10 years ago this month as the studio announced its new Command & Conquer title. BioWare only had two studios just two and a half years earlier. Today it's back down to those original two studios as every other office was shut down or merged into other EA divisions.

STAT | $105.4 million - The amount of money GameStop lost in Q3, a modest improvement from the $111 million it lost in Q2. GameStop could lose money at that rate for almost four years before it burned through the $1.68 billion it raised from creating and selling shares after January's wild short squeeze share jump.

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