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Baseless NFT hype hits a crescendo - but play-to-earn is worth watching | Opinion

As top execs pay lip service to blockchain buzzwords, it's the future visions they boost by association that are of real interest

Hype comes in waves and cycles, and we appear to be at the crescendo of one cycle of hype for blockchain technology and NFTs at the moment, which essentially means that it's silly season.

Every day seems to bring a new daft proposal for how NFTs will revolutionise gaming, almost inevitably published in a more low-brow business or financial site whose writers' grasp of how both technology generally and video games specifically actually work is tenuous at best. Games and technology publications are more circumspect and rightfully dubious in their coverage of this vastly hyped but extremely poorly detailed self-styled revolution ( even has a stated policy of rejecting NFT-related pitches), but sometimes the hype is impossible to ignore entirely -- such as when top industry executives decide to pay a bit of strategic lip service to the buzzword of the moment.

As we're in the throes of financial results season, there's been a fair bit of that this week. Take Two's Strauss Zelnick is keen on the ideas of NFTs, or some other mechanism, to make digital collectible goods a reality; EA's Andrew Wilson went much further down the rabbit hole, describing NFTs as being the "future of our industry". Like other publishers, most notably Ubisoft, EA seems to be hiring people with blockchain experience; between that and the positive statements they're making at the moment, it's understandable that the oddball collection of cynical grifters and starry-eyed fantasists who make up the NFT hype bandwagon are being driven into a frenzy right now.

The reality is that you don't need NFTs or blockchain technologies to implement any of the systems needed to enable play-to-earn

Step back for a moment. Neither EA nor Take Two have announced anything at all based on NFTs or blockchain, with both Wilson and Zelnick being careful to hedge their statements, pointing out that NFTs are just one possible technology that could achieve the kinds of things they have in mind, and that it's all very far down the line. Ubisoft is doing some kind of low-budget football card thing with blockchain, so it's a bit more concrete, but still very much a throwaway experiment rather than a significant strategic move.

What's actually happening here is very obvious, once you strip away the hype -- senior company executives are carefully name-dropping a technology buzzword that many investors are extremely excited about. They're pushing a small amount of money -- far less than the blockchain name-drop adds to their company's market cap, no doubt -- at some blue-sky R&D just for the sake of being able to say they're keeping up with this trend, and they're couching every syllable of lip service in a little ambiguity and plausible deniability.

Do these executives actually know what NFTs are, how they work, and how fundamentally useless to video games they are? I suspect they do actually, at least in terms of the high level concepts. They also know, however, that many investors who have been sold on the blockchain dream (as distinct from the blockchain reality, which is a very smart idea that is very useful for solving an extremely limited set of problems, none of which apply to video games) don't understand the technology at all, viewing it simply as a panacea that will bring other impossible technological dreams to life, or as a dimly defined signifier of The Future.

This is a nice thing if you're an executive with a specific idea about how you want to develop the video games market, because you can just talk about the thing you're excited about and bolt the term "NFT" to it, making it automatically more interesting to investors. Hence, in the middle of some vague handwaving about the future, both Wilson and Ubisoft's Guillemot attached NFTs to the notion of "play-to-earn" as an important emerging business model. Zelnick, more circumspect, pinned the concept instead to digital collectible items.

In truth, NFTs don't really have much to do with either of those things. It's eminently possible that play-to-earn models will play a major role in the industry's future, but there are enormous hurdles to overcome first -- not least of all legal and regulatory hurdles -- and the reality is that you don't need NFTs or blockchain technologies to implement any of the systems needed to enable play-to-earn.

Most of the visions for games NFT fans push forward can be accomplished without the technology. Image by A M Hasan Nasim from Pixabay

In fact, the proof-of-concept for play-to-earn far predates the notion of cryptocurrency or NFTs; it was apparent that there was a potential market for this kind of approach the moment the first MMORPG player handed over real money for farmed gold or a boosted run through a dungeon. Most developers eventually moved from trying to crack down on gold farmers to just selling gold directly to players; play-to-earn would potentially reintroduce the artificial scarcity of in-game currency and powerful items or characters, and let the developer take a cut when players sell them to one another. (Yes, I'd rather sit through an Uwe Boll movie marathon than play a game actually designed on those principles, as I'm sure many of you reading would -- the point remains that there's a market for it, even if you and I probably aren't in it.)

Does anyone seriously think EA, Ubisoft and Take Two would have the slightest interest in blockchain if it meant giving up control of their own marketplaces and digital items?

None of the ideas hyped by NFT grifters -- persistent in-game objects that can't be altered or destroyed, greater player agency over their digital possessions, and so on -- are remotely required for this to work. It doesn't help that, as has been pointed out many times before, they're all total nonsense from a technological standpoint; an NFT just contains a pointer to the database entry that actually defines some in-game object, currency, or character, and the developers still control the actual database. Play-to-earn will happen on the developers' terms, not in some anarchic crypto-market outside publishers' control; does anyone seriously think the bosses of EA, Ubisoft and Take Two would have the slightest interest in blockchain if it actually meant giving up control of their own games' marketplaces and digital items? If throwing around the buzzword of the moment makes investors all the more excited about the play-to-earn models these companies have been ruminating over for years, though, so much the better for their share prices.

The real hurdle standing in the way of both play-to-earn and any of the other ideas put forward by NFT proponents -- none of which actually require NFTs or especially benefit from their inclusion -- is not technical. It's not even really a design problem, although some of the notions ("take your NFT sword from one game and use it in a totally different game!") are fully in the realm of the blabbering of an excitable 12 year old who just ate way too much Halloween candy while watching Ready Player One, and the more manageable ideas are often undercut by the more practical problem that most players will hate them. No, the real hurdle is the legal one -- the simple fact that the moment players are able to earn items with real monetary value in a video game, you fall into as many different legal quagmires as there are different legal jurisdictions around the world.

Video games have, bluntly, protected themselves for years from harsh regulations through a simple argument -- they can't possibly be covered by gambling laws, because even if you can pump money into this slot machine (be it loot boxes, gacha mechanics, or in-game currency purchases), you can't get money back out of it. The argument hasn't always convinced regulators and legislators entirely, but it's more or less been a success -- and it's a protective shield that evaporates entirely the moment your game starts to trumpet the fact that its in-game items have a real monetary value, even in a cryptocurrency.

There may even be jurisdictions where pay-to-earn is going to run into some major problems with taxation and employment law, as the whole concept runs headlong into legislative efforts to curtail the casualisation of employment by firms like Uber. All of those are real, thorny problems that play-to-earn will have to overcome before it can be a major part of the industry's future; none of them will be solved by blockchain, and some of them might even be exacerbated by its inclusion.

Ultimately, the fact that CEOs are name-dropping buzzwords in the middle of results season shouldn't fool anyone into getting hyped for NFTs and gaming; there are other motives and incentives in play here, and the actual technical and design case for NFTs in games remains non-existent. How publishers start to sketch out the edges of the play-to-earn future they're so keen to embrace is a genuinely interesting story that will be worth watching very carefully in the coming years; the role of NFTs in this early chapter of the story is at best a side distraction, and at worst a scam.

We've probably got a few more waves of this hype to get through, unfortunately -- too many people have convinced themselves that they're going to get rich by doing nothing for this to simply die down quietly -- but in the meanwhile, we'd all be better served by watching closely the trends to which executives attach the blockchain buzzwords, rather than the blockchain efforts themselves.

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Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.