It is safe to say that the hype and enthusiasm behind NFTs has definitely disappeared over the last few months. NFTs, or Non-Fungible Tokens, were seen as a huge part of the shift towards the metaverse, leveraging blockchain technology to create a potentially new form of artwork. Similarly to the current Cryptocurrency collapse, NFTs are also seeing a huge downturn in popularity and value.
At its peak, NFTs were selling at astronomical figures. There were, however, a number of warning signs that suggested the hype surrounding NFTs was misguided and misinformed. One prime example of this is the potential collaboration between NFTs and the gaming industry. The connection fans have with game franchises should align well with the virtual art forms of NFTs. However, the truth is that a number of game companies have fiercely rejected any semblance of a connection.
Minecraft creator Mojang, owned by Microsoft, recently released a statement decrying NFTs and stating that NFTs conflict with “the spirit of Minecraft”. Microsoft provided further clarity around their rationale for rejecting NFTs, stating that they are “concerned that some third-party NFTs may not be reliable and may end up costing players who buy them… There have also been instances where NFTs were sold at artificially or fraudulently inflated prices.”
Meanwhile, Sony was quick to clarify that their new digital rewards platform announced for subscribers would ‘definitely not’ contain NFTs. Steam, the most popular PC game marketplace, has banned NFTs from its platform. But not everyone is quick to distance themselves from NFTs, with the CEO of Fortnite creator Epic Games, Tim Sweeney, highlighting that they will not look to ban NFTs, and are waiting to see what happens with the market before making any decisions.
French video game company Ubisoft is one of the biggest game companies that looked to move into the NFT space, despite backlash from gamers. Ubisoft, makers of popular game franchises Assassins Creed and Far Cry among others, saw NFTs as a way to sell in-game collectibles. Calling these NFTs “Digitals”, Ubisoft stated that “Digits are collectible in-game vehicles, weapons, and pieces of equipment that offer players unprecedented ways to connect with and enjoy more value from the games they love.”
The move looked to position these kinds of collectibles in a new way. Potentially recognising the continual dissatisfaction gamers felt from game manufacturers offering new aesthetic in-game changes for a cost, Ubisoft looked to reward gamers for playing their games. Rewards like new armour and weapons could be achieved through completing large parts of games, with the reward also being created as an NFT.
This play to earn approach differed from the traditional approach of pay to win that many gaming companies have become known for, particularly the likes of EA. This approach was designed to prevent potential NFT prospectors from quickly accessing a broad collection with minimal work.
Despite this strategy to reward people for playing the game, the perception from gamers was that this is an unwanted part of the games they love. Nicolas Pouard, Ubisoft Strategic Innovations Lab VP, said in an interview with Finder that the reason for this rejection was “for now, because of the current situation and context of NFTs, gamers really believe it’s first destroying the planet, and second just a tool for speculation.”
It is hard to deny the environmental impacts of NFTs. The production required to maintain the blockchain technology that NFTs are supposed to be built on is highly energy intensive. Blockchain and cryptocurrencies that require this level of energy often generate excess carbon. This has become a growing concern for people who have begun exploring the crypto space.
Despite being the most likely realm for collaboration and connection, the gaming industry’s denial of NFTs has helped to highlight the limited value many see NFTs offer. With the market value of NFTs decimated, and value perception limited, NFTs as we know them are unlikely to capture consumer attention like they did previously. Gamer culture’s quick and sometimes hostile refusal was an indication of the troubles ahead. This does not mean that NFTs are going to disappear, but they will need to change and a shift to a more realistic value state.