Game studio backtracks on NFTs after backlash

The developers of upcoming first-person shooter S.T.A.L.K.E.R. 2 said on Twitter last night that they are canceling "anything NFT-related" for their game.

Why it matters: It was the first prominent NFT backtrack from a gaming company.

Catch up quick: On Wednesday, Ukrainian development studio GSC Game World boasted in a press release of being "the first AAA game to allow the community to own a piece of the action." It would offer this through the implementation of NFTs.

• Its initial plan: sell NFTs, or non-fungible tokens, that would grant the owner the opportunity to have their face put on a character in the game.
• Backlash ensued online, from players and observers objecting to NFTs (critics of NFTs in the traditional gaming community decry them as wasteful scams, say they don’t improve games and drive speculation untethered to real value).
• On Thursday afternoon, GSC issued a lengthy statement saying the NFT efforts around S.T.A.L.K.E.R. 2 would help fund the game and wouldn’t affect gameplay.
• But within hours, GSC deleted that statement and tweeted a new one, canceling its NFT plans. That tweet has been "liked" more than 112,000 times.

Between the lines: The NFT gaming sector has seen more than $2 billion in investment this year, largely given to startups and upstarts looking to build a presence in the gaming industry.

• That has spurred establishment players to also tease or roll out NFT gaming plans, arguing that they’ll usher in a new age of players profiting from the games they play.
• Most of those big players are publicly traded mega-publishers, some of which are balancing internal backlash with presumed shareholder enthusiasm.

• GSC has been around since the 1990s but is a smaller video game company and is self-publishing S.T.A.L.K.E.R. 2. In its reversal, GSC indicated it was reacting to fan pressure: "We hear you," the studio wrote. "If you care, we care too."

What’s next: GSC’s about-face may influence other midsize game companies’ decisions to explore NFTs, as they weigh backlash against potential profit.

• Also relevant is larger publisher Ubisoft’s ongoing roll-out of free, cosmetic-only NFTs for its Ghost Recon Breakpoint game.
• Those NFTs have been snatched up by players but are attracting only rock-bottom offers on crypto marketplaces. It's early, but that suggests an initial lack of demand — at least for NFTs that aren’t tied to any in-game play-to-earn system.