Mar 31, 2022 - Technology

Debate rages over the future of NFTs in gaming

Illustration of a crystal ball with a pixelated coin inside.

Illustration: Allie Carl/Axios

Three NFT video game believers and one skeptic faced off at the Game Developers Conference last week, sharing conflicting takes on the future of the controversial gaming tech.

Why it matters: The abundance of NFT panels at GDC proved that there’s money and interest in the sector but little clarity about where it’s going.

  • Games tied to non-fungible tokens, or NFTs, largely involve experiences in which players are sold the promise of being able to own, re-sell and transfer digital in-game assets they earn through playing the game or simply pay to have.
  • Investment in the sector exceeded $3 billion last year, and large companies such as Ubisoft and Zynga are backing or making NFT-based games, but there have been few hits.
  • The most prominent success story, Axie Infinity, which was paying a living wage to some players in southeast Asia, recently experienced an in-game economic crash.

“I think we have an enormous amount of hype,” Lars Doucet, a game consultant at Level Up Labs and the panel’s designated skeptic, said via video conference.

  • “When I hear things like, ‘Players are really going to get to own things,’ how they own things is kind of left in the air."
  • He held up a pen and rattled off the things he could do with it as an owner, including sell it, destroy it and keep it from other people.
  • Crypto-based ownership of NFTs, he said, tends to support that re-sell idea, but that’s it. “The real ownership of that asset to have it not go away is dependent on a server remaining online forever, a server I don't really control.”

“The transaction ownership part is a huge piece of it for games,” countered Laguna Games developer Katrina Wolfe.

  • She mused that a player could tire of playing an NFT game and sell anything they’d acquired in it.
  • That amount earned could be “more than I started with, maybe it’s less, but that’s more than you ever got out of a free-to-play game.”

“The people that are going to adopt Web 3 games are not gamers,” PKO Investments’ Holly Liu said, referencing the conventional description of “gamer” as people who self-identify as one and who play more hardcore PC and console titles.

  • She identified the current player base as "aunties and uncles" in the Philippines, people playing the games for income.
  • Extrapolating further, she said: “Maybe these new gamers are investors and for them, that’s what ‘fun’ is.”

Panelists agreed on some things:

  • The games need to be fun to maintain a player base.
  • Money in has to exceed money out.

And a terminology note: Doucet and some NFT developers in the audience acknowledged that the phrase “play to earn,” used to promote the promise of blockchain/NFT gaming, is already going out of style in dev circles.

  • In its place: the less-prone-to-overpromising “play and earn.”

Sign up for the new Axios Gaming newsletter here.

Go deeper