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Video Game Developers Clash With Publishers Over Web3 Integration

2 mins
Updated by Geraint Price
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In Brief

  • Video game developers and publishers are falling out over plans to integrate non-fungible tokens and blockchain technology.
  • An independent group of game developers, artists and staff have drafted a pledge on digital ownership.
  • The prospect of introducing NFTs or a play-to-earn style economy is also disconcerting to developers due to a recent hack of blockchain-based game Axie Infinity for over $620 million.
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Developers of popular video games are conflicting with their publishers over plans to integrate non-fungible tokens (NFTs) and blockchain technology.

Blockchain technology featured prominently at this year’s Game Developers Conference, where companies promoted the prospect of digital ownership of in-game resources with NFTs. For instance, players who bought an item in one game could potentially use it in another game, or later resell it for real-world value.

Supporters of the digital ownership initiative envision players leveraging their inventories of collected merchandise such that they can earn tangible wages from them.

Major studios open to integrating such features include such as Square Enix, known for the Final Fantasy role-playing games, Konami, which developed the Metal Gear series, and Sega, home of video game icon Sonic the Hedgehog. 

However, despite the enthusiasm of these major publishers, many of their developers feel that NFTs constitute exploitation of gamers’ trust, or could create tiered communities that would benefit the wealthiest players.

They have also expressed concern over the risks of crypto scams and cryptocurrencies’ carbon footprint. After backlash from staff publishers, Ubisoft and Team17 were forced to scale back or abandon NFT projects earlier this year.

Digital ownership pledge

In light of the conflicting perspective and interests, an independent group from Minecraft maker Mojang Studios, which includes game developers, artists and staff, have drafted a pledge on digital ownership. 

Signing the pledge would compel publishers to become fully aware of the implications of integrating NFTs and cryptocurrencies into their video games before implementing them.

They must also adhere to ethical considerations, such as eschewing practices that lead to artificial scarcity and speculation, or that disproportionately benefit early adopters or wealthier players. Energy-intensive and volatile cryptocurrencies must also be avoided.

Axie infinity hack

The prospect of introducing NFTs or a play-to-earn style economy is also disconcerting to developers due to a recent hack of blockchain-based game Axie Infinity for over $620 million. By holding players’ money in the form of these NFTs, gaming companies inadvertently also become responsible for their custody.

Maintaining the value of these assets would also become a persistent concern. Since the Axie attack was made public in late March, the value of AXS tokens has slipped almost 40%. Meanwhile, some $5.8 million of the stolen funds have reportedly been recovered.

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Nicholas Pongratz
Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage.
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