How NFTs are creating a generational divide between platforms

Today, let’s talk about a fault line that is starting to open up in the gaming world, one that I think will be coming to most platforms and app stores soon. It’s a divide that starts with a simple question: Will your platform allow NFTs? Cryptographic payments? You know … blockchain stuff?

Like it or not, the rise of non-fungible tokens as a driver of pleasure and profit has been one of the big stories in the tech world in 2021. The use of blockchain to create things Unique digital cards with verifiable and transferable property has opened up new possibilities in art, digital collectible cards and games. At least for now, it seems likely that other forms of media will follow.

Recently, I’ve written about how NFTs challenge the current generation’s assumptions about gaming: making a game from the bottom up rather than the top down, like Project Loot does; or allow players to earn money directly from their gameplay, like Axie Infinity is. Aleksander Larsen, COO of Axie’s parent company, told me he hopes the game hits mobile app stores, including Apple, in the coming months.

But on Friday it became clear that such games will not be welcome everywhere. Here’s Mitchell Clark here at The edge:

Games that use blockchain technology or allow users to trade NFTs or cryptocurrencies will not be allowed on Steam, according to a rule added to Valve’s “What You Should Not Post on Steam” list. Change has been reported by SpacePirate, a developer working on an NFT-based game, who said that the change was due to the company not allowing in-game items that might have real value.

Steam, if you’re not familiar, is the world’s largest distributor of PC gaming software. With over 120 million monthly users, this is the default place for most PC gamers to purchase digital downloads. And last week, as some blockchain-based games started appearing on the platform, Steam pulled the rug out from under them. Parent company Valve has yet to comment beyond its Steam rules update.

The developer of Age of rust, an upcoming adventure game that will award NFTs to players who solve puzzles, was among those whose titles have been removed from the platform. Developer SpacePirate Games lamented the move.

“Steam’s point of view is that items have value and they don’t allow items that may have real value on their platform,” the game’s official account tweeted. “While I respect their choice, I fundamentally believe that NFTs and blockchain games are the future. That’s why I started this journey with all of you.

But when one door to the App Store closes, another opens. The Epic Games Store, a Steam rival that the Fortnite The manufacturer, introduced in 2018, was quick to say it was “open” to considering NFT-based games. Here is Clark again:

When we asked to allow games with NFTs, Epic told us there would be limitations, but they were willing to work with the “early developers” in the “new area”.

Epic says games should comply with financial laws, make it clear how blockchain is used, and have an appropriate age rating. It also states that developers will not be able to use Epic’s payment service to accept crypto; instead, they should use their own payment systems.

One of the reasons it came as a surprise was that a few weeks earlier Epic CEO Tim Sweeney appeared to have completely washed his hands of blockchain. “We do not touch the NFT” he tweeted, “because the whole field is currently entangled in an insoluble mixture of scams, interesting decentralized technology foundations and scams.”

Sweeney is well into the mainstream of technical commentary when he worries that NFTs are a scam. When I wrote on Axis Over the past week many of you shared similar sentiments with me on the Sidechannel Discord server and in your email responses. Aren’t these NFT projects basically pyramid schemes, you ask yourself; Why does all of this have to be on the blockchain? There are other ways to represent digital scarcity beyond blockchain, you told me.

In any case, grind for several hours a day to earn money playing a Pokemon clone hardly sounds like the idea most people have of a good time. If this is a full time job, can you really call it a game?

Despite these objections, development continues. With each day comes a new round of funding announcements for blockchain-based projects, with hundreds of millions of dollars allocated to crypto-focused startups and venture capital funds. The games, which turned out to be one of the first crypto projects to attract a user base that does more than trade money, often feature significantly in these fundraising announcements. (Here’s $ 4.6 million for a company that rents Axis monsters to players in exchange for a slice of their income, for example.)

All of this will soon put the platforms in the same position as Steam. Do we let these things go into the store or not? The easiest thing to do is say ‘no’ – but it creates an opportunity for anyone who is willing to say yes.

Admittedly, the sale of in-game items has a checkered history. Blizzard’s famous dungeon robot Diablo III set up an official in-game auction house a decade ago to allow players to sell swords, armor, and other rare goods that they had won in a virtual battle. These items weren’t unique like NFTs are, but they were rare and had real value. Unfortunately, Blizzard discovered that their auction house had completely broken the game: suddenly people could just pay to win it.

Here is Bo Moore writing in Wired in 2013, when the auction house closed:

Diablo has no more dungeons, no more bosses, etc. Players simply play the same procession of levels at increasingly difficult difficulty levels, collecting loot better and better. In other words, the booty isn’t just a helping hand towards their ultimate goal – better booty. is the ultimate goal. And with the auction house, players discovered that the best way to get it was to just buy it. […]

And the next thing you know, they don’t play the game anymore. Why would they do it, when the reward structure that would otherwise entice them to play was gone? Without the promise of better things Diablo was all stick and no carrot.

Games that develop this “pay-to-win” dynamic are some of the most hated titles – but they are very prevalent. Games that offer free downloads, like many mobile games do, often allow gamers to pay for advantages over their free download rivals, although this makes the experience for most users worse. More respectable games, like Fortnite, only sell cosmetic items. But the pay-to-win economy is real.

Of course, there is no reason why in-game NFTs purchased from third parties should give players in-game advantages. Fortnite the skin created by a popular artist might be of value to both the person who sold it and the one who bought it, and the gameplay balance wouldn’t change at all.

But even for platforms inclined to support blockchain integrations, there are still a number of policy and user experience hurdles to overcome. How and where does the buying and selling take place? Does the platform get a share of the sale? And if NFTs affect the way the game is played, rather than just the way it looks, how does the developer ensure that the game is balanced and accessible to a large number of players?

The questions arise first in the game, but it is easy to imagine that they arise elsewhere in the new economy. And when they do, platforms will be faced with a choice: shut everything down, as Steam did, and bet that all the crypto craze will someday fall into the ocean; or be curious about it, Epic’s way, and see if there’s a way to channel all that developer enthusiasm into something creative and profitable.

It should be noted that most of the big believers in the tech world other big prediction about the future this year – the metaverse – sits firmly on the side of NFT integration. Mark Zuckerberg this summer described to Facebook employees a world in which people would one day rent NFT art as decorations for virtual reality parties. The idea of ​​unique NFT skins in which people can dress up their avatars and transport them from one virtual location to another is the basis of the Metaverse, as Futurists most often describe.

Maybe all of this will fall into the ocean as well. But somehow I think digital scarcity is coming to platforms. And when it does, they will have a lot to rethink. For now, Valve is not losing anything by leaving the NFTs behind. But maybe a day will come when companies like Valve will be left behind and developers like SpacePirate will laugh all the way to the bank.