U.S: Pay-to-Play Game NFTs: Proceed with Caution
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Game developers have been integrating cryptocurrencies more and more and non-fungible tokens (NFTs) within their games in the hope that these digital assets will increase the longevity of their games with an expanded content offering. However, early feedback suggests that these features are at risk of being pushed back by fans, so developers are advised to proceed deliberately. It’s unclear how many fans are against NFTs in the game, but as a recent article from The New York Times makes it clear, the answer is not zero. The article details an 18-year-old gamer’s vehement opposition to recent attempts by Ukrainian developer GSC Game World to introduce NFTs into the game. despite GSC’s hopes for a “transformative step” into the Metaverse.1
For some time now, many game publishers have been selling in-game items such as XP boosters that help players progress quickly through games.two Many players have criticized these microtransactions as nothing more than a “pay to win” scheme.3 Given the similarity of in-game NFTs to these microtransactions, many gamers view NFTs as a scam within a community of bad actors.4
The article echoes reports we’ve seen elsewhere that many fans see in-game NFTs as compromising the core integrity of the game; some even call companies that implement NFTs in the game as “trying to sell [you] snake oil.”5 Our previous blog post detailing Ubisoft’s foray into in-game NFTs at Ghost Recon Breakpoint examined a similar backlash against NFTs from the game’s fanbase. Recently, however, more than half a dozen game studios have either announced plans to integrate NFT or spoken favorably despite negative sentiment from the fan community.6
These negative reactions are similar in many ways to the reaction fans had to microtransactions in the game. But now, many of the biggest games now rely on in-game microtransactions as their main, if not only, source of revenue. Even if a player buys a particular game for full market value, game producers could release a new digital item or other forms of downloadable content for an additional price. Although the content expansion can be criticized as a money grab, eventually many players will pay for it.
We expect the implementation of NFTs in the game to proceed in a similar fashion – there will be roadblocks and growing pains, but they are likely to be here to stay. Despite industry leaders like Sega and Ubisoft acknowledging negative fan reactions to NFTs, the future of video games seems to be heading towards integrating digital assets into the game.
The takeaway for developers here is this: proceed with caution. As we discussed in our Previous post, NFTs within games raise concerns about fraud and liability exposure. Such concerns led Steam will ban NFTs on its platform. Even more concerning is the fact that NFTs may risk turning off long-time gamers and fans. It’s important for developers to remain cautious about legal and business issues as they determine whether and how to integrate NFT into their games. And as always, the Winston Videogames, Esports and Gaming group is here to help!
1 Crypto Enthusiasts Meet Your Match: Angry Gamers, New York Times, https://www.nytimes.com/2022/01/15/technology/cryptocurrency-nft-gamers.html (last accessed Jan 16, 2022).
two NFT Games: Why People Seem to Reject Them Left and Right, TechTimes, https://www.techtimes.com/articles/270187/20220106/gaming-nfts-why-people-hate-them.htm 16, 2022 ).
5 Crypto Enthusiasts Meet Your Match: Angry Gamers, New York Times, https://www.nytimes.com/2022/01/15/technology/cryptocurrency-nft-gamers.html (last accessed Jan 16, 2022).
Winston & Strawn paralegals Wooseok Ki and Blake Pittell also contributed to this blog post.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought according to your specific circumstances.
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