Last week, Steam announced it is banning all games that include NFTs or crypto from its platform. In response, Epic Games announced that NFTs are welcome in its games. In a further development, blockchain games company Animoca Brands just announced a $65M investment from new partners Ubisoft and others. So, why the different directions from these major players?
Why it matters
In a word, GameFi. During lockdown, some people discovered they could make real world money with P2E (play to earn) and by trading gaming NFTs. Now, as in the financial world, the big traditional gaming companies need decide whether to get into crypto.
- GameFi uses NFTs and crypto to combine game play with money making tools from DeFi.
- There is potentially a LOT of money to be made, which can be distributed between the games makers and for the first time, the players themselves.
- The games companies will all need to decide where they stand, or they could see their userbase bleed away.
The case to ban NFTs
- Senior people in the financial services industry say that NFTs have no inherent value and that the bubble will pop, leaving investors with nothing.
- DeFi is getting a lot of attention from financial regulators. With the potentially huge numbers of players that could jump on board, it’s certain that blockchain games will get their attention too. Do games studios want to be regulated like banks?
- Unlike most gaming rewards, NFTs and crypto in games can be taken out of the game and sold. If not properly managed, this could result in cannibalization of the in-game economy, ruining the experience.
The case to welcome NFTs
- It’s clear that NFTs of avatars, equipment, and other subjects will be a big part of gaming so it makes sense to include them. Axie Infinity NFTs achieved $2.5B in trading volume in Q3 2021. Epic’s Tim Sweeney said on Twitter “we welcome innovation in the areas of technology and finance.”
- If GameFi really does take off, then games not including it are likely to lose out to those that do.
- This could be the beginning of something much bigger. Gaming could start a new wave of wealth redistribution. Animoca’s Yat Siu said “Animoca Brands will continue to advance blockchain in gaming — and beyond — to introduce billions of gamers and Internet users to true digital ownership.”
Expect more announcements from the other big companies as they take a stand, or just play for time while they figure it out. New start-ups will appear to take advantage of the opportunities. Will Steam change their mind?