NFTs are a pure scam
A response to Christopher Natsuume
I was sent this video by Christopher Natsuume, Co-Founder & Creative Director of Boomzap Entertainment today.
Christopher has been making games for nearly 30 years and this video, recorded 3 weeks ago, is an impassioned critique of NFTs and what he sees as the degradation of the gaming industry through the monetisation of fun. It’s worth watching in full. After reviewing the comments, I decided it was worth responding to provide an alternative view.
This turned into a long response which I felt was a good outline of my current thinking on the broad critique of NFTs and, refreshingly, it focused on a use case outside of PFP, Art, and Music NFTs.
Importantly, I didn’t address his points about interoperability and incompatibility of on-chain assets and focused on the validity of his outrage and what I feel is the mischaracterisation of NFTs as a scam.
Republishing here in full with minor edits:
Your video has helped me reconsider some of my own ideas about the value of NFTs as a technology and the impact blockchains will have on society over the long term. I'm responding not to discredit your points, but because I hope to provide a fourth viewpoint alongside the three you listed towards the end. I've been in the space since the beginning so I've had some time to consider these ideas.
I can't help but feel this is likely an overreaction in the long-term because (i) NFTs can only support markets for trade in goods where there is demand, (ii) NFT gamers are very unlikely to cannibalise the gamers you want to design games for, (iii) and wage-earning is already a valid component of the gaming industry.
Said another way, no one is being coerced into playing-to-earn and NFTs will only attract those who want them, many of whom probably weren't gamers before. So, beyond a few novel ideas that enhance the fun in gameplay for some types of games, I'd presume you can safely ignore blockchain, NFT, and P2E gamers and you'll likely enjoy a growing audience for the rest of your career.
Your points, especially those concerning the exploitative relationship the emerging NFT space is developing with P2E players from developing nations, are valid. As a counter, black markets have long existed in the gaming industry and their effects are reasonably well documented (e.g. in 2018 documentary, Play Money) where there are many outfits in developing nations employing people to grind, mine, and craft in in-game economies in exchange for cash from western customers. It seems disingenuous to credit this to NFTs alone.
We live in a market economy so we should expect markets to emerge wherever there is something people are willing to trade—time-money exchanges being at the core of all markets. We can then expect it will be worth someone's while to make those markets more efficient. If I can't sell it to you as an NFT (efficiency), I can still sell you the login details to my account (market). Who's evil here? The buyer? The seller? The intermediary? The technology that facilitates the trade? Does that include money? Though I understand it may not be an ideal outcome as a designer, I do struggle to see genuine evil here.
The market, and even the Axie team, recognises that the current (ponzi-y) model will eventually run out of steam if the team can't find a reason for players to continue play beyond earning a wage, given wages come from new players entering the game. They continue to iterate to that end. If they can't find a solution, they'll die and players will move elsewhere. Other teams will continue riffing on these ideas until someone manages to build a game people love playing in spite of the potential to earn (and then, of course, we'll be inundated with clones).
Judging a technology (which is effectively just a pointer with some logic running on a blockchain network) based on the initial prototypes deployed in its infancy certainly seems hasty.
Secondly, NFT gamers ≠ Mobile gamers ≠ Console gamers ≠ PC gamers—these groups can almost be considered mutually exclusive.
NFT gamers aren't your target market and, quite clearly, shouldn't be, but they're unlikely to cannibalise the fun-seeking players you care about. The gaming industry looks set to gain a lot of new players over the coming years as it has thanks to mobile games.
I assume that the hysteria around NFTs will die down once game designers, publishers, and players realise where NFTs can enhance the fun for a player and where they can't. I don't expect all games to have NFTs unless it improves the game for the player in some way. Fun-seekers players won't grind for cash alone and wage-seeking players won't grind only to make gameplay more enjoyable. Wage-seeking players may find themselves unable to sustain a wage unless there's a healthy contingent of fun-seeking players, so game designers will have to find ways to balance the two groups so they can coexist—as we've seen in MMOs and free-to-play games.
By way of comparison, if you have a problem with this new category of wage-seeking players, then surely you have a problem with professional gamers who do the same. They don't play for fun but for a wage and, ostensibly, for sport. Their value as players and the amount of time they can invest in the game, which can only be funded by pre-existing wealth, heavily impacts the gaming experience for fun-seeking players who play for leisure—often to their detriment. Esports has glorified this category of player and game designers and publishers actively consider the needs of this group when adding, modifying, or deleting characters, game items, maps, and gameplay. By this same token (pun unintended), should you not also decry esports? Why are sport wage-earners different from grinding wage-earners? Neither play the game for fun, both play it for a living.
Now, you could counter that some of today's NFT games are ponzis because you're paid to play the game and only get your wage from selling your assets to new gamers. And new gamers, who also want to play so they can make a wage, do the same—with no value produced in the process, whereas esports players get their wage from entertaining and attracting other gamers to the game. If we characterise Axie players, instead, as customer acquisition spend, where players are, like esports players, being compensated for playing the game and attracting new players, could you then class their labour as productive? If the person you employed to do brick-moving on your lawn helped attract people to your new brick business, how would that impact your view of the work?
As there are more and more activities to occupy our time, attention is fast becoming the primary plane of competition so, over time, we're likely to see an increasing number of market participants (game publishers, music services, subscription services, retailers, etc.) paying directly for attention. Most already do this indirectly through discounts, free trials, and loyalty schemes. I like to think that attention has always been "tokenised", it's just traditionally been captured by private equity and restricted to accredited investors. This is neither good nor bad, just a reality of the market.
I recognise that crypto is currently full of scams and ponzis, but I actually think that's by design. What's painful to watch is people iterate on the customer acquisition loop, without spending any time on the product itself. We seem to have discovered a powerful new tool that leverages markets to get people in the door, but not really figured out what to sell to them when they come in. Hence, the grift economy that seems to be developing in realtime everywhere we look and the unsavoury experience that follows the average person's first brush with its various applications. It's a sorry state of affairs but I'm confident that it's not the complete picture here—more an awkward phase than a complete failure.
I also recognise I haven't addressed all of your points but I do not expect to change your mind, just to present an alternative view of what, I think, is an important technology.