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:
おはようございます, クリスさん.
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.
i
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.
ii
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.
iii
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.
Conclusion
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.
Both the video and your response have given me a lot of food for thought.
The video is a rejection of the current narrative surrounding NFTs and P2E as the future of games, from someone that knows the industry inside and out. On this, I have a lot of sympathy, seeing a lot of the rhetoric surrounding music & blockchain and questionable basis that a lot of funding has been raised.
I think there are three key areas that he draws attention to that are worth highlighting:
Business model - The narrative around NFTs is essentially one that moves revenue generation away from platforms & publishers and instead to NFT creators and users. Taking the functional challenges to one side, which Christopher explains in great detail in the video, there is a fundamental problem in that the proposed route forwards would significantly reduce a platform’s ability to make money. From a business incentives point of view, this seems illogical as a direction for publishers to move themselves towards. A counter to this could be that it’ll happen anyway and publishers need to adapt, with a likely move being moving down-the-chain into the NFT sales function.
Impact on the industry - However, if publishers are forced to move in that way then it changes what they are. Instead of competing around making the best games, they are competing around making the most effective NFTs. This feels like significant regression for the entire industry, and is likely the reason for such an impassioned response from the game dev community around this growing narrative. Put simply, the Games industry has been through a golden era, resulting in it being the most valuable entertainment sector in the world, and ultimately, many incredible games. A lot of people read NFTs as a threat to that.
Longer term impact on the quality - Reduced/changed business model for publishers, and a refocus on direction for investment and development, will lead to a strategic shift away from quality of games. Unlike other industries, the Games industry has a lot of historical examples of these impacts. “Free to Play” brought with it a model of shipping sub par products, often still in a relatively beta state, with pay-to-play mechanics designed to improve the product for users. This has improved over time, which is evidence towards NFTs not being a complete fool’s errand, but it is understandably a cause for concern. Real Money Transactions (RMT) have also caused great issues in the gaming community. Taking WoW for example, the current instances of WoW Classic are basically a lost cause where going on the black market and paying $/£ for resources is an expectation to compete at any reasonable level. This is an entire economy that the publisher is not part of, which reduces the enjoyment of the game for everyone, with no discernible advantage in terms of investment in the underlying game. Those not engaged within the black market economy, out of principal, or because they can’t afford to, are at a huge disadvantage to those that are. And players that do pay for RMTs are essentially engaged in a competition of who can spend the most money. Neither is good for the game.
The above is really just focussed on the NFT commentary, though there are elements of P2E within the RMT aspects. P2E looks in its current form like putting turbochargers on the farming bot mechanics that have plagued gaming economies since the the old Runescape days. It’s completely understandable that any game dev looking at this narrative will be thinking “what the fuck, no”.
I’m not sure about the “pro gaming” comparison. The best competitive games do a good job of balancing their buff/nerf iterations so that they reach an intended outcome across all levels of play. Furthermore, I’d argue that the professional gaming scene has developed to be a significant net benefit for the wider community, through bringing in investment, raising awareness, and giving career opportunities to players who are good enough. This is a world away from P2E grinders that are selling resources to richer players that can’t be arsed to do it themselves, causing inflation in the overall economy and resulting in RMT as a requirement to play.
With that all said, I completely agree that it is important to base all of this within the overall context of where development of blockchain x entertainment is, and how much further it has to go. The ridiculous valuations around projects right now are an understandable distraction, and the ponzi-grift elements don’t help. But every new thing needs to have time to find its role, as long as that doesn’t cause long term damage.