Cryptocurrency: Crypto Enthusiasts Meet Their Match: Angry Gamers

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SAN FRANCISCO For years, Christian Lantz played “STALKER,” a first-person shooter video game set in post-apocalyptic Ukraine that has become cult for its immersive role-playing. So when 18-year-old high school student Lantz heard a sequel was coming this year, he knew he had to buy it.

That was until GSC Game World, the Ukrainian company behind the video game, announced last month that the new “STALKER” would incorporate the crypto assets known as non-fungible tokens, or NFTs. In the new game, GSC said, players would be able to buy and sell NFTs of items such as clothing for their in-game characters. The company announced the move as a transformative step toward the virtual world known as metaverse.

Lantz was furious. He joined thousands of fans on Twitter and Reddit who raged against NFTs in the sequel to “STALKERs”. The game maker, they said, was simply looking to squeeze more money from its players. The backlash was so intense that GSC quickly reversed and abandoned its NFT plan.

The studio was abusing its popularity, said Lantz, who lives in Ontario. So it’s obviously done for profit instead of just making a beautiful game.

For more than a year, cryptomania has been at its peak. Cryptocurrencies such as Bitcoin and Ethereum have risen in value. Crypto-based assets such as NFTs have taken off. Jack Dorsey, a founder of Twitter, recently renamed one of his companies Block in honor of blockchain, the distributed ledger system that powers digital currencies. Melania Trump has auctioned off her own NFTs.

But for some, the crypto craze has gone too far, too fast. Skeptics argue that cryptocurrencies and associated assets such as NFTs are digital Ponzi schemes, with prices artificially inflated beyond their true value. Some wonder if cryptocurrencies and blockchain, which are slippery concepts, have long-term utility.

Nowhere has there been more discontent than in the gaming community, where clashes over crypto have increasingly erupted between users and major game studios such as Ubisoft, Square Enix and Zynga. In many encounters, the players have prevailed at least for now.

People are being sold buzzwords, said Mutahar Anas, a gamer and YouTuber with 3 million subscribers. Those pushing NFTs in games, he said, are trying to sell you snake oil.

Over the past few months, at least half a dozen game studios either revealed plans to add NFTs to their games or said they were considering doing so. Digital assets, which are verified by blockchain technology, prove their authenticity and ownership. This provides gamers with unique digital items, game makers said, that can enrich those selling NFTs in online marketplaces. Game publishers have said that NFTs could also be transferred between games in the future, meaning elements from one game franchise could affect the gameplay of another.

But players said they viewed the moves as a blatant cash grab.

I just hate that they keep finding ways to make us nickel and cash any way they can, said Matt Kee, 22, a gamer who got angry on Twitter this month after Square Enix, which produces one of its favorite games, ‘Kingdom Hearts’, said it was pushing into NFTs. I don’t see anywhere how it benefits the player, how it improves the gameplay. It’s always how can I make money from this?

Much of their resentment is rooted in the encroachment of micro-transactions in video games. Over the years, game makers have found more and more ways to take advantage of users by charging them to upgrade characters or improve their level of play in games. Even if people had already paid $60 or more for a game, they were being asked to shell out more money for digital items such as character clothing or weapons.

This led to outbursts of outrage from gamers, which rocked game companies. In December, Sega Sammy, the creator of the “Sonic the Hedgehog” game, expressed reservations about its NFT and crypto plans after backlash from users. Ubisoft, which makes titles such as “Assassins Creed,” said it misjudged customer dissatisfaction after announcing an NFT program last month. A YouTube video about the move was hated by more than 90% of viewers.

Perhaps we underestimated how strong the backlash could have been, said Nicolas Pouard, vice president of Ubisoft who leads the French company’s new blockchain initiative.

Game companies have said their NFT plans are not profit-driven. Instead, they said, NFTs offer fans something fun to collect and a new way for them to earn money by selling the assets.

It’s really all about community, said Matt Wolf, an executive at mobile game maker Zynga who is leading a foray into blockchain games. We believe in giving people the opportunity to play to win money.

The rush to adopt crypto in gaming has accelerated over the past few years. Some developers have started making games on the blockchain, which makes it easy for gamers to collect digital assets and prove they own them. One such game was “CryptoKitties,” a 2017 hit where players collected digital cats, some of which sold for over $100,000. During the pandemic, blockchain-based games such as “Axie Infinity”, where players earn money by earning and selling NFTs, have also become popular.

Bigger game studios are now trying to get in on the action, though some of their crypto plans remain vague.

Ubisoft was the first major game publisher to get into crypto. In December, it announced an initiative known as Ubisoft Quartz, introducing three sets of NFTs in the form of digital gear such as helmets and guns. NFTs were available for free in the “Ghost Recon Breakpoint” shooter for players who reached a certain level in the game. Players, the company said, could keep the items or sell them on third-party marketplaces.

So far, 10,000 digital wallet tools allowing users to store their crypto assets have been connected to the Quartz platform, even though Ubisoft only issued 3,000 NFTs in its first batch, Pouard said. This suggests an appetite for more NFTs in the future, he said.

Ubisoft plans to eventually reduce sales of future NFTs, Pouard added. We’re moving from a game-only business model to an ecosystem-driven business model where every gamer can be a stakeholder, he said.

Zynga, which is set to be acquired by Take-Two, hired games industry veteran Wolf to lead a crypto effort in November. The goal was to create new games on the blockchain, allowing players to easily acquire, own and sell NFTs, Wolf said. He provided some details on how the effort would work, including whether NFTs could be transferred between Zynga games.

Were still developing all that, he says.

Other gaming companies have dabbled in NFTs, echoing how crypto can generate new wealth for users. This month, Yosuke Matsuda, President of Square Enixs, wrote in an open letter that creating blockchain games would allow gamers to make money. It would become a major strategic theme for the company, he said.

But as the number of NFT announcements from game studios piled up, gamers grew increasingly annoyed. After users rebelled against Sega Sammys crypto plans, one of its executives said at a management meeting last month, if this is seen as just making money, I’d like to take the decision not to continue. (The effort continues.)

Other gaming companies have spoken out against crypto. Phil Spencer, head of Microsofts Xbox, told Axios in November that some games centered around making money from NFTs seemed abusive and that he would avoid putting them on the Xbox store. Microsoft declined to comment.

Valve, which owns online game store Steam, updated its rules last fall to ban blockchain games that allow trading cryptocurrencies or NFTs. Valve did not respond to a request for comment.

Tim Sweeney, CEO of Epic Games, creator of the “Fortnite” game, said his company would avoid NFTs in its own games because the industry was riddled with an unsolvable mix of scams. (Epic will still allow developers to sell blockchain games on its online store.)

The blowback has affected more than game studios. Discord, a messaging platform popular with gamers, backtracked in November after users threatened to cancel their paid subscriptions over a crypto initiative. Discord CEO Jason Citron had teased the project on Twitter, sparking the mutiny.

While I’m optimistic that there are a lot of interesting things happening in the blockchain space, there are also a lot of problems, Citron said in an interview.

Kee, the gamer, said he will continue to fight against gaming companies’ crypto efforts. The “STALKER” developers’ about-face on NFTs gave him hope that other companies might be swayed by public opinion, he said.

It gives me a good feeling that everyone is against this, he said. Over the past 10 years, we’ve seen all kinds of these schemes pop up and we’ve had enough.

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