A hot potato: Despite the majority of people expressing passionate disgust at the idea of non-fungible tokens appearing in games, more studios are embracing them. The latest is Japanese giant Square Enix, whose president says NFTs, blockchain games, and that other industry hot-button topic, the metaverse, will be a big focus from this year onwards.
Square Enix President Yosuke Matsuda’s New Year's letter begins with a dive into the metaverse, noting that Facebook’s name change to Meta is evidence that the concept is not just a buzzword that will go away. He believes the metaverse will be enabled through advances in extended reality (XR) technology, the increasing prevalence of the cloud and 5G, and more sophisticated blockchain tech.
“The metaverse will likely see a meaningful transition to a business phase in 2022, with a wide range of services appearing on the scene. As this abstract concept begins to take concrete shape in the form of product and service offerings, I am hoping that it will bring about changes that have a more substantial impact on our business as well,” writes Matsuda.
Square Enix’s president thinks 2021 was “NFTs: Year One.” He adds that there were "examples here and there of overheated trading in NFT-based digital goods with somewhat speculative overtones, regardless of the observed value of the content provided," but believes the price of digital items will eventually begin to reflect their “true estimated worth, and I look for them to become as familiar as dealings in physical goods.”
Matsuda notes that blockchain games are “built upon the premise of a token economy and therefore hold the potential to enable self-sustaining game growth.”
“I see the ‘play to earn’ concept that has people so excited as a prime example of this,” he adds, though not many gamers seem particularly excited about the genre, quite the opposite, in fact.
Matsuda admits there have been reservations about these new trends. One argument he put forward for their adoption is that token economies will provide rewards to those who create user-generated content, “thereby resulting not only in greater consistency in their motivation, but also creating a tangible upside to their creative efforts.” He says that being motivated solely by goodwill and volunteer spirit is “one reason that there haven’t been as many major game-changing content that were user generated as one would expect.”
So, in summary, Matsuda says that “incorporating decentralized games into our portfolio in addition to centralized games will be a major strategic theme for us starting in 2022.”
Matsuda’s letter appears to be echoing Ubisoft’s stance in which the company is sticking firmly to its NFT/blockchain plans despite the outcry. There seems to be very, very little of the excitement over play-to-earn games that Matsuda talks about in his letter, and highlighting better incentives for content creators is flimsy reasoning at best. Still, they’re a good money-making scheme for the companies behind them. At least Take-Two's director has made his anti-NFT feelings clear.