Week in Review - Gamers aren't warming up to NFTs

Saturday, January 15, 2022 • By Lucas Matney

Hello friends, and welcome back to Week in Review!

Last week, we talked about the public relations nightmare that Apple is sitting on with the AirTag. This week, we’re talking about consumer backlash to NFTs and how gamers are dealing with the inevitability of market-pegged in-game economies.

If someone forwarded you this message, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.

the big thing

If you’ve been a semi-regular reader of this newsletter, you’ve seen me spill plenty of ink on NFTs over the past year. The crypto collectibles are spoken about in near religious terms among techies in Silicon Valley, but it’s also grown clear that there is a pretty substantial disconnect between venture capitalist excitement and user sentiment, many of whom absolutely despise NFTs and all they stand for.

Observe any vaguely consumer company communicating their cursory interest in NFT technology and you’ll see an outpouring of social media disgust. NFT pilots from tech companies like Discord and Mozilla have been shelved because of user backlash from people who see digital scarcity as a wholly unnecessary invention that brings the worst of capitalism to the free web.

It’s particularly interesting for Discord, which has found itself becoming a central pillar in the web3/NFT trader/enthusiast toolkit, while serving a broader user base for gamers — which at least partially seem to NFTs as a further realization of the monetization nightmare that micro-transactions have inflicted on gaming titles.

This week, a post in the extremely popular r/gaming subreddit received tens of thousands of upvotes and thousands of comments. Its title, “Can we agree right now to boycott any game that incorporates NFTs for any reason, including cosmetics?” seemed to capture the growing distrust that NFTs have earned among a class of gamers more focused on gameplay rather than replicating the power structures of global capitalism inside every MMO.

“Preying on gaming addiction with digital scarcity or gambling addiction with a ‘greater fool’ model of investment is not the future I want for gaming in any way,” the body of the post by u/Kordaal read. “We (collectively) fucked up by accepting microtransactions. We cannot accept NFTs which are an order of magnitude worse.”

NFTs have so far seen very little uptake in mainstream titles, largely because platform owners don’t seem to be very jazzed about them, something proponents say is due to their disruptive potential to existing business models. Valve’s Steam store has banned PC gaming titles that integrate NFTs, and it goes without saying that mobile app stores feel the same way. The future on consoles doesn’t look much brighter.

“What I’d say today on NFT, all up, is I think there’s a lot of speculation and experimentation that’s happening, and that some of the creative that I see today feels more exploitive than about entertainment,” Xbox’s Phil Spencer told Axios in November.

For the time being that leaves PC gaming accessed outside Steam and web apps on mobile and desktop. That’s still a substantial market, but one less accessible to the majority of gamers today. Major publishers like Ubisoft have already expressed interest in NFTs and larger players are already selling digital items based on market rates, which operate almost identically to NFT markets, so there’s certainly a distinct feeling of inevitability among plenty of gamers who worry that titles are headed toward a future that’s focused much more on market speculation than experience.

Image Credits: 10'000 Hours / Getty Images

The Pros and Cons of Building or Buying Embedded Analytics

other things

Here are a few stories this week I think you should take a closer look at:

North Korea hacked $400 million in crypto last year
Crypto hasn’t seized on most of its early promises quite yet, but it’s impossible to say that its seedier promises haven’t been realized. So much wealth moving online into digital currencies has led to a renaissance of theft for cyber criminals. This week, my colleague Kate Park wrote about how North Korea-backed state hackers managed to steal more than $400 million in digital assets, according to crypto firm Chainalysis.

Wordle rules
Rampant tech investment has led to the monetization of pretty much anything that has eyeballs on it, something that made the surge in popularity for the new word game Wordle, which has no ads, no logins and no platform, a refreshing tale. My colleagues Ingrid and Amanda profiled the game’s creator and dug into the ethos of the fun and simple word game.

Apple to allow third-party payment processing in South Korea
As Apple battles a stateside push to force the App Store to embrace alternative payment methods, regulation in South Korea has already pushed the $3 trillion tech giant to take action. This week, Apple announced it had submitted its plan to comply with national laws there and allow for third-party payment processing.

Image Credits: Bryce Durbin/TechCrunch

added things

Some of my favorite reads from our TechCrunch+ subscription service this week:

The SPAC boom was a failure
“…SPACs did manage to get a number of startups and unicorns public more quickly than they might have managed on their own. But the results are proving to be pure trash so frequently once the hype has died down and real, post-debut life begins that I would hazard that we've collected enough data to call the SPAC boom a failure…”

5 essential factors for attracting angel investment
“…To attract the right angel investor, make sure to present a compelling technology or product offering that solves a critical customer problem. Be sure to showcase your unique competitive advantage — an incremental improvement over the competition is not a winning formula for attracting investment…“

3 views on CES 2022
“…In the wake of an event whose attendance fell around 75% from two years prior, my best advice to startups is this: Use CES as an opportunity to rethink your news cycle. This event is designed to front-load the year with news – hardware companies announcing all of the products they're readying for the next six to 12 months. Marrying yourself to such a cycle is a recipe for getting lost in the scrum among announcements from far larger companies with far bigger megaphones…”