CRYPTOCURRENCY and NFTs are becoming ever more mainstream, but gamers are pushing back against what they see as the new name for microtransactions.
The online-only coins or items are supposed to offer a sense of security away from the unstable nature of centralised banks.
However, what we have seen is instability everywhere. FTX, the second largest crypto exchange, recently crashed, wiping out $30billion with it.
Big-name developers such as Square Enix and Ubisoft seem hell-bent on incorporating NFTs into games, but have seen little success.
To find out the issues of incorporating the two different technologies, we sat down with the deputy head of commercial litigation and dispute resolution at London law firm Saunders Law, Will Charlesworth, to talk about the challenges.
His title might be long, but what it basically boils down to is that Charlesworth is a lawyer who deals in NFT cases.
There are advantages for companies, he says: “NFTs can offer considerable advantages to brands, to establish a commercial presence”.
However, what it all seems to boil down to, as it always does with business, is money, and developing new ways to make it.
Charlesworth shifted to NFT-related law in 2017, which is recent for most types of law, but ancient in terms of cryptocurrency.
Protections need to be put in place to prevent disruption, from the people winning and losing in the market.
Charlesworth shared his concerns about companies like Ubisoft, that have failed to implement NFTs in games like Ghost Recon.
He explained: “There are definitely challenges to overcome and it has to be more than NFTs for NFTs sake.
“It has to be something that adds real value, and compliments and adds value to the gaming space. They need to move away from being a hype investment and a passing fad.”
Gamers see this trend as just that. When someone can create value with Sims furniture, why would they move to the blockchain.
He continues: “It’s a challenging sell to push NFTs at the moment.
“The example of Ghost Recon in particular shows that gamers are wise to this, and the hype around NFTs I don’t think translates into the world of gaming necessarily.”
There are also technological hurdles to overcome, Charlesworth explains: “Trying to get NFTs and technology that works outside a gaming environment, that is truly decentralised, to be able to work on different platforms all at once is truly a unicorn.
“That’s just incredibly difficult. I can also see a headache in terms of licensing for use across multiple platforms.”
We have seen gaming companies gain trust in gamers, despite them taking risks on new technology.
While Stadia was not a crypto asset, when Google refunded all its users there was faith restored in the company.
Charlesworth admits offering refunds “could be a selling point for the company”, but he doesn’t see many following suit.
He thinks crypto and gaming is at a crossroads until one thing gives.
He says: “Unless gamers are willing to accept [that their NFT dies with the game] then I think that’s always going to be an issue.
“But then if they do accept it, there isn’t an advantage over having an NFT [rather than an in-game item] in that space.
“I think we’re a little bit away from working out how it could actually work.”
Things are changing in the UK, the courts have determined that crypto assets are a form of property and therefore protected under consumer rights.
This doesn’t mean you are protected. As Charlesworth explains: “It always comes down to the terms and conditions on whether you would get compensation.”
The consumer rights issue does pose a significant problem, when it comes to selling NFTs on a global scale. Companies have to alter their games in order to adhere to local law.
He said: “When a UK consumer acquires an NFT in a game they do acquire consumer rights, and those rights apply whether or not the seller resides in the UK.
“You have to be fully informed as to exactly where you are directing your sales.
“And they can’t rely on obscure terms and conditions in order to protect themselves.”
So are NFTs the future of gaming? Charlesworth thinks: “I don’t want to be quoted as saying ‘no’ because, at some point in the future, something might happen.
“The problems to be overcome with NFTs and gaming are the cultural side where people don’t want to add another layer of microtransactions in games, and that the blockchain is not completely compatible with games.
“Blockchains are decentralised, games are centralised.”
Written by Georgina Young on behalf of GLHF.
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