Is GameFi just an NFT Minting Factory?

Recent comments on the AngryJoeShow about Sony’s new NFT patent have spurred renewed anger towards GameFi and NFTs after Angry Joe explicitly stated “We’re not going to turn gaming into an NFT manufacturing facility.”

The comments, while harsh, do come from a place of genuine concern for most gamers. The concept of NFTs in video games comes off as unnecessary looking like nothing more than an additional vehicle for microtransactions. 

Although many NFT enthusiasts believe that Gamefi is the future of video games, they shouldn’t blow off concerns from gamers like Dr Disrespect did when he called gamers “brain dead headlines followers” in a recent tweet about his upcoming game Deadrop. 

Instead, web3 game developers need to take a much closer look at what web2 gamers are complaining about because an NFT manufacturing facility won’t be appealing to anyone in web3 or web2. So, what is the correct balance?

Is play-to-earn a factory?

First, we need to unpack what Angry Joe means by NFT manufacturing facility because it is a strong argument that needs to be considered by game developers. The idea is that while playing a game, gamers will have opportunities to mint NFTs directly from the game through progress advancements, challenges, trials, dungeon crawling, etc. 

Although this sounds straightforward, it’s a game loop that can pose problems in the future because it removes emphasis on player immersion. Switching a player's goal from plot progression, character development, and roleplaying to a more monetary-based goal removes a lot of the entertainment that gamers enjoy and replaces it with a system that encourages grinding and repetitive radiant quests that can ruin any RPG.  

Furthermore, NFT items that are highly overpowered and aid players immensely over non-blockchain-based items could pose a serious imbalance to the game’s difficulty which is often abused to encourage gamers to pay more. 

Resale: utility vs value

A primary concern about NFTs in video games is the value of the item versus the time that it took to earn it. In a lot of games such as FIFA and Madden, earning some of the most valuable in-game items takes a massive amount of time; or, the item can simply be bought. 

Obviously, the amount of time that it would take to earn an item worth $100,000 as Dr Disrespect postulated would not be small. In fact, anyone would expect the amount of grinding to achieve that unique item to be quite high. 

Of course, this leads to a situation where many games will begin using GameFi not to enjoy video games, but rather as a full-time job where they spend all their time earning assets that are highly volatile and subject to scams/cheaters. 

Other applications: In-game licensing, insurance, memberships

However, there are other aspects of a game that can be placed onto a blockchain without sacrificing entertainment value. The team behind EVE Online recently announced that they had received major funding to develop a new triple-A title from a16z that involves blockchain technology.  

Though the announcement covered little about what to expect in the game, it can be assumed that they will provide unique financial services to accompany vehicles and accessories similar to EVE Online which has been criticized for adding too many microtransactions. 

While the EVE example may not be the most appealing (and it shouldn’t be), the ability to incorporate financial services into video games could find proper application in guilds and parties where communities are highly important. This could aid in the governance of the guild, rewards for helping the guild, and more without subjecting players to ugly grinds. 

Potential in E-sports

One of the best implementations of NFTs in video games comes from E-sports where gameplay is expected to be more repetitive. Adding NFTs to a game and turning them into tournament prizes and rewards adds a unique benefit to E-sports gaming that has never existed before. 

Currently, in most MOBAs (multiplayer online battle arenas), tournament victors receive a cash prize and can influence new skins for players to purchase, but this does little for the champions who deserve their own unique prize the same way that NBA players receive rings and poker players receive bracelets. 

Will Legends of Mara Lead the Way?

A major issue is that not many enjoyable blockchain-based games even exist yet. So far, everything said has been speculation with a few failures from Ubisoft and Axie: Infinity leading the way. 

Fortunately, Yuga Labs has remained committed to their interest in GameFi through their own metaverse called the Otherside; and they’ve just announced a new upcoming game called Legends of Mara that is causing hype in the BAYC. 

The game appears to be taking a heavy-handed approach to fantasy that is more related to the World of Warcraft than the actual Bored Ape Yacht Club artwork, but this could be a good thing considering a high-quality game requires structured universes and lore that the BAYC image might not be fully capable of supporting on its own.  

Nonetheless, and not to be drastic, the future of GameFi rests in Yuga Labs’ hands whether they know it or not. Currently, everyone in the gaming world hates NFTs and if Yuga Labs fails to provide an experience that is more than an NFT manufacturing facility then Gamefi might fail to ever take off.