Tuesday, November 9, 2021

Welcome To Your Future - NFTs, Play To Earn And Robot Dogs.

I can't turn around right now for news items about frickin' cryptocurrencies, blockchain and NFTs. What I know about all of them together could comfortably be etched onto the eyeball of a gnat with an industrial mining laser, which is, conicidentally, one of the three standard means of production for NFTs. 

Well, it might as well be. Who knows how the damn things work? I read Tipa's recents posts on NFTs with some interest, not least because so far she's been one of the very few people I've seen who've been able both to explain the concepts behind the processes and the reasons why anyone might be persuaded to care about them. 

I also read Rob Fahey's excellent article at Gamesindustry.biz, linked yesterday by Wilhelm in a post about EVE, whose comment thread I hijacked on the back of it. The article, which I recommend for anyone who, like me, couldn't quite figure out what all this had to do with the future of video-gaming, has the classy title "Baseless NFT hype hits a crescendo - but play-to-earn is worth watching.", which just about sums it up.

It would be nice to pretend we can all just sit back, munch popcorn and enjoy the show but unfortunately I don't think that's going to be an option for much longer. Sure, we're none of us going to get sucked into the Ponzi schemes, wild punts and outright scams that are currently hyping up the media from niche to mainstream but neither are we going to be able to pretend big changes won't be coming to the games we play. Big changes that will affect us whether we choose to participate or not.  

As a growing number of formerly infatuated, not to say assimilated fans seem belatedly to have realized, video game companies are not our friends. They never were. 

It's nice to pretend otherwise, of course. I do it all the time. We play favorites and profess brand loyalty and that's fine so long as everyone knows it's all just make-believe. Any game company would sell your loyalty for a dime on the dollar if they thought they'd get away with it so it's probably best not to give it them in the first place. 

These past couple of years we've seen Blizzard, for so long one of the industry's most loved and respected developers, locked in a flaming death spiral that just seems to get worse and worse. If it can happen to them, it can happen to anyone.

No-one, I'm sure, is the least surprised to hear the widely-reviled Electronic Arts making sweeping statements about embracing NFTs and blockchain as "the future of our industry". Ubisoft aren't many peoples' idea of a fuzzy, warm BFF either, so it's not too much of a shock to learn they also rate these new, invasive technologies as crucial to the development of video games.

It's not just the usual suspects, either. It's the supposed good guys. How about Discord, everyone's go-to for teamwork, chatter and all-round fun times? As the title and strapline of the NME news report I just read a couple of hours ago put it, "Discord community boycotts platform over “disappointing” crypto integration. Users are cancelling their Discord Nitro subscriptions to protest potential NFT and cryptocurrency integration."

What is Discord doing that's got Reddit all riled up? (Admittedly not a difficult thing to do.) Testing integration of the platform with cryptocurrency and blockchain functionality, that's what. And surveying users on their familiarity with NFTs. Doing due dilligence and getting ready for the future, in other words. 

Yeah, but that's just Discord. We were already beginning to fall out of love with them anyway. 

Okay, sure. That's true. How about Square Enix, then? Everyone loves SE, right? We can trust the company that gave us the game everyone says World of Warcraft needs to learn humility and compassion from, surely?

Can we, though? Can we? Here's the NME again: "Square Enix looks to be going all in on NFT-based games." And why wouldn't they? As the article explains, the company's first experiment with the concept was a sell-out success.  

Square aren't messing about, either. Following that proof of concept they intend to "transition to [a] full commercialisation phase" that will "focus on blockchain games premised on token economics as a form of decentralised content.

The NME article links to an official SE report, the Financial Results Briefing Session Six‐Month Period Ended September 30, 2021. I think it's a powerpoint presentation or something along those lines because it looks like a bunch of slides. I'd reproduce some of them here only I'm a little unsure of the copyright situation and, y'know, Square.

I would strongly suggest clicking through the link and reading the thing anyway. It only takes a few minutes. If anything, I'd say the NME article underplays the intensity of Square's burgeoning commitment to bringing all things NFT and blockchain into our lives. We're going to love it, apparently, because we've already demonstrated with our wallets that it's what we want. 

And who knows? Maybe it is. I've lived long enough to be able to give you a top ten of technologies I thought I neither needed nor wanted but ended up not knowing how I could have lived without. Perhaps the self-satisfied glow of being able to "point" to an intangible asset that I don't really own but for which I paid money is going to keep me warm at night although I remain to be convinced.

More likely, I suspect, we're all going to get to share in a degraded, not to say degrading experience as "content" most of us neither want nor understand gets awkwardly bolted on to the games we already play and built in by default to those we're going to play next. 

Yes, we'll probably be able to opt out of spending money on any of this but whether we'll be able to opt out of the gameplay implications I'm not so sure. I don't know about anyone else but the up-and-coming industry buzzword "Play to Earn" does not fill with me with joy and delight. I play to play, y'know and I'd kind of like to keep it that way, even if that does mean leaving (imaginary) money on the (virtual) table.

Ah, but that's the key, isn't it? The money's not imiginary, not any more. It would be bad enough if all this was going to happen inside the games but there's every sign the damage is going to spread to our real lives as well. Proving I do indeed get all my news from the same silo, here's NME one last time: "NFT owners in the US to start paying taxes on their investments".

Buried super-deep in the guts of the apparently unrelated H.R.3684 - Infrastructure Investment and Jobs Act you'll find "Section 80603, “Information reporting for brokers and digital assets.” Yes, I did go digging for it. It was not fun but I am not so besotted with the NME as to take their financial reportage at face value. Here's a gloss on what it means, also not a light read. 

To save you the trouble, the two key sentences seem to be a definition "The Notice defines convertible virtual currency as virtual currency which has an equivalent value in real currency or acts as a substitute for real currency" and a statement "A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property." Seems clear enough. 

Once President Biden signs off on the bill those regulations will come into force for tax returns due to be filed after December 31, 2023. They're not kidding about that "Play to Earn" thing, are they? Just wait until the tax inspector takes a look at the API for the dollar value of crap you threw onto your bank mules. That's literally a thing you can do in Guild Wars 2 already, you know, which is why I haven't given the game those permissions.

Maybe this is all just one of those periodic media flaps we'll laugh about in years to come, like the Y2K bug or the Sinclair C5. Or maybe this is the leading edge of the dark stormfront heralding the coming of the Age of the Megacorps. 

I know! Let's have a funny video of a cute robot dog called Spot. That'll cheer us up.

That's not scary at all, is it? And I'm sure you couldn't put a gun on the front of it. I mean, corporations and governments always have our best interests at heart, right? They'd never say one thing and do another. If they say they're going to help us have fun, make money and stay safe, I'm sure that's exactly what's going to happen. Everything's going to be fine.

And I didn't even mention the Metaverse!


  1. I was going to divert into that bit about the tax reporting requirement in my Monday post, but I figured I was already three paragraphs into NFTs, which were not really the topic at hand, so I let that go.

    I also put that Jim Sterling gets mad about NFTs video in the comments wherein he does indeed get very angry.

    Finally, I don't think NFTs are, strictly speaking, a Ponzi scheme. Also known as pyramid schemes or multi-level marketing ventures, those have a specific format. NFTs are more of a straight up "pump and dump" where hype and pricing manipulation over-values an asset until somebody not in the know buys it, then the seller takes the money and runs before the buyer realizes that their bored ape or whatever isn't really worth several thousand dollars.

    1. I'd forgotten about the million dollar website. I like Alex Tew's quote at the end of the wikipedia page, when he talks about all the other people who tried to cash in on his idea: "any copy-cat sites will only have pure comedy value". That sounds quite prophetic for NFTs. I suspect a lot of people are going to look pretty foolish around those.

      It's the "Play to Earn" thing that worries me. It's all very well people selling stuff from games in some grey market outside the game, which as Tipa pointed out is as old as online gaming itself, but when the game-makers decide they want their cut and design for it in the gameplay I somehow feel it's not going to go well for any of us.

  2. NFTs are dead simple to understand.

    In the primitive stone age world, you would give someone money, and in return, they would provide you with a product or service, and issue you a receipt for your payment.

    In the modern NFT world, you give someone money, and in return, they issue you a receipt (the "NFT") for your payment.


    1. Sort of... the NFT is a digital "certificate of ownership". It can be either full ownership, or a limited set of rights (e.g. you now 'own' this meme-worthy image, but don't have permission to ask for royalties from people who use it to make memes). The devil is in the detail - some NFTs can be as valuable as the deed to your house, others are more like those "you now own one square foot of land on the Moon" certificates.

    2. I think an NFT has to be more than just a certificate of ownership, doesn't it? Legal ownership of the copyright to a digital image could presumably be proved before NFTs existed and can still be proved without them now. That would make an NFT at best no more than an additional proof, it's advantage being a higher level of security from being copied or stolen. Useful but hardly sufficient to cause the current frenzy of excitement.

      It was very clear from Tipa's posts that the NFTs she purchased through various online games didn't come with any of those ownership rights at all and yet they are still sold as "NFTs". If an NFT can change hands without the media or reprocuction rights passing from the seller to the buyer, what exactly have you bought? Even in the example of the land on the moon you usually would get a fancy printed certificate you could frame and hang on your wall as a talking point. Do you even get one of those with an NFT?

  3. There's a reason I keep glancing up and going "oh." and then going back to tweeting about cartoons of the 90s and video games.

    1. Even the robot dog doesn't appeal, then?

    2. I've always found those robot dogs kind of cute. My partner thinks I'm crazy, they freak her out.

    3. Afraid not. I'm in the camp that predicts doom from those things. Or perpetuated upon it.


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