Written by Bonk
- Rug pull projects like Pixelmon are exploiting speculative investors, further exacerbating the negative notion of NFTs.
- P2E games making hundreds of thousands in NFT sales without a viable product naturally sheds doubt within the gaming community.
- Blockchain game developers should prioritize creating games that are actually fun to play to create a community of loyal gamers instead of investors.
Pixelmon Giving NFTs a Bad Name
At this point in time, everybody must have heard of Pixelmon. If not, just imagine another crypto project that underdelivered, but this time graphically. The reveal was so disastrous, the whole crypto community had to know about it.
Pixelmon promised its users to create "the largest and highest quality game the NFT space has ever seen," yet after raising $70 million, the game effectively gained the status of a rug pull. The developers allegedly spent 400 ETH from the raised funds to go on a buying spree, purchasing high-valued NFTs from collections like BAYC, CloneX, and Azuki.
Some claim that the NFT mania is to blame. The demand for NFTs to flip them for profit is skyrocketing; exploiting the market sentiment has now become the new norm. This behavior is causing a whole new vector of criticism towards NFTs, especially in the gaming sector.
Gamers Just Want To Game
Since Axie made its name during the pandemic, Play-to-Earn has been on a steady rise. Yet, there hasn’t been much of a breakthrough in terms of mainstream adoption. Ubisoft tried to sell in-game items on Rarible just to be ridiculed, while major game developers like EA and Square Enix also faced strong opposition from the gaming community after showing interest in NFTs.
P2E gaming is appealing as it rewards gamers with tradable in-game items. Gamers can cash out, migrate to other games, or even build their own game with earned NFTs. The idea is appealing, but without actual use cases that can capture the gaming community’s attention, it’s all talk and no game.
"Many put the notion of earning money in front of the other elements of gameplay, which simply isn’t as attractive to gamers as it is to profiteers," says Derek Lau, the game director for Guild of Guardians. He claims that P2E can be an "attractive prospect," yet warns that it also "tends to attract opportunists and profiteers instead of a passionate and loyal fanbase."
The implementation of NFTs to create a profitable gaming experience is skewing the purpose of gaming itself. Lau claims that the top blockchain games by user base are overrun by "an army of bots programmed solely to manipulate the system and extract value from it," adding that "users should be attracted to a title for its core mechanics first and only then become enchanted by the possibilities of true asset ownership or revenue generation."
Community Not Convinced
Phantom Galaxies, Big Time, Imperium Empires, Star Atlas, and Illuvium are under development, but the crypto community is already betting big bucks on these yet-to-be released games. They look promising, and the developers are taking their time. However, the issue is not limited to the gameplay of P2E games. Tokenomics can become a serious challenge when it comes to in-game economics.
The prevalence of private sales for in-game items can discourage latecomers. Pre-sales imply a smaller pool of remaining rewards, whose value might be diminished. And the problem doesn’t end there. Early investors can make huge profits without any game interaction, further exacerbating the problem.
Developers for many "AAA P2E games" claim their focus is on the gaming experience. But the underlying assumption that P2E games are cash grabs, or worse, scams, cannot be eradicated once players see huge sales for games that are not even released.
The market cap for Illuvium peaked at $1.2 billion in December 2021. Big Time’s NFTs are selling for thousands of dollars. Metaverse games like The Sandbox and NFT Worlds’ token and NFT sales are also in the tens of thousands in terms of trading volume. The speculative nature obviously creates doubt, especially in an industry where consumers are infamous for their dedication and strong opposition to monetization.
Can Devs Do Something?
Even when there are promising prospects in the game, NFT sales only stir the pot. Will P2E gaming prevail? It’s hard to predict, but strong fundamentals will work miracles. The recent hit, Elden Ring, developed by FromSoftware, simply followed one formula: be fun. Despite the frame drop issues on its PC version, Elden Ring garnered critical acclaim to be one of the highest rated games on Metacritic.
Is it possible for P2E gaming to create their own Elden Ring? Or will Elden Ring bring NFTs to their game? Either way, there is only one way to make P2E work. But will the gaming community accept NFTs after all? Therein lies the ultimate question.