NFTs in Games are ‘More Exploitative Than About Entertainment’ Says Microsoft Head of Gaming: Why It Doesn’t Have to Be That Way

"If they share Phil Spencer's reservations of exploitation over entertainment, fair enough — I don't disagree that's present — but why not aid in changing it? Why are the largest in the industry so hesitant to lead from the front?"

I want to start this piece with clarity: Phil Spencer, Head of Gaming at Microsoft in the Xbox division is not against blockchain in gaming per se. Many media outlets have grabbed the snippet that aligns Spencer with Steam but that’s not the case. He is merely cautious, which I would argue is the correct approach.

While Spencer hasn’t discussed blockchain technology in any real depth, he has made a number of reserved comments in an interview with Axios. There are a few flagship quotes I want to highlight for discussion:

  • “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.”

  • “I don’t think it necessitates that every NFT game is exploitive. I just think we’re kind of in that journey of people figuring it out.”

  • “And I can understand that early on you see a lot of things that probably are not things you want to have in your store. I think anything that we looked at in our storefront that we said is exploitive would be something that we would, you know, take action on … We don’t want that kind of content.”

The kneejerk reaction to Spencer’s comments from the crypto community has been hostile in places. While many may say he’s wrong and doesn’t understand blockchain gaming, I’d argue that he’s right to a degree.

Why Phil Spencer Is Right

To say I’m a supporter of blockchain gaming is an understatement; I co-founded Token Gamer in 2018 and I spend hours every day involved in the industry in different capacities. However, given the foetal state blockchain gaming is in, there are a lot of unwanted consequences. They aren’t necessarily a result of how new the technology’s relationship with gaming is, but rather by how much money is floating around it.

This has caused a great number of cash-grabs; NFT and land sales for small fortunes without a solitary second of in-game footage, for instance. It’s a multifaceted problem as a lot of the “playerbase” of these games is centered around making money, not playing the game merely for enjoyment. This creates a vicious cycle of supply and demand without much substance in the middle. But, there are certainly cases in which a brilliant concept is used to sell NFTs for a game that may never truly materialize.

The Play to Earn (P2E) movement is important to blockchain gaming, but how it will feature going forward is currently unknowable. As Spencer says, we’re on a journey where people are figuring it out. I can also appreciate that you are not going to want any of the odor from rug-pulls and cash-grabs anywhere near your legitimate storefront. Nevertheless, what I don’t want is key figures in the game industry, like Spencer, to shirk responsibility for wrangling the juvenile beast of blockchain gaming; they stand to gain the most from its success.

A brilliant example of blockchain gaming done right, Lost Relics.

How the Phil Spencers Can Help Correct the Problem

The state of blockchain gaming is a little confusing. On the one hand, we have almost exclusively indie developers creating games that utilize blockchain technology. Many of those have highly experienced developers and artists from major studios, but they have broken away to form their own, indie studio. Then, studies show that 58% of game developers are already using blockchain. The truth is likely to be closer to indie developers forging the way for at least the next few years.

There is a reticence towards blockchain when it comes to many of the large studios and this isn’t without fair cause. Yes, it’s new and unchartered territory in places, but the greatest deterrent may well be that they would have to develop a lot of infrastructures themselves. The on-ramp for crypto is still not at the level it needs to be, varying from “my Mum could probably figure this out eventually” through to “my Mum would lose every penny in 30 seconds flat.” (My mother’s inexperience with technology is a recognized benchmark I’ll have you know.)

I do appreciate these difficulties when it comes to large corporations with lots of moving parts and boardrooms to appease, but then I also want to shake them. Not necessarily you, Phil, but the developers that are waiting in the wings until indie devs have completed the heavy lifting. Where is the passion for innovation from the titans? Microsoft and Xbox could pivot from weariness (however reasonable) to action; how can a large and important company in gaming affect positive change in a young and growing sector of the industry?

Indie developers are making bales upon bales of hay and I believe they will continue to, but the EAs and the Ubisofts of the world are going to get seas of hay once blockchain is better established, whether there’s sunshine or not. They ought to be leading the charge, and while their comments of positivity are valuable, I would prefer they are backed by action. If they share Phil Spencer’s reservations of exploitation over entertainment, fair enough — I don’t disagree that’s present — but why not aid in changing it? Why are the largest in the industry so hesitant to lead from the front?

Age of Rust, the game publicly axed from Steam as part of their wholesale NFT cull.

Final Thoughts: Blockchain Gaming Isn’t Just P2E

I’m going to risk upsetting my old professors by stepping away from the “tell them what you’re going to tell them, tell them, tell them what you told them” structure. I want to end on an often overlooked note when it comes to blockchain gaming and that is, blockchain gaming isn’t just Play to Earn.

The value of blockchain is far-reaching, with true ownership of items, eSports memorabilia, and stronger community input just a few benefits. Player-driven economies and their fruits are a boon, but that isn’t all blockchain brings to the table. Developers must remember the rich vein of utility hiding beneath the glistening gold.

Lead image by the blowup via Unsplash

Robert Baggs
Robert Baggs
Full-time professional crypto writer and Editor of Token Gamer. Co-host of the Mint One Podcast. Obsessed with MMOs. London based. Primary holdings: WAXP, ENJ, & BTC. Secondary holdings: ETH, GALA, & MATIC

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