In a previous blog post, we wrote about some big failures in instances where gaming companies, boy bands and even social platforms tried unsuccessfully to get their users to support their new directions in NFT ventures.
Of course, the examples we shared actually had very little to do with hatred towards NFTs from fans, but were merely representations of what not to do to alienate or anger your fan base or userbase – who, these days, are a lot more intelligent than most company owners realise.
The other important thing we would like to point out here is that just because many big name companies and brands are pivoting to blockchain and/or NFTs, it doesn’t mean that all of them are doing it to jump on the gravy train, not at all. In fact, in the examples we showed, we explained the failures as a consequence of adopting a new business model or direction that had nothing to do with your company’s ideals, or nothing to do with solving a problem for users.
But in other cases, some big companies in the gaming industry are looking keenly at blockchain (and NFTs) and they have compelling arguments to make their case to their investors. So in this article, we take a look at just some of these big gaming companies going into blockchain and NFTs, and why they’re making the move.
GameStop
Everyone will remember the Gamestop fiasco last year, which rode very much on the back of crypto’s own strong rally from the end of 2020 as markets shrugged off pandemic effects and showed its love for crypto.
Gamestop never fully recovered from the damage, however, and the company has had to undergo a serious shakeup of its core video game business, including recruiting two top executives in mid-2021. Noting that it already had a good niche business in reselling collectibles, they even launched an NFT portal in May 2021 called the GameStop NFT Marketplace, with a whitelist process for Ethereum addresses still there today on a call for “NFT creators.
While nothing much happened since, except the recruitment of a “Head of Web3 gaming”, this month, according to a leak, they went ahead and employed over 20 new staff members to run a new NFT division to develop the NFT marketplace and establish crypto partnerships.
Although the company has been very secretive about it, this development follows many past indications for the gaming company to make inroads into emerging technology like blockchain. Its CEO Matt Furlong had also spoken about this long-term positioning “to build what will ultimately become a much larger business”.
Electronic Arts (EA)
Remember when we spoke about the possibilities for NFTs to change the way traditional gaming handles collectibles and even used an example for EA’s FIFA franchise? Well, this year, EA CEO Andrew Wilson actually spoke about this very idea in his earnings call, as reported by financial publication The Motley Fool. According to the report, this time, the company has actually fingered fans as the driving force behind the move towards NFTs saying that they were seeking more and more digital experiences beyond the limitations of the game.
He said: “They want more modalities at play inside the game, which go beyond just straight 11 on 11 football. They want more digital experiences outside the game, esports, NFTs broader sports consumption and they want us to move really, really quickly. And so I would tell you, as we think about the future of football, we think it’s very bright. We’re going to work with our global collection of partners that we feel best enables us to do that.”
Discussing NFT’s suitability for game-related collectibles acknowledges that a large part of EA’s revenue is already made from selling collectible cards in Ultimate Team mode, so using NFTs is not to introduce a paying aspect to fans since they already desire this. Instead NFTs would replace the existing technology with a blockchain-abled one, to make it more transparent and more secure.
Wilson notes that as leaders in creating digital content with real collectible value, they recognized that collectibility has more value to collectors when the items collected have utility – as the cards do in Ultimate Team mode. And this is very different from the NFT efforts from the likes of GSC and Ubisoft, whose communities reacted angrily to the lootbox mentality they associated with those decisions.
Take Two
Take Two Interactive is another big games publisher who agrees that the technology behind NFTs only makes sense to be aligned with the idea of collectibility. CEO Strauss Zelnick when speaking to Games Industry in November 2021 made his thoughts about NFTs pretty clear, saying:
“If you believe in collectible physical goods, I don’t know why you wouldn’t believe in collectible digital goods… [they are] one way… to authenticate the fact that something singular is rare.”
On the other hand, the Take Two CEO is aware of the current bubble phase of NFTs, and insists that he decries the fact that people think just because something is an NFT, it has value or that its value will become higher in the future. He believes that speculative interest means that prices will go up, but they must come down, too.
While this doesn’t mean the company will dive into NFTs like GameStop already has or like EA suggests it would, its CEO certainly seems to understand that there is a right way to do it, and, like we believe, only if there is in fact a solution that can be met by the tech. Zelnick explains: “For an NFT to be valuable and durable, it has to be found at the intersection of rarity and quality, of rarity and value. And there’s rarity for sure in all NFTs, but I’m not sure there’s value.”
Blockchain will become a future big business in gaming and we believe in the adoption of this emerging tech to improve innovation in gaming. Secondly, NFTs must provide utility to become valuable, and crucially important to any Web3 game mechanics. And finally, NFTs must meet rarity and quality, and of rarity and value.