The debate over video game NFTs is heating up – and it has spotlighted a growing NFT platform: Enjin (ENJ-USD). Let’s see why…and where three major franchises fall into the debate now.
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Minecraft Publisher Says “No” To NFTs
Tell me if you’ve heard this argument against NFTs:
“Digital art can be copied, moved or even deleted.” NFTs are ‘speculative’ and ‘not reliable’, even ‘fraudulent’.
These were all released on Wednesday in a press release from Mojang Studios, the creator of Minecraft that Microsoft (NASDAQ:MSFT) acquired in 2014.
These are certainly issues in the NFT art world: Artists have seen their works appear on NFT marketplaces – with the proceeds going to someone else. Fraud occurs, with anonymous collections promising that their NFTs will get you a member of an exclusive (and lucrative) club… that will never materialize.
But I’d say video game platforms are structured in such a way that to prevent many of these:
Create assets such as character skins, worlds and “persona items”, deploy them directly into the game, with blockchain integration… And how would a thief even find them before they’ve already been minted as NFTs – officially recognized by the game ? Plus, there aren’t many pie-in-the-sky promises being made here. Your NFT resources make the game more fun… Or not. If they do, they are really valuable!
Minecraft knows this on some level. This is also apparent from the press release! The biggest reason they give for not supporting NFTs is this:
NFT collectibles and rewards “create digital property based on scarcity and exclusion… The speculative pricing… encourages profit-seeking,” which “is not in line with Minecraft values of creative inclusion and play together.”
It’s nice to be idealistic, but this attitude has two root causes in my opinion.
First, it fits where gamers are now with NFTs. In its “Metaverse Awareness Survey”, conducted in May, Globant (NYSE:GLOB) asked US gamers about NFTs, cryptocurrencies and play-to-earn models in general:
- 45% of respondents were not interested in crypto, 34% were interested and 20% were “undecided” about crypto.
- “Nearly 40% would like a mix of both playing and earning within metaverse games”…
- But 81% of them have not bought NFTs.
Most importantly, saying “no” to NFTs fits the Minecraft/Microsoft business model.
MSFT makes most of its Minecraft revenue by selling console and mobile versions of the game to a fairly young audience. But in just four years, the “Minecraft Marketplace” has also become big business! “Creators have generated more than $350 million from over a billion downloads of mods, add-ons and other experiences in Minecraft,” as Microsoft boasted in its April 2021 earnings call.
However, Microsoft takes a significant portion of these millions. In the Minecraft Marketplace, “we have a model that allows us to give more than 50 percent of the revenue to the creators,” Minecraft’s executive producer said at launch.
If you’re wondering why this is worded so generously… That’s pretty standard (if not low!) for Web 2.0 platforms. Roblox (NYSE:RBLX), for example, typically accounts for 72% of sales! But if this were to happen on the blockchain: OpenSea only takes 2.5% of the revenue; Magic Eden takes a 2% discount – or directly on the network, you could keep all the proceeds from trading NFTs for your games.
Rival publisher Epic Games has a different business model. Although it is best known for creating Fortnite, the zombie game with an equally young audience… Epic Games made a name for itself in the industry with its Unreal Engine.
And to remain (so to speak) a major player in video game development, Epic Games leaves the door open to the metaverse and NFTs.
Unreal Engine + Metaverse = Watch Out, Steam
Unreal Engine 5 is “the world’s most open and advanced real-time 3D creation tool.” NVIDIA (NASDAQ:NVDA), for example, was quick to integrate it with its new Omniverse platform… And NVIDIA and Epic take the stage at game developer conferences to show off the latest graphics products together.
in April, Sony (NYSE:SONY) invested a cool $1 billion in Epic Games… with another $1 billion invested by KIRKBI (the family business behind the Lego Group)! All this was to “speed up” [Epic’s] working on building the metaverse” for “new digital fan experiences”.
Blockchain Technology Wasn’t Explicitly Mentioned…
But when Minecraft’s statement last week had the NFT debate trending on Twitter, Epic Games founder and CEO Tim Sweeney said he fine with NFTs:
“Developers should be free to decide how they build their games, and you should be free to decide whether to play them. I don’t think stores and operating system makers should interfere by forcing their opinion on others. We are certainly not going to do that.”
Again, Epic Games has a different business model than a pure game studio. It also offers best-in-class tools for: other developers – and as they build on the blockchain, Unreal Engine will be there.
Square Enix brings millennial nostalgia to Enjin
Did you know that Final Fantasy VII – the most popular installment in this classic Japanese franchise – is celebrating its 25th anniversary?
People in their thirties and forties can relive it all with commemorative action figures and trading cards. The publisher of Final Fantasy, Square Enix (OTCMKTS:SQNNY), will also provide an NFT for each collectible… So you can show off your fandom in your crypto wallet (or cash in!)
“If you didn’t already know, Square Enix has been around since the mid-1970s and is responsible for making some of the most well-known video games and video game series ever,” write Luke Lango and Charlie Shrem for Saturday’s update on our website. Ultimate cryptography subscribers. In addition to Final Fantasy, there are Dragon Quest and Kingdom Hearts, just to name a few.
“Square Enix did its due diligence on blockchains and decided Enjin would be the best place to launch a series of NFTs to celebrate the 25th anniversary of one of its games.” This could also be an early step towards Square Enix’s medium-term goals for developing games on the blockchain.
Why Enjin Network?
Earlier Luke and Charlie emphasized Enjin Munt (ENJ-USD) as the “Emerging Play on NFTs” for their report on 5 mass adoption tokens that will change the world (exclusively in Ultimate cryptography).
Build on Ethereum (ETH USD), the leading NFT blockchain, “Enjin has created the hyper-scalable and widely used infrastructure underpinning the NFT market,” the investor report reads. “To date, Enjin has installed nearly 2 million blockchain wallets, created more than a billion tokenized assets (including NFTs), and sold nearly a billion of those assets.”
Those wallets and assets all use Enjin Coin for transactions. And the EnjinX Marketplace has some “unique technology that allows NFTs to be transferred via QR code scanning.” Luke and Charlie see ENJ as “the epicenter” of a market projected to be “a day north of $100 billion”.
Enjin Coin is a +278% winner in the Ultimate cryptography portfolio since April 2020. By the way, everything 5 mass adoption tokenscan you get the latest investor report: The Burn Coin with 10X Potential. Check out our free briefing on how to make the “Burn Code” work for you today.
Ashley Cassell had no positions (directly or indirectly) in the securities referred to in this article as of the date of publication. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication Guidelines. If you would like to receive more news from The New Digital World in your inbox, click here to sign up for the newsletter.
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