The Crypto Revolution Is an Existential Crisis for Video Games

An internal culture war is playing out across the video game industry, with developers (and players) pitted against executives and crypto evangelists.

Feb 28 2022, 3:59pm

It was a good time for Fred, a video game developer, to look for a job.  COVID-19 has made video games more popular than ever, but that popularity coincided with the entrance of cryptocurrency and its byproducts, like NFTs, into the mainstream. Crypto talk is everywhere, and Fred, who asked to remain anonymous to avoid jeopardizing their career, is not merely indifferent about NFTs—he’s firmly against them.  

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“What a cruel world we live in that people are compelled to commodify something so pure and essential to the human experience as play,” said Fred in an interview with Waypoint.

This all made for an awkward moment when Fred, interviewing for a high-level position at a new studio founded by a group of veteran game developers, was informed the developer was likely interested in incorporating the blockchain into their game. Nothing about crypto was mentioned on the studio’s website. Fred said he wouldn’t have applied in the first place otherwise. Twice last year, Fred discovered that a game studio and potential employer was interested in incorporating the blockchain into its games only during the interview process.

“[They] waited until halfway through an hour phone interview to mention ‘something kind of controversial for some people’ referring to using the blockchain,’” said Fred. 

A follow-up email from the potential employer included links to articles like “Would Karl Marx Support the Existence of Blockchain?” before Fred politely turned down the job, and noted that any involvement with crypto was a non-starter. In response to Fred’s decision, the company’s CEO sent a personal essay about why the blockchain is cool, including asking Fred why someone could reject cryptocurrency but “support fiat currency aka USD.”

Waypoint has spoken with developers at Electronic Arts, Zynga, Behaviour Interactive, Ubisoft, and others. Each of these companies is either actively using or considering crypto in its games. Across the board, developers Waypoint talked to described internal turmoil and disapproval over what’s seen as dollar signs guiding executive-level decisions that seem to add little to the already wildly popular medium, and if anything, present a threat to how and why games are currently made.

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Video game companies were still interested in hiring Fred despite their anti-crypto position. But it added a new layer of complexity to a job search that went beyond the normal criteria of “does this project sound cool, will I be paid appropriately, are the benefits good?” The underlying culture and ethics of a company are important but often hard to parse from the outside. Crypto, then, becomes its own red flag.

Fred now works at a different company founded by a group of veteran game developers—and so far, NFTs have not come up.

Cryptocurrency has existed for over a decade now, but in 2021 it took a much stronger hold among video game industry executives. Ubisoft launched its own line of NFTs, and several companies have announced support for NFTs before canceling plans, due to backlash. It’s a rare case where nearly every niche of gaming’s enormous community is united against NFTs, whose “play-to-earn” pitch—which mostly revolves around flipping in-game items tied to a unique token—strikes many as a fundamental breaking of a longstanding contract between player and developer about why we play video games at all.

“The business guys love NFTs because they look like a big pile of money for very little work, and that's exactly how they want to live their life, but I'll tell you on the dev side, nobody wants to fucking do them—aggressively.”

One of the most infamous examples of a game incorporating an early form of a play-to-earn system was Diablo III’s auction house, where players could buy and sell weapons and items for real money. Play-to-earn, a recent phrase riffing on “free-to-play” in which players are “rewarded” for their participation in a video game with ways to earn actual money, hadn’t been conceived back then. But Blizzard’s experiment in monetizing scarcity was a disaster.

“I think we all know this by now and the consequences,” said former Diablo III game director Jay Wilson years later. “We worried about these consequences ahead of time, but we thought the benefits would outweigh the downsides, and WoW’s AH [World of Warcraft’s auction house] seemed like a good proof of concept. Obviously we were mistaken.”

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This interest in crypto, much of it financially motivated, has prompted dynamics similar to what Fred experienced, where companies talk one way in public—and another in private.  

Some companies, like Square Enix, have been more forthright about their plans, promising a “major push” into blockchain gaming in the future. Electronic Arts is one of those companies.

In early November, EA CEO Andrew Wilson said on an earnings call that NFTs were part of the “future of our industry” and the company had job listings that referenced “NFT” and “blockchain.” Given how many multiplayer games EA publishes, including the monstrously popular collectible trading card aspect of soccer series FIFA, EA’s curiosity made sense.

A month later, a question floated up within EA’s internal Slack, according to a screenshot shared with Waypoint. A channel within that Slack is “EA Insider,” where the company can respond to internal questions from employees. On December 9, the company chose to respond to a question on this topic, asking: “EA seems to be recruiting for positions around NFTs. One of EA’s core commitments is around the environment. How do we reconcile this?”

“While we’re seeing the rise of NFT-driven games,” said Wilson as part of a longer response, “right now the great majority of transactions are speculative investment—where the items do not provide utility, there is little connection to a community, and it’s primarily based in a belief that the value will increase over time. Speculative investment is not the space we want to get into. As we explore NFTs, our orientation is to offer items of utility in an experience that also create status and connection to a community. This is where we have a greater opportunity to create a strong value proposition for players than most others in the digital collectible space.” 

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As for the environmental question, Wilson echoed a familiar talking point: “we’re already seeing a lot of evolution to reduce the environmental impact of using the blockchain.” EA, like many companies, has made public commitments to protecting the environment by reducing their carbon footprint, a commitment undercut by the nature of how most current crypto projects work. Most cryptocurrencies use “proof of work” blockchains, which require lots of energy to process transactions. And so to blunt environmental criticisms, some like Ubisoft use what’s called “proof of stake” blockchains, which are more energy efficient. 

At the time the screenshot was taken, employees responded with various emojis: 46 “rock on” hands, 28 Christmas trees, 56 thumbs up, 160 thumbs down, 96 confused faces, 115 stop signs, 81 “nopes,” and more. Employees are not allowed to comment beyond emojis.

You can read the entire response from Wilson below:

EA CEO Andrew Wilson addressing NFTs in an internal chat message.

EA confirmed the authenticity of the post to Waypoint, but declined to comment or elaborate.

In February, Wilson publicly cooled on NFTs, saying on an earnings call it would “evaluate [NFTs] over time” and whether collectibility in games was blockchain-related “remains to be seen.”

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Whereas EA has been seeking to add workers familiar with crypto, FarmVille publisher and overall mobile gaming powerhouse Zynga announced the hiring of Matt Wolf as its “VP of blockchain” in November. Zynga president Bernard Kim framed Wolf’s hiring and Zynga’s move into crypto to Axios as going “where players and their aspirations head towards.”

“I know people at Zynga who are deeply skeptical of crypto and NFTs and others who love them,” said one current Zynga employee to Waypoint, who’s been at the company for several years and asked for anonymity because they did not want to put their job in jeopardy. “At the end of all this, games get taken down all the time and the people who buy these NFTs are eventually going to be left holding something useless, and depending on how the cryptocurrency is structured may be burning horrific amounts of fossil fuels to power.”

If you work at a video game company and your company is getting into NFTs, or thinking about getting NFTs, I want to hear what those conversations are like. My secure email is patrick.klepek@protonmail.com and my Signal number is 224-707-1561.

Within Zynga’s corporate Slack, there is a channel dedicated to crypto, which naturally was “very excited” at the hiring of someone explicitly to think about Zynga’s future with this tech.

It didn’t take long for this question to bubble up when workers had a chance to formally ask for more details. At a department-level Zynga all-hands in December, a recording of which was shared with Waypoint, Zynga senior VP of product, game design, and analytics Andrew Ice noted the company received “lots of feedback on this [NFTs]—lots of excitement, also a bunch of feedback that was honestly quite negative.”

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“NFT gaming, or games based around blockchain technology, is absolutely taking off right now,” said Ice. “It's taking off in a way, in particular on the speculation side, that is probably not sustainable. But it is and can be as transformational as IAP [in app purchase] was to coming into games. And so it does behoove us to have some R&D, to be looking at this.”

A screen shot from the video game 'FarmVille 3.' Courtesy of Zynga

Ice pushed back on the popular theory that Zynga would immediately shove NFTs into games like FarmVille, noting this was “not the intent.” Instead, Zynga hoped to build new games around the technology, specifically with an eye towards how it could scale wide.

He also acknowledged the environmental impact of technologies like Bitcoin are “very, very real,” but much like Wilson, immediately pivoted to “how fast it [the tech] is progressing” in supposedly addressing the worries about climate change. 

“His characterization makes it seem like a lot more people were more vocally upset than I had realized,” said our source. 

Zynga spokesperson Kenny Johnston told Waypoint the company “can’t share details of internal meetings publicly” and thus would not comment on the reported statements by Ice.

“We’ve been building a team to explore how Zynga can best approach the space in a humble way that puts the community first,” said Johnston. “Currently, there are about 6 people on the team and we hope to grow that over time. While there were naturally a lot of questions when we first announced this, overall employee sentiment has been positive and we haven’t seen employee turnover as a result of our growth in this space.”

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A company-wide all-hands meeting was scheduled a few weeks later, but it was delayed into January. There was a good reason for the shift : Take-Two Interactive, publisher of Grand Theft Auto, announced on January 10 that it was buying Zynga for $12.7 billion. During an all-hands that took place shortly after, NFTs didn’t really come up. The buyout took priority.

“Perhaps unsurprisingly, the acquisition talks and questions etc have taken over all discussion,” the employee said.

The two are aligned in regards to NFTs, however, with Take-Two CEO Strauss Zelnick saying he’s “a big believer” in NFTs but downplayed ongoing backlash from players, arguing for patience. “Let's not call into question underlying technology just because so far the expression of that technology has been inside of speculation,” Zelnick told IGN recently.

One of the most popular (and enduring) multiplayer games of the last few years is Behaviour Interactive’s Dead by Daylight, where four players try to survive attacks by another player running around as the powerful “killer.” Dead by Daylight has its own “killers,” but a huge part of the appeal is an expanding rogues gallery of horror icons like Michael Myers, Freddy Krueger, and others. 

“Games get taken down all the time and the people who buy these NFTs are eventually going to be left holding something useless, and depending on how the cryptocurrency is structured may be burning horrific amounts of fossil fuels to power.”

Last September, developer Behaviour Interactive announced Pinhead from Hellraiser would join Dead by Daylight, and predictably, people were stoked about it, because Pinhead rules.

Pinhead’s addition to the game went smoothly, but in October, the developer announced a partnership with Boss Protocol, a company that “empowers brands to unlock the full potential of the blockchain.” In this case, Behaviour worked with Boss Protocol to turn in-game models from Dead by Daylight, including Pinhead, into an NFT that could also unlock game content.

An error occurred while retrieving the Tweet. It might have been deleted.

Fans of Dead by Daylight were much less stoked about this decision, and quickly began loudly pushing back against the news, worried it meant NFTs were coming to the game.

An error occurred while retrieving the Tweet. It might have been deleted.

The pushback quickly resulted in Behaviour publicly announcing that “zero blockchain tech exists in Dead by Daylight, nor will it ever.” But the partnership with Boss Protocol continued, and fans understandably pointed out the contradiction in saying you don’t support NFTs, except that you do when it’s part of a pre-existing partnership that requires supporting NFTs.

Externally, people were upset. It was the case internally at Behaviour, too.

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“Everyone hates it,” said a Behaviour Interactive employee at the time, who asked to remain anonymous because they were not authorized to speak publicly. “We didn’t know it was coming at all.”

The uproar within the studio behind Dead by Daylight prompted the developer to take a firm stance against NFTs during a December all-hands meeting. Only hours after the meeting, S.T.A.L.K.E.R. 2 developer GSC Game World canceled its own NFT plans, citing backlash.

Behavior chose to keep this stance private, even as companies like Ubisoft were loudly declaring not just support for blockchain projects, but actively working to create its own. This prompted an employee to press for more details at the company’s next all-hands in January.

“Let’s be clear,” said Behavior director of marketing communications Marie Claude Bernard in an excerpt from the meeting shared with Waypoint. “We are not making NFTs and we won’t, either. What I meant is that we are not even taking [a] stance in the press or on social media, whereas all of our competitors currently are. We’ve heard the likes of Ubisoft and so many others. That’s all I meant. There’s no NFTs in the works, and there won’t be, either.”

“She [Bernard] was reiterating in her own words,” said Behaviour Interactive public relations lead Steven Ross in a statement to Waypoint, “the position that Behaviour Interactive had already shared publicly with several media outlets earlier in the fall: ‘We hear and understand the concerns raised by our community over NFTs. Absolutely zero blockchain tech exists in Dead by Daylight. Nor will it ever. Behaviour Interactive does not sell NFTs.’”

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Ross pointed out “the studio’s position remains [the] same to this date.”

Behaviour did not step back from the Hellraiser NFTs, however.

A screen shot from 'Axie Infinity,' one of the more popular NFT games. Courtesy of Sky Mavis

Most game developers do not talk to the press, but in regards to crypto, workers are increasingly speaking out. Employees at Team17 talked to Eurogamer after the publisher announced a set of Worms NFTs, prompting a backlash that revealed other issues regarding pay and working conditions. Bloomberg reported feedback regarding Ubisoft’s NFT initiatives on the company’s internal message boards includes “hundreds of negative comments.”

At the moment, there are lots of emerging crypto video games—the Pokémon-esque Axie Infinity, for example, is one of the most popular—that are good at the crypto part (handing out tokens with increasingly weird names) and bad at the game part (where it’s fun to play). Because crypto has continued to take off and become a buzzword in mainstream culture, there’s a lot of money being tossed around at potential projects. We’re now seeing crypto-focused gaming companies like Gala Games outright purchase games already in development without crypto and—ta-da!—add crypto.   

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Just recently, Gala Games announced a game called GRIT, a “all new battle royale set in the frontier of the old West.” The announcement trailer for Gala Games’ news, however, is the same one that was released for GRIT in April 2021, when GRIT was originally revealed. The only difference between the trailers is some “coming soon to Gala Games” text at the start.

GRIT was due to be released in early access on Steam in late January, before it was suddenly delayed. The developers said the game was “not quite ready” on Twitter.

After the Gala Games partnership, the developers released a statement on GRIT’s Discord server that “name-calling and personal attacks are not allowed” and discouraged NFT or crypto-related talk from happening in channels explicitly meant to talk about the game, even though it appears the biggest changes coming to GRIT are, in fact, related to crypto.

“It is too early to be fixating on the NFT integration,” continued the announcement on the Discord. “We have released no information on that topic yet and it isn't particularly constructive to throw out wild guesses based on other games. Please don't try to read our minds—we will send out official information here as we solidify plans.”

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“The business guys love NFTs because they look like a big pile of money for very little work, and that's exactly how they want to live their life,” said another developer at a major video game publisher who, until recently, was actively courting NFT projects and pitching them internally. “But I'll tell you on the dev side, nobody wants to fucking do them—aggressively.”

This developer, who asked for anonymity because they were not authorized to speak publicly, noted the crypto-related pitches coming through had one thing in common: they were one-sided about the benefits of crypto.

“There was no attempt to make a potentially balanced [take],” they continued. “Here's some potential drawbacks: everybody fucking hates it.” 

This lines up with the way companies like Ubisoft have acted in response to NFT backlash. Case in point: the executives behind Ubisoft’s NFT effort told Finder that “gamers don’t get what a digital secondary market can bring to them,” and “it’s really beneficial” but “they don’t get it for now.” In other words, players don’t understand how cool NFTs are—but they will! 

“You work so hard to earn gamers’ trust, which is like the hardest thing in the entire world,” said the same source. “Blowing that up for $40,000 worth of JPEGs is not worth it. There is more to life than money going up and down. There are values and experiences, which do not need to be monetized to be valuable.”

“In their minds, if we don't agree with them, it's because we are just too stupid,” said Ubisoft senior game designer and union representative at Ubisoft Paris Marc Rutschle to Waypoint. “As far as I know, Ubisoft is still going on with this dumb tech.”

(Like the vast majority of game companies, Ubisoft is not fully unionized. But internationally, in parts of the world where there is stronger institutional union support, sprawling publishers are forced to deal with Unions. Here, it’s the French trade union Solidaires Informatique.)

In a recent interview with Axios, Zynga’s blockchain chief Matt Wolf said it’s looking to hire a “tokenomics designer,” allow Zynga employees to opt-out of NFT projects, and hopefully release a game later this year. Wolf also pointed out how Zynga needs to take into account that someone’s primary interest in a cypro-centric product might be “yield,” not gameplay.

“We don't want to bring them something that they didn't ask for,” said Wolf, “and we don't want to assume that they want a super, super deep gameplay experience.”

It’s a shockingly honest assessment of Zynga’s own ambitions within the space, and underscores the tension between its financial goals and both developers and players, a tension that’s likely to continue playing out in the months ahead. Gamers might not like crypto, but game executives are very curious about it, and it’s not going away quite yet.

“What they're saying is they want to change what a game is,” said one developer. “A game is no longer about having fun. A game is now about making money. The dirty secret of gaming is that a lot of what you're doing in gaming is just killing time to have fun. And that's okay, but if you were going to monetize it, the actual monetary value of you playing a video game is like three cents an hour.”

Follow Patrick on Twitter. His email is patrick.klepek@vice.com, and available privately on Signal (224-707-1561).

Tagged:

cryptocurrency, Electronic Arts, crypto, nfts, Behaviour Interactive

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