Minecraft-Based NFT Project in Disarray After Minecraft Bans NFTs

NFT Worlds generated millions in sales of Minecraft-linked NFTs, and now says it could "pivot" following a ban.
Minecraft NFT Project Implodes After Minecraft Bans NFTs
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On Wednesday, Minecraft developer Mojang Studios announced it is banning integrating NFTs into its game.

Part of the rejection of NFTs stems from rules in place to ensure all players have access to the same functionality; for example, there are rules around how people charge for server access. 

"We have these rules to ensure that Minecraft remains a community where everyone has access to the same content," the blog post goes on to explain. "NFTs, however, can create models of scarcity and exclusion that conflict with our Guidelines and the spirit of Minecraft."

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To that end, the company is rejecting blockchain technologies entirely and will not allow them to be used on client and server applications, nor will NFTs be allowed to use Minecraft in-game content. 

On news of the decision by Mojang Studios, a popular NFT project that sits on top of Minecraft saw its tokens and NFTs plummet in value. NFT Worlds sells NFTs tied to "world seeds," which can be used to create Minecraft worlds using the base game client. To date, the project has generated over $75 million in transaction volume at today's crypto prices. After Mojang Studios' announcement, the minimum price for an NFT Worlds NFT cratered, from 3 ETH ($4,500) to 1.4 ETH ($2,100) at the time of writing. Its token was also down over 70 percent.

In a statement shared on Twitter, NFT Worlds' developers derided the decision as being "out of nowhere" and said that they were trying to get in touch with Microsoft to discuss the decision, find out "what the true internal motivators may have been," and find an "alternative outcome." If this is fruitless, the developers said, "we pivot." As to what the project could pivot to, they floated essentially building their own version of Minecraft, or developing a "GameFi as a service" platform.

All is not lost for NFT Worlds, however. A spokesperson for Microsoft told Motherboard that someone who has a world seed from NFT Worlds will continue to be able to use it with Minecraft, and even host it as a destination for other players; an NFT being associated with that world seed somewhere else on the web is somewhat beside the point. What will not be allowed is its API, which allows players to send and receive token payments inside Minecraft.

Before the onset of the crypto winter that has lasted some eight months now, companies jumped at the chance to roll out NFTs precisely because they offered artificial scarcity and the chance to generate new rents or gain from speculative bounces in digital asset prices. Many of the projects that have jumped at the chance to integrate NFTs, however, have struggled to sustain themselves let alone offer a viable use case that justified inflated values before the most recent crypto collapse began.

The incentives NFTs have towards exclusion and profiteering, along with the rampant fraud and the potential harm to players were all listed as concerns by Mojang Studios in its blog post.

“Some third-party NFT implementations are also entirely dependent on blockchain technology and may require an asset manager who might disappear without notice,” Mojang Studios went on to explain. “There have also been instances where NFTs were sold at artificially or fraudulently inflated prices. We recognize that creation inside our game has intrinsic value, and we strive to provide a marketplace where those values can be recognized.”

Notably, Mojang isn't completely ruling out integrating blockchain tech or NFTs into its platform one day. "We will also be paying close attention to how blockchain technology evolves over time to ensure that the above principles are withheld and determine whether it will allow for more secure experiences or other practical and inclusive applications in gaming," the developer said in its announcement, adding that it has no current plans to integrate blockchain tech into the game.