Well, it happened. NFTs have been brought into the videogame space by a major game company, beating EA’s inevitable attempts with their next round of soccer games. The first—and probably not the last—swing Ubisoft will be making at NFTs (non-fungible tokens) playable in an HD game and allegedly “relying on an energy-efficient technology” are called “Digits” and will be available through Ubisoft Quartz. Digits are unique collectibles that can be played in-game, starting with limited edition gear for Tom Clancy’s Ghost Recon Breakpoint player character avatars with unique serial numbers.
Starting tomorrow, Dec. 9 at 1 p.m. ET, a limited number of M4A1 Tactical rifles with a black-and-red color scheme called “Wolves” will be made available. Then the dark grey “Wolf Enhanced Helmet A” on Dec. 12 and “Wolf Enhanced Pants” on Dec. 15. I don’t know how any of this contributes to being better at the game or having a more fun experience (Ubisoft says on the website “Digits are purely cosmetic items that do not influence the gameplay, be it PvE or PvP”), but people buy skins in free-to-play games, so it’s not that mind blowing a concept.
NFTs in Ghost Recon are, as ever, a solution in search of a problem; supply in search of a demand. Like skyrocketing college football coach salaries and the building of luxury condos that people can’t afford, NFTs are a symptom of late capitalism, a consequence of vast income inequality and poor distribution of resources. College football boosters, venture capital firms buying up property, and videogame companies looking to further wring money out of their consumers all have capital without productive use, so they put it toward means of extracting further capital from people that have less.
NFTs have been described as a “pump-and-dump scheme” by Amy Castor at Business Insider. NFTs convey “proof of ownership” without any copyright or any physical object that has allegedly been bought. In that July article, University of Campinas computer science professor Jorge Stolfi argues that “a purely digital artifact—a pattern of bits, like a JPEG image or an MP3 song file—cannot be a collectible, because it can be duplicated trillions of times, and every copy is exactly the same as the original. Not just similar or even identical, but the same thing.”
The individual NFTs have their value artificially inflated by bidding wars between crypto insiders. Then either other super-rich people buy them because they have more money than they can productively use, or people in the vast and nondescript middle class pour their savings into something hoping that they can flip it.
Sometimes this happens through a process called “wash trading,” like if you minted an NFT, bought it from yourself for $1 million, and sold it for $500,000 to someone, to use Castor’s hypothetical. You’ve made $500,000 without creating any value through production by convincing someone that the value of a thing they can’t actually own will increase ad infinitum.
Ubisoft bills the value and security of Digits through being bound to individual player game accounts; presumably they will be more difficult to copy than a stoned ape avatar you can right-click to save to your hard drive. Ubisoft has also told IGN that the company might reconsider their NFT usage if they can’t ensure there won’t be a negative environmental impact. The proof-of-stake system Ubisoft is using through the Tezos blockchain is more efficient than the proof-of-work system that Bitcoin uses, though if the value is in resale, players might end up selling through other blockchain systems.
MMO accounts have been known to be sold on the internet at places like MMO Provider and Player Auctions, but the value there is based on not wanting to spend as much time leveling-up a character, buying and upgrading their gear. So, are Ubisoft players going to spend money on this equipment in hopes of eventually reselling them to people with more money that somehow missed the boat? These first three items will be free for players that have the Ubisoft “ecosystem of player services,” Ubisoft Connect PC, for Tom Clancy’s Ghost Recon Breakpoint.
Even then, the market value is hardly objectively rated. In 2019, Screen Rant reported on a lawsuit brought to court in China when a man that paid $1.4 million for a Justice Online character loaned it to a friend that in turn sold it for $552. The original owner got the character back, but had to pay $12,000 to the end-customer.
It should not come as a surprise that game industry executives, who already charge consumers for licenses to play games rather than giving ownership of the games themselves, as well as charging microtransactions to make those games playable, are trying to generate more money from themselves out of thin air.
It reminds me of the episode of It’s Always Sunny in Philadelphia where Frank tries to artificially inflate the value of some drawings by Charlie. As the art appraiser tells him toward the end, art’s value is only what people perceive it to be. And the value of NFTs rests on how much you perceive it to be worth to own in name something you can never own in reality.