Video game companies like GameStop should think twice about NFTs? Customers may baulk
The video game industry is at a crossroads. Enticed by the prospect of easy profits, game publishers and even a retailer like GameStop Corp. are embracing the opportunity provided by the hottest buzzword of the moment: blockchain-enabled non-fungible tokens, or NFTs. But they should reconsider.
Frustrated by sluggish sales of popular titles, game makers are on the hunt for other revenue sources. Yet any gains come with a real risk of alienating their customers, many of whom view sales of virtual goods as an intrusion on the gaming experience.
NFTs are unique collectibles stored on a blockchain that are associated with a digital asset such as images or videos. The virtual goods often come with little or no usage rights. But that hasn’t stopped the speculative frenzy over buying and selling the items.
GameStop, for example, has been working on an NFT platform that will allow creators and publishers to list gaming-related items such as outfits and weapons. On Thursday, the Wall Street Journal reported the retailer had hired more than 20 employees for the project and plans to launch its marketplace later this year. GameStop last year was among a handful of companies caught up in the meme-stock trading mania that sent its shares soaring.
Some leading gaming executives and companies have raised concerns about the frothy nature of NFTs. In October, Valve banned any software that issues or allows NFTs on its popular PC game store. Epic Games Inc. Chief Executive Officer Tim Sweeney has said the NFT space is filled with scams, while Microsoft Corp.’s head of Xbox, Phil Spencer, told Axios some NFT gaming efforts are “exploitive.”
Their warnings haven’t stopped a wave of NFT initiatives among other gaming companies. In November,
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