July 26, 2022
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Tuesday, we’re discussing the fallout from Microsoft’s ban on blockchain tech and NFTs in Minecraft, new unionization efforts in the game industry and the quagmire surrounding loot box regulations.
The video game industry’s adoption of Web3 technologies like NFTs had already begun to chill. But last week’s blockchain ban from Minecraft developer Mojang, combined with a crashing crypto market and plummeting NFT sales, sent the burgeoning blockchain gaming market into thoroughly icy territory.
Mojang, with the backing of its parent company Microsoft, didn’t mince words, calling NFT speculation “inconsistent with the long-term joy and success of our players” and saying the current digital ownership structure of most blockchain projects “does not align with Minecraft values of creative inclusion and playing together.” The decision reverberated quickly throughout the broader game industry, providing a much-needed wake-up call to blockchain gaming proponents.
Minecraft was an attractive Web3 prospect. Part of the reason Mojang’s announcement hit so hard was because Minecraft is a critical example of the kind of platform blockchain gaming boosters desperately want to create and build atop of.
Gaming’s biggest players don’t want, or need, NFTs. Microsoft’s decision follows a similar denunciation of NFTs and blockchain tech from Sony, which is launching its own digital collectibles feature as part of a new rewards program.
Minecraft had good reason to cut off blockchain integrations. Mojang mentioned in its announcement that some companies “recently launched NFT implementations that are associated with Minecraft world files and skin packs.” It became clear in short order the studio was referring to projects like NFT Worlds.
It may be tempting to look at the Minecraft NFT ban as a sign these technologies won’t take off. The backlash against blockchain tech in gaming can seem overwhelming.
If the game industry wants to get it right, Web3 proponents might have to rethink their approaches, and perhaps stop trying to use other companies’ IP. “Games should sell their products based on the value they’re providing. Blockchain is not value. It’s a tool you can use to provide value,” said Swenor. “Until game developers start viewing it that way to make their games better, it won’t take off.”
— Nick Statt
Thinking outside your wall: How the path to net zero requires a new approach to collaboration and knowledge sharing: The emissions that make up a full greenhouse gas footprint can emanate from outside the four walls of your own manufacturing operations, like in the case of PepsiCo, where 93% of emissions come from its value chain.
“Developers should be free to decide how to build their games, and you are free to decide whether to play them. I believe stores and operating system makers shouldn’t interfere by forcing their views onto others. We definitely won’t.” — Epic Games CEO Tim Sweeney defended his company’s decision to distribute blockchain games on its PC game marketplace in response to the Minecraft ban and competitor Valve’s Steam ban.
“If I'm going to make this game, it means I have to build a team, and if I build a team, I have to build a company, and if we're going to do that then we have to do it the right way … It has to be inclusive, equitable, and collaborative, full of big-hearted people that want to grow both professionally and personally. The culture needs to be as iterative as the way we make games.” — Bruce Straley, a former Naughty Dog director behind games like Uncharted and The Last of Us, posted a video to YouTube about returning to the game industry after a five-year hiatus to form a new studio, Wildflower Interactive.
More unions in the game industry. A second group of Activision Blizzard employees, this time at subsidiary Blizzard Albany, filed for a NLRB union election last week, while management at LA-based indie developer Tender Claws will voluntarily recognize a new union unit, Polygon reported.
Hulu has blocked ads on abortion and gun control. Democrats charge that the Disney-owned streamer has blocked ads that have run on a variety of other services.
Pico gets ready to release a new VR headset. The Pico 4 headset is likely part of the company’s strategy to take on Meta’s Quest VR hardware. Pico is a subsidiary of TikTok owner ByteDance.
Ubisoft’s rough release slate. The French publisher said last week it would push multiple projects to 2023, including a game based on James Cameron’s “Avatar” and a new Assassin’s Creed entry. Ubisoft is also canceling both Splinter Cell and Ghost Recon projects.
What’s next for Netflix’s interactive shows. The lines between games and choose-your-own-adventure stories are starting to blur as Netflix continues to work on interactive content.
Bungie’s legal offensive. The Destiny developer, now officially a Sony-owned studio, filed a lawsuit against a serial harasser who threatened its employees. Bungie has been increasingly wielding the legal system to combat cheaters, copyright trolls and now online abuse.
The adaptations don’t stop coming. Hollywood adaptations of video games continue unabated, including a new “Grounded” TV series from “Star Wars: The Clone Wars” writer Brent Friedman and a follow-up to Simon McQuoid’s “Mortal Kombat” reboot.
Riot Games’ settlement inches closer to payouts. A historic $100 million gender discrimination settlement between the Valorant developer and current and former employees was granted preliminary approval on Friday, Axios reported.
The vital role of the loot box in the game industry’s bag of monetization tricks doesn’t appear to be changing any time soon, despite concerted efforts from European regulators.
The decision dealt a blow to critics of the practice, who say loot boxes target underage video game players and exploit consumers by using feedback loops similar to gambling.
The regulatory heat around loot boxes isn’t letting up, however.
— Nick Statt
Thinking outside your wall: How the path to net zero requires a new approach to collaboration and knowledge sharing: Asking suppliers and associated companies to overhaul the way they work is no small feat, but PepsiCo is taking a three-pronged approach centered around the principles of educating, enabling and incentivizing. The Sustainability Action Center aims to engage and equip value chain partners with tools to undergo their own sustainability journey.