There’s a platform war brewing in NFT gaming. Here’s what it means.

Valve's NFT ban has created the makings of a platform war in the burgeoning blockchain gaming space.

An image from Axie Infinity

Play-to-earn is a whole new paradigm, based on creating real-world value out of in-game items and other forms of digital goods using non-fungible tokens, cryptocurrency and other blockchain technologies.

Image: Axie Infinity

The worlds of crypto and video games are fast colliding. The combination, dubbed "play-to-earn" and more broadly part of the decentralization movement known as "web3," could result in a whole new generation of gaming experiences with real-world economies and new player incentives. This, in turn, could radically upend traditional business models in the game industry.

That is, of course, if the traditional platform gatekeepers in gaming decide to open their doors. Right now, many of them are shut, leaving these games in their corners of the internet, and it's not clear what it might take to get the most powerful companies in the industry to open their arms to these new technologies. Meanwhile, the blockchain gaming market has become one of the fastest-growing segments in the game industry, and it's showing no signs of stopping.

In the beginning, games were pay-to-play, built with quarter slots and arcades in mind. Decades later, through experimentation and pioneering business models, we now have free-to-play, too, which monetizes through an in-game economy of digital goods — Fortnite dances and Genshin Impact skins, for example — tightly controlled by the developer.

  • But play-to-earn is a whole new paradigm, based on creating real-world value out of in-game items and other forms of digital goods using non-fungible tokens, cryptocurrency and other blockchain technologies.
  • This development, if it catches on, could help form the foundation of the sought-after metaverse that so many social media and gaming firms now seem intent on creating. Mark Zuckerberg thinks even the market for virtual clothing in our metaverse future could become a billion-dollar idea.

Crypto is coming for the gaming market. These play-to-earn titles are at first blush just the latest buzzy NFT hustle, as crypto enthusiasts, startups and investors apply the conceptual framework of a non-fungible token to all manner of digital goods.

  • The idea is simple: Instead of buying a game outright or funneling money into a free-to-play title, the game would actually pay you to play it, with built-in incentives to reward your time and often a small financial stake in the company that makes it.
  • By playing such a game, a player can be awarded unique items with verifiable ownership that can then be traded, bought or sold. This is where the blockchain and NFT components come in, as these items have unique identifiers that ascribe to them a variable value, like a supply-constrained good or piece of art.
  • Typically, the exchange is for cryptocurrency operated by the game itself, as is the case with the Pokémon-like play-to-earn platform Axie Infinity, the parent company of which has a valuation of $3 billion after a series B led by Andreesen Horowitz earlier this month.
  • In that way, these gaming NFTs are no different than those created from pieces of digital art, trading cards or other forms of online collectibles that have been swept up in this year's crypto gold rush. But gaming NFTs do interfere with existing game economies, a select few of which already allow real-world trades of in-game goods (though many game makers forbid it).

Valve entered the ring earlier this month, and things have gotten messy. The company, which operates the dominant PC gaming marketplace, quietly issued a ban on "applications built on blockchain technology that issue or allow exchange of cryptocurrencies or NFTs." The company, normally tight-lipped, had nothing more to say on the matter.

  • A Steam ban on blockchain technology all but ensures play-to-earn games won't break into the mainstream, at least not anytime soon.
  • Because no company has yet worked out a mechanism to distribute such software through Apple or Google's app stores, there are few alternative avenues to reach new players outside sideloading on Android or traditional desktop apps, both of which require players to seek out the game on their own.
  • There exists the potential that Apple and Google could allow such games; neither has explicitly banned them. But right now, not even Axie Infinity is available on mobile app stores, though the game's creator intends to try and publish the game on mobile phones in the next few months.

Valve's decision has created a rift in the game industry. Epic, always eager to undermine its rival, stepped in and said it would support blockchain gaming, despite CEO Tim Sweeney's insistence just weeks prior that NFTs and similar ideas were a breeding ground for scams and fraud.

  • Sweeney said Epic welcomes "innovation in the areas of technology and finance," and welcomes blockchain games so long as they "follow the relevant laws, disclose their terms, and are age-rated by an appropriate group."
  • A consortium of blockchain and NFT gaming companies has now issued an open letter to Valve calling on the company to reverse its decision. Valve has yet to issue any official comment on the matter, though it rarely speaks out on policy or moderation issues despite a number of controversies over the years.
  • "Games that utilize blockchain technology and web3 token-based technologies like DAOs and NFTs can positively enhance the user experience of games, and create new economic opportunities for users and creators," the letter reads.

The NFT gaming boom is coming, one way or another. The questions now are how big can the market get without traditional platform support from companies like Apple, Google or Valve, and what will it look like in a gaming environment where even Epic, who stated support for blockchain in gaming, isn't incorporating NFTs into its own products.

  • Axie Infinity is a good example of where this might be going in the near term. The game, run by Vietnamese startup Sky Mavis, has a complex economy involving two currencies used to breed new "Axies," or effectively fictional creatures not unlike Pokémon that are stored on the blockchain. Those currencies can be earned through battling Axies or selling the ones you have.
  • Axie Infinity has effectively propped up an all-new cryptocurrency through a unique game system, and it's now growing fast and earning those who invest in its economy thousands to sometimes millions of dollars.
  • It's easy to see why investors are interested. According to investment firm Drake Star Partners, of the record $9 billion in private financing raised in the first nine months of 2021, $1.8 billion of that was for NFT-related gaming projects. Every day it seems new companies are popping up, investments are pouring in and more-traditional companies are hopping on the NFT and blockchain gaming bandwagon.
  • "Axie embodies a new generation of games, where game creators are not operating from a place of fear but rather as an open, free market economy that allows players to move freely in and out of," explained Andreessen Horowitz general partner Arianna Simpson earlier this month. "The new model allows gamers to actually own aspects of the game and benefit from their contributions, as the game becomes more successful and more popular."

It's inevitable that blockchain technology and NFTs in particular will become an integral part of the game industry in the future. But there's plenty of legitimate concern today about whether those ideas should be unleashed fully, with little to no regulatory scrutiny or oversight, onto an industry already rife with exploitative monetization and addictive game mechanics. That's not to mention the scams, fraud and other financial concerns that arise when dealing with volatile cryptocurrencies that can create or destroy sizable fortunes in a matter of hours.

That Valve thinks it's too early is a predictable move from a large, traditional marketplace, as it's likely Valve's approach may set the standard for Apple, Google and others to follow. That won't kill the blockchain gaming movement by any means. Games like Axie Infinity have proven that the trend is much larger and more organic than previously thought and doesn't have to depend at all on access to any one platform. But such stonewalling could slow the adoption of these games and provide substantial roadblocks to their mainstream acceptance, while also giving Epic a rare and much-needed point of leverage against Steam and its counterparts in the mobile market.

"The narrative from those walled gardens regarding blockchain technologies is similar — it's either not in line with their core model, or the technology is simply labeled a larger risk," explained SpacePirate Games CEO Chris LoVerme, whose company first widely publicized the Steam ban, in a statement. "The future of gaming is decentralized player owned assets, where gamers are valued for their time and efforts spent in-game. Whether that's an NFT or another asset class, change is happening."

Protocol | Enterprise

Meta thinks it can now use smaller data sets to flag Facebook content

Despite the constant deluge of content flowing into Facebook and Instagram, Meta has struggled to get enough data to train AI to spot harmful content, so it’s banking on an emerging approach.

Meta plans to announce that few-shot learning shows promise in its constant battle to weed out disinformation or other content that violates its policies on Facebook and Instagram.

Image: Meta

After a terrorist attack on a mosque in Christchurch, New Zealand was livestreamed on Facebook in 2019, its parent company, now called Meta, outfitted London police officers with body cams while they conducted terrorism training. At the time, Meta said there wasn’t enough video data to train its artificial intelligence systems to detect and remove violent content, so it hoped the body cam project would produce more of that scarce AI training data.

A year prior to that horrific incident, the company acknowledged that it failed to keep up with inflammatory posts from extremist groups in Myanmar. Again, it said the problem was a lack of data — there wasn’t enough content in Burmese to train algorithmic moderation systems to spot more of it.

Keep Reading Show less
Kate Kaye
Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign ’08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

In a tight labor market, businesses are competing for top talent, even as employees leave in droves. A record 4.4 million Americans resigned in September 2021 — the highest on record for nearly 20 years — ushering in what some call the Great Resignation. That same month, 65% of U.S. workers said they were looking for a new job.

Business leaders have to respond to mitigate the negative impacts of this disruptive churn, with 36% of CFOs saying they're very concerned about turnover remaining high indefinitely and weighing on revenue growth. The answers to this challenge should be informed by the root causes of employee dissatisfaction as well as retention drivers.

Keep Reading Show less
Suneet Dua, PwC
As PwC’s US Products & Technology Chief Revenue and Growth Officer, Suneet Dua is responsible for driving more than $1 billion in product revenue and executing PwC’s product revenue strategy. He’s focused on driving innovation, delivering world-class, forward-thinking products and digitally upskilling the workforce and society at large. With 20+ years of technology, media and entertainment industry experience, he’s positioned as a catalyst for organizational transformation and delivers on the firm’s promise to solve the world’s most important problems. Additionally, he launched Salesforce and client-focused centers of excellence, such as our Cybersecurity centers in Israel, Singapore and India––all to improve the way PwC serves its clients. During his tenure as US Chief Product Leader, Suneet, and his team, played a critical role in designing and implementing digital tools that upskilled more than 55,000 of its US employees, which led to the development of PwC’s digital learning platform, ProEdge, that addresses the digital skills gap crisis facing today’s workforce. He also serves as a board member of PwC’s Trifecta Consulting (US, China, Japan and Mexico). Previously, Suneet served on PwC’s US leadership team and was Global Client Market Leader for PwC’s Global Network.
Protocol | Workplace

What will work look like in 2022? Glassdoor makes four predictions.

Tech companies will continue to have trouble hiring workers.

According to a report from Glassdoor, local companies will also have to pay more to compete with companies that are offering San Francisco or New York rates to remote workers.

Photo: MoMo Productions/Getty Images

2021 was a difficult but pivotal year for tech workers and employers alike. We’ve got mixed news: 2022 will likely continue to be difficult but perhaps a little more, well, precedented.

Glassdoor released four predictions for the workplace of 2022 Wednesday based on data it gathered from reviews, salaries and conversations happening on its site, as well as economic trend data. Here’s what the career platform sees in the workplace crystal ball.

Keep Reading Show less
Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at mma@protocol.com.

Protocol | Enterprise

COVID-19 kickstarted a war over web accessibility

The pandemic spurred demand for a more accessible web, but experts and practitioners disagree on the best approach to get there.

Experts and practitioners disagree on the best approach to building an accessible web.

Image: alexsl/Getty Images

The pandemic triggered a surge in demand for technology that helps companies adapt their websites for users with disabilities as businesses scrambled to accommodate customers who were now forced to do almost everything online.

This period gave a boost to companies such as AudioEye, EqualWeb and Deque, which offer accessibility services like alternative text that describes images for visually impaired users. But it also sparked a war over the best way to build a more accessible web, with one side arguing the fastest way to achieve change is to put accessible overlays onto existing sites, and the other arguing the web will never be truly accessible until developers build it that way from the start.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporting fellow at Protocol, based out of Los Angeles. Previously, she worked for Ernst & Young, where she researched and wrote about the future of work, emerging technologies and startups. She is a graduate of the University of Southern California, where she studied business and philosophy. She can be reached at acounts@protocol.com.

Hirsh Chitkara

Hirsh Chitkara (@ChitkaraHirsh) is a is a reporter at Protocol focused on the intersection of politics, technology and society. Before joining Protocol, he helped write a daily newsletter at Insider that covered all things Big Tech. He's based in New York and can be reached at hchitkara@protocol.com.

Latest Stories
Bulletins