Ubisoft made a big splash in the world of blockchain gaming this week with the announcement of its Quartz platform for in-game non-fungible tokens. It was, perhaps predictably, met with a fair amount of fan backlash over the publisher’s perceived financial motivations and the general divisiveness of NFTs in both the gaming industry and the broader worlds of digital art and entertainment.
The YouTube announcement, though it was delisted to start and embedded on Ubisoft’s Quartz announcement website, racked up tens of thousands of dislikes. The YouTube platform now hides dislikes, but browser extensions can for the time being reveal them, and the announcement produced an overwhelmingly negative response on Tuesday. (Ubisoft confirmed to Protocol that the video was never listed and then delisted in response to criticism, as some reports claimed.)
But Nicolas Pouard, the vice president of the publisher’s Strategic Innovation Lab that conceived Quartz, wants players to have an open mind about NFTs and blockchain gaming. He clarified that players won’t have to spend any money – they only have to have played the game a certain amount of time – to collect the first three cosmetic NFTs debuting Thursday in the shooter Ghost Recon Breakpoint. Ubisoft also doesn’t plan on taking a cut or even operating the marketplace that would facilitate buying and selling them later.
“Ninety percent of the people now saying you can do the same with older technology, they haven’t tried [blockchain gaming],” Pouard told Protocol in an interview, when addressing skeptics who have pointed out how aftermarkets for unique in-game items have existed in the past without blockchain technology. He said such markets were often rife with scams and abuse, and there is little oversight or protections because players trying to turn a profit are repurposing in-game currency and items in ways they were never designed to be used.
“It's not enough to disregard what they’re saying. We have to respect what they’re saying. There’s real concern,” he said. Still, Pouard thinks many of the critics aren’t paying enough attention to the players who are already engaging with NFTs and the communities they are forming around them. “For people who don’t believe in it, just start by trying it,” he added.
The promise of NFTs, which can denote a piece of data like an image file or in-game item as a one-of-a-kind collectible, is creating a major boom in the game industry. Rare virtual items and collectibles have for years accrued significant cultural and real-world value among players of massively multiplayer online games and other similar titles. As a result, gray and black markets for item trading and currency farming, often unsanctioned by the game’s creator, have sprouted up around popular games like Blizzard’s Warcraft and Diablo series and Valve’s Counter-Strike and Team Fortress games.
But the blockchain, thanks to its decentralized nature and public ledger, may create all-new legitimate markets for buying, selling and trading such items free of control from any one developer or corporation. Proponents of blockchain gaming also imagine, for example, interoperable inventories where your items in one game can be brought to another or used in a unique experience outside the game they originated in. The idea is that the players themselves would be able to own these items for good and ultimately profit off them, instead of just leasing the digital rights to them in a controlled environment they have no financial stake in.
That’s the ideal, at least, and an enormous new market of blockchain gaming startups pioneering new business models like play-to-earn have sprouted up over the past few years to try and fuse cryptocurrency, NFTs and related technologies with video games. According to investment firm Drake Star Partners, blockchain gaming startups attracted nearly $2 billion private financing in the first nine months of 2021, with fast-growing companies like NFT marketplace OpenSea, Top Shots creator Dapper Labs and Axie Infinity developer Sky Mavis all earning multi-billion-dollar valuations of late.
Yet skeptics are concerned the biggest players in the game industry, with its history of adopting predatory monetization and nickel-and-diming consumers with microtransactions, may misuse the blockchain to their own benefit. Notably, Steam owner Valve banned games featuring NFTs and cryptocurrency from its digital store in October, though it has given very little clarity as to why.
“Not only is this ethically dubious but there's no practical reason to implement NFTs into your game. Certainly not for buying/trading ‘unique’ loot,” wrote Harper Jay MacIntyre, community manager at Microsoft studio and Psychonauts creator Double Fine, in a now-viral tweet about Ubisoft’s Quartz. “It's a scam. The more people in our industry who are willing to say so publicly, consequences be damned, the better.”
MacIntyre’s comments echo that of their boss, Xbox chief Phil Spencer, who has emerged as one of the very few high-level game industry executives to cast doubt on the promise of blockchain gaming. “What I’d say today on NFT, all up, is I think there’s a lot of speculation and experimentation that’s happening, and that some of the creative that I see today feels more exploitive than about entertainment,” Spencer told Axios last month. “I think anything that we looked at in our storefront that we said is exploitive would be something that we would, you know, take action on. We don’t want that kind of content.”
Pouard said Ubisoft isn’t just diving in now because there’s money to be made, and that its decision to launch Quartz was to finally have a formal product launch after many years of experimentation in the space. Ubisoft’s Strategic Innovation Lab has in fact been dabbling in the blockchain gaming space since 2017, with partnerships with crypto companies, investments in blockchain gaming startups and even prototype products.
“For us, as we started four years ago, it was less trendy,” Pouard said. “We did a lot of hackathons and partnerships, and worked with a lot of startups. We’re also exploring a lot of the infrastructure to understand the opportunities and limits of the blockchain today.” Pouard said Ubisoft helped form the Blockchain Gaming Alliance in 2018 as a founding member, and the organization has since grown to more than 300 companies.
Pouard said that for Quartz and its first product line, the Digits in-game cosmetics in Ghost Recon, is more of an experiment than anything else. “For us, Quartz is really a test. We really want to understand what decentralization can bring to players,” he said. “We want to build this value proposition with the community so we needed to start with something easy to understand and easy to build technically.” That’s why Ghost Recon, with its built-in set of cosmetics, was chosen as the debut game for Quartz.
“We think it’s the best moment to start,” Pouard said. “We know we’re a bit ahead of the curve here.” Pouard pointed to Minecraft and the game’s immense influence on game-making platforms like Roblox as one reason why Ubisoft wants to get in early. “We’re pretty sure that with the blockchain, the same thing could happen,” he said. “We don’t want to turn our heads away from it.”
The team at the Strategic Innovation Lab followed Ubisoft’s new set of blockchain principles, Pouard said, that include building products that can be used in-game, using energy efficient blockchain partners (Quartz is built on Tezos, which uses a so-called proof-of-stake system that supposedly wastes less electricity), and creating a safe environment for players to learn about the blockchain and NFTs. To that last point, Pouard said players must be 18 years or older to create a Tezos wallet for use with Quartz and that it doesn’t intend to take a cut of any transactions right now.
Pouard acknowledges that Ubisoft doesn’t need the blockchain to create a unique item like those featured in Digits, but the goal, he said, is to get players invested in the space and for Ubisoft to start exploring what can be built alongside its player community. That’s why he said there’s no real business model attached right now. Ubisoft is also open to other companies building integrations with Quartz and using the NFTs in new ways, as well as allowing existing or new marketplaces to facilitate the buying and selling of them.
“First, we’re a game developer and publisher, so it’s not that obvious that it’s a good way for us to go. We want to co-build and create the value proposition,” he said. “We’re seeing how it goes and how the players use it and what we can do with that. We are very early in this paradigm shift, so knowing what will be the business model of the future … it's too soon to say.”