Back in January we wrote an article covering “play-to-earn” games: what they are, are they worth investing time and money into, and what on earth is an NFT? The future of NFTs in games looked pretty grim back then, at least for anyone actually into games and not just interested in investment schemes disguised as a Pokémon or Roblox clone. Now, it looks even worse.
For starters, check out the Google Trends page for the search query "NFT." Last year, it was nigh impossible to use the internet without hearing about NFTs. Following the initial burst of hype, however, Google searches for NFTs fell dramatically, by about 75%. Essentially, NFTs failed to retain all of the people who were interested during the boom. There are still more people searching for NFTs than before the spike in interest, but that's likely due to the few who bought in during the period of unavoidable hype.
Other NFT news also indicates a failure to retain the user base who bought in during the initial hype. Sina Estavi, who you may have heard of as the Iranian investor who bought an NFT of the first tweet made by Twitter founder Jack Dorsey for $2.9 million, has had a tough time trying to resell that NFT. He initially listed the NFT for $48 million, saying he would give at least 50 percent of that to charity, his estimate being $25 million. During the window for the auction, only seven total bids were placed, the lowest of which was around $6. The highest bid? Just $280.
Play-to-earn games with NFT integration aren't doing so hot either. Axie Infinity, one of the most popular play-to-earn games, had a massive hack at the end of last month, draining users' wallets for a collective 173,600 Ether, which converted to about $620 million at the time of the breach. Even before the hack, though, Axie Infinity was quickly losing players and value of in-game items.
Daily active players of Axie Infinity prior to the hack (credit: Bloomberg) and value chart of the AXS token which supports the Axie Infinity economy
Following balance changes to the in-game economy, players lost the ability to generate cryptocurrency tokens via many of the activities, decreasing income for players across the board. These changes needed to be made to combat the absurd amount of inflation that the Axie economy encountered. The price of SLP, another token that supports the game's economy, crashed from $.40 to $.01 in a matter of months.
However, the changes also drove away a lot of players, reducing the number of potential contributors to the game's economy, and in turn drove down the prices of in-game items. When Axie Infinity was at its prime, the cheapest Axies were priced at around $300, but now Axies sell for as low as $17. That's great news for anybody who just wants to buy in and play, but pretty bad news for all the people claiming that your NFTs are investments that help you get rich while gaming.
Decentraland is another title that frequently has its name thrown around in the discussions surrounding investment-worthy play-to-earn games. Decentraland touts itself as the "first-ever virtual world owned by its users," and allows players to purchase virtual land with cryptocurrency. Decentraland advocates point towards virtual land sales of $3.5 million or events like the Virtual Fashion Week with a performance from contentious alt-pop artist Grimes as evidence of the platform's success.
The reality, though, is that Decentraland sucks. It's barely a game, and looks like an absolute joke when compared to other "metaverse" games like Roblox, Fortnite, or Final Fantasy 14. Take Roblox, for instance. In 2021, their daily active users were an average of 45.5 million, who collectively spent 41.4 billion hours playing Roblox that year. Decentraland, on the other hand, is barely pushing 2,000 at the time of writing.
Screenshots from my time spent with Decentraland
"Wow, for a game that had an absurd amount of hype behind it just a few months ago, these numbers seem awfully low, why is that?" That could be due to the fact that, like many other play-to-earn games, it's not actually a game, just a new vehicle for speculative investment for non-gamer tech and finance bros who heard the video game industry was worth about $200 billion. It might sound like I'm being awfully uncharitable to Decentraland, but in case you haven't clicked on any of the images or video links to see just how barren and undeveloped Decentraland is, take it from Andrew Kiguel, the executive chairman of the Metaverse Group, a virtual real estate firm.
“I’d say 15 to 20% of Decentraland is developed,” Kiguel said in an interview with global tech publication Rest of World. “Generally, [the approach for investors] has been to buy and speculate that it goes up.”
This means that a solid majority of Decentraland landowners just purchase the land and do absolutely nothing with it. It's impossible to tell how many of those landowners actually regularly play the game, but Kiguel's estimate sure makes Decentraland Foundation's claim that it is "owned by its users" seem silly.
Another piece of NFT news that really highlights the stark gap between gamers and P2E tech opportunists regards Ubisoft Quartz. Quartz is Ubisoft's NFT platform, and it was initially launched to sell exclusive cosmetics as NFTs in Ghost Recon: Breakpoint. Ubisoft minted over 6,600 of these NFTs, clearly anticipating high demand. As of the time of writing, they have sold a grand total of 26. Those 26 sold for a collective 266.49 XTZ, the cryptocurrency based on the Tezos blockchain. Currently, that converts to $846.04. While sales remain open, Ubisoft hasn't sold an NFT in two months.
Just a week ago, Ubisoft announced that they will not be making any further updates to Ghost Recon: Breakpoint. While the servers will remain up, Breakpoint will never again receive any new content. While it's possible that Quartz killed Breakpoint, the signs point to the NFT sales being a last-ditch cash grab for a dying game.
Regardless of the abysmal sales for Ubisoft Quartz, Ubisoft plans to continue making and selling NFTs for future games. They aren't alone, as Konami has already begun selling NFTs, and Sega and Square Enix have vague plans to move in that direction. Gamers have already made it abundantly clear that they don't want the NFTs, have no intention to buy them, and intend to boycott games with NFT integration. Here's hoping all these NFT initiatives fall through and I get to come back in three months with another one of these articles.
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