As Square Enix looks to follow Ubisoft's suit into NFTs, what does the future of video games hold?

Square Enix president Yosuke Matsuda came out with an open letter on January 1, going over the company’s plans for the coming year. It consists of a farrago of buzzwords like Metaverse, NFT, and blockchain technology.

The last month of 2021 saw the start of this trend in the video game industry as Ubisoft, and then GSC Game World (the team behind Stalker 2), laid out their plans regarding the implementation of NFTs into their games.

While GSC Game World eventually backtracked on their decision after facing huge backlash from fans, Ubisoft went ahead with their NFT plans with Ghost Recon Breakpoint. While the announcement of Ubisoft’s “Quartz” program was the recipient of intense negative community responses, the actual products have not seen many sales and have been mostly ignored.

In this light, Square Enix’s decision to come up with the contents of this letter seems baffling. Will more video game publishers dare to go the same route?

Note: This article reflects the writer's personal opinion.

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For better or worse, many bigger game publishers will follow Ubisoft and Square Enix's example in terms of NFTs

The impetus to adopt NFTs for big video game corporations, after all, comes down to the money question. With user-generated content (UGC) and “play to contribute” as driving factors, it is the customers who will be essentially paying for the game, and keep on paying to keep the game running.

The loot box controversy is a thing of the past. However, NFTs most certainly seem like a much more cranked-up version of predatory microtransactions that have been present in several AAA games in the last decade. This portion of Square Enix president Matsuda’s letter is especially relevant here:

“I believe that there will be a certain number of people whose motivation is to “play to contribute,” by which I mean to help make the game more exciting. Traditional gaming has offered no explicit incentive to this latter group of people, who were motivated strictly by such inconsistent personal feelings as goodwill and volunteer spirit.”

This is quite reminiscent of the controversy involving Bethesda and Valve regarding paid mods. There are a significant number of game communities that have thrived over the years, thanks to user-generated content and mods - with Minecraft, Skyrim, Fallout, Mount & Blade, and Stardew Valley being cases for this point.

So, implementing an ecologically harmful technology such as NFT just to gratify third-party asset creators is a moot argument.

The wider gaming community has not been kind to Square Enix, quite similar to how everyone reacted to Ubisoft and GSC Game World in the past month. However, looking at how things are panning out in the video game industry, more and more AAA game companies will look to monetize their upcoming games utilizing blockchain technology and other similar stuff.

Sega has shown reservations about NFTs in the recent Sega Sammy Holdings management meeting, mentioning the fear of negative reactions from fans. Earlier in 2021, the company faced quite a strong backlash from Sonic the Hedgehog fans when they came up with their plans regarding NFTs.

Regarding game storefronts, Valve has taken a clear anti-cryptocurrency stance, as Steam has put a blanked ban on all games involving cryptocurrency or NFT. On the other hand, Epic Games Store has recently announced that they are open to NFT games.

Coming to Square Enix’s case, the irony is strong, as all this crypto talk is coming from the company that made Final Fantasy VII, a game so iconic for its strong anti-capitalist message. Though some companies, like Square Enix, have arrived at an NFT decision, others are yet to make a decisive move.