Join gaming leaders online at GamesBeat Summit Next this upcoming November 9-10. Learn more about what comes next.
In the last few weeks, multiple major gaming publishers indicated that they are investigating blockchain gaming and non-fungible tokens (NFTs). Companies like Ubisoft, Electronic Arts, Square Enix, and Zynga have all explicitly stated their intention to investigate the space. But what games will these efforts bring us? Well, probably games that look a lot like what we have today but also attract the attention of the IRS.
Or, at least, that is how Forte chief executive officer Josh Williams put it during a panel at the GamesBeat Summit Next conference today. Forte is a company that can provide infrastructure for blockchain games. And when explaining what kinds of services his team can provide, Williams emphasized the importance of a familiar purchasing experience for players.
“If you try to buy cryptocurrencies or NFTs today, generally it’s a complicated experience,” said Williams. “It’s not what game players are accustomed to. So we spent the last few years making the experience seamless. Developers can add a white-label wallet … that lets players purchase token currencies and token assets — including NFTs — and use those in game in the same way that they purchased virtual currencies and virtual goods in games today.”
So a key goal for Forte is to enable game creators to replace current virtual economies with one powered by NFTs. And what does this get the studio and the players — well this is where the attention of the IRS comes in.
Three top investment pros open up about what it takes to get your video game funded.
“In the U.S. and all around the world, if players own real value inside a game — and they can trade goods and services with each other to the point that they’re sending value through the global economy — then that constitutes a regulated activity in many jurisdictions,” said Williams.
This is a problem that Forte also promises to help developers with.
Why attract the IRS if games already have virtual economies?
The first followup question that most developers, publishers, and gamers are going to have is obvious: why would anyone want to play a game where you have to fill out tax paperwork?
And maybe that isn’t a fair characterization of how it will work, but it’s a fear that many investors and players will have about the prospect of blockchain gaming. On top of that, why would a developer want to attract attention for features it could almost entirely replicate through non-crypto methods? This is where the incentives may outweigh the risk.
In terms of game design, NFTs aren’t really promising all that much new. At least not today. What they do seem to enable is the ability to create a self-propelling and ever-increasing revenue stream that players drive.
The upside of NFTs is extreme. If a developer sells a tokenized in-game item for $5, it doesn’t just get that $5. It would, under most blockchain-gaming systems, then also get approximately 10% any time that NFT sells in the future. So if that $5 item sells for $100,000, the developer makes $10,000 more off that piece of gear.
The player that is taking home $90,000 is key, though. That speculation fuels the entire ecosystem and would, ideally, attract even more attention and speculation.
A lot of people should get very rich doing this. Of course, that’s the point — as you will notice, none of this has anything to do with building entertaining games. In an NFT, blockchain-gaming world, fun games are obsolete.
GamesBeat’s creed when covering the game industry is “where passion meets business.” What does this mean? We want to tell you how the news matters to you — not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. How will you do that? Membership includes access to:
- Newsletters, such as DeanBeat
- The wonderful, educational, and fun speakers at our events
- Networking opportunities
- Special members-only interviews, chats, and “open office” events with GamesBeat staff
- Chatting with community members, GamesBeat staff, and other guests in our Discord
- And maybe even a fun prize or two
- Introductions to like-minded parties