Comment by 2pEXgD0fZ5cF | Hacker News Reader

Comment by 2pEXgD0fZ5cF | Hacker News Reader

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One of the "examples" for NFT that I see most often repeated is the following:

The usage of NFTs in games. Using them to let the player "own" their character customizations and ingame items in order to resell them and carry them over to other games. This is presented under the banner of decentralization with the result that no one could take away these ingame items from the buyer ever again.

This example is a gross misreprentation of how game transactions and game assets work:

1. The only thing an NFT would enable is the ability to show that you own an item in a game. The only change is that the necessary bit sits on a blockchain instead of the server of the game company you bought it from.

2. Ingame assets need to be created by the developer of the game in order to be in the game...there is no inherent compatibility between two different games, especially if the games are from two different companies. And the NFT does not contain the asset itself, that is: The 3D model, its texture, its game logic attached to it (the things the asset is supposed to do).

3. Because of 1. and 2., the only authority over wether you get to use an ingame purchase is the game developer/publisher of the game in which you wish to use the asset. The fact that you can show your ownership does not change anything about that at all. If Company A decides to ignore your ownership bit (in the end you still play on their servers) they are free to do so at any point, the player does not have the slightest bit of additional "power".

4. If you show your ownership bit of an ingame asset that you bought from Company A to Company B, they have to build it into their game (model, textures, logic, basically copy these things from Company A) and give you the ability to use it. In order for this whole NFT dream to work as advertised Company B has to perform this work for free if you ever want to use it there.

> I am flat out convinced that most people who buy into the NFT hype are gullibe at best, and a fraud at worst.

The aspects I described above are immediately obvious if you remotely know how game development works. That is the reason I can only come the conclusion that the people pushing this NFT narrative are either really clueless about technology, very gullible, or intentionally trying to deceive others to inflate the prices of this scheme.

In short: I agree.

> with the result that no one could take away these ingame items from the buyer ever again

That is one result, the bigger picture is that the strategies centralized owners of those items use to make profits at the expense of each user would go away.

You are correct that an issue exists between completely hard-coded ownership on the blockchain and subjective creation of items in a game, but perhaps ruminate over some roadblocks. If a 'set' of items represented by NFTs is valued by a large group of users, then developers which do not integrate those items fairly enough will suffer users.

In this case it will not be the game developers controlling the items, it will be artists who sell the raw NFT which becomes integrated. This leads to all sorts of other little issues that aren't as fun to dunk on, but you should at least steel-man the concept.

Furthermore, your example of cosmetic items is the weakest example. Items which offer in-game functionality first and foremost, and are released according to semi-predictable mechanisms are the stronger case. Just like Bitcoin prevents unwanted malicious activity from allowing forks, so to must the game(s) which use these items. I'm not convinced it's so impossible to have an open source game built around the items rather than the other way around. An extremely simple RPG is a MVP.

Of course the visible community around NFT's today is completely ill-fitted for such a project, but like all things crypto on HackerNews, detractors often mistake the loudest sales-pitch for the best possible outcome. If you want to make a strong case against the merits of crypto, focus less on projects who spend their effort on marketing and more who spend their effort on development.

> That is one result, the bigger picture is that the strategies centralized owners of those items use to make profits at the expense of each user would go away.

It's the opposite. No real game developer would ever make assets tied to NFTs that have already been sold because they can't make any profit from that. The only thing the NFT provides is transferability, which most game developers also wouldn't want to support. The company makes more money if all consumers have to buy the same items separately. They build in scarcity by removing transferability.

Some companies might use NFTs to sell things no one would buy otherwise (like Disney selling pictures of R2D2), but that's pretty much the only use case for them.

No game developer would do it for free, correct, but they wouldn't be able to centralize those items around their control. The game itself would have to make money, and the items being operable with the game without too much cost (that's why I said "fairly enough") would attract users to the game which may be monetized in other ways.

As for your other points they were already addressed. Did you read my whole comment before finishing yours?

Sure, that works in theory. If you basically magically change the whole gaming market landscape in a fundamental way.

In your point you are basically leaving out many steps:

> If a 'set' of items represented by NFTs is valued by a large group of users

Good thing you mention this, we don't have to speak hypothetically to evaluate this. Highly valued assets on a gaming marketplace already exist with Steam Marketplace, where you can buy and sell virtual items from games that exist on Valves Steam Platform (Steam offers an API for this and developers can support the feature if they choose to do so). Items for e.g. Dota 2 have been sold between players for >2000$ on the Steam Marketplace, I believe this deserves being called highly valued by a large group of users.

The Steam API offers the ability to check a users inventory [1], so any game that is on steam could verify your ownership of a marketplace item and do something using that knowledge. Steam is a huge platform, so huge in fact that for many players Steam is PC Gaming, right now it sits at ~23 million active players (that is only players that are currently playing any game they own via steam).

Now let's go back to NFTs. What would they change? Basically connecting them to games somehow would be just the same thing, which is verifying ownership of items outside of Steam.

"Outside of steam" is not all that many players and it is very hard to get them away from there, just look at the struggle of Epic to pull users away from Steam: they have now been giving away >250 games (including many AAA titles) for free since 2018 [2]. And Valve has made its stance on NFT/Crypto pretty clear for now [3].

I believe that this puts into perspective how realistic the NFT gaming revolution is.

> Items which offer in-game functionality first and foremost, and are released according to semi-predictable mechanisms are the stronger case.

Those, in my opinion, would be even harder to carry across games because they are even further embedded inside the engine and programming and logic.

> In this case it will not be the game developers controlling the items, it will be artists who sell the raw NFT which becomes integrated.

So if I understand you correctly you believe in a market of NFT driven games that explicitly form around NFTs, rather than NFTs finding their way into the existing gaming market?

[1]: https://partner.steamgames.com/doc/api/ISteamInventory#GetAl...

[2]: https://www.pcgamer.com/epic-games-store-free-games-list/

[3]: https://www.theverge.com/2021/10/15/22728425/valve-steam-blo...

Right, I think you make a lot of good points which I (for some reason) had to remind some friends who have spent money gambling for skins in games that virtual items can indeed have sustained high value appraisals from large groups of users. From a user perspective (assuming the NFT's were on a chain with reasonable tx fees), liberating one's Steam inventory would likely be a net positive depending on the player (some are susceptible to scams and would do better to remain in Valve's safer, slower system). Being able to trade skins directly for money to anyone with no third party and no corporate tax rate would be great.

The issue of course is that Valve has no reason to do this, and this is important, because a huge part of the reason in game items have dollar value is that they have aesthetic value in popular, well crafted games. Anyone who makes a quality video game will seek to monetize their in game items, not liberate them through NFTs. For this reason I am indeed saying that NFTs and their properties have to be a selling point.

This means that game developers make their money up front on the initial minting or selling of the NFTs (hoping that the real promise of a forever more decentralized market adds a premium - this should also include a promise of no future releases or algorithmic/predictable future releases), or the NFTs existed before the game and were valued enough that integrating them into a game after the fact is somehow profitable. Its certainly an interesting space (will be a lot more interesting when volume flows across cheaper chains than PoW Ethereum).

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