Words: 2420 Approximate Reading Time: 15-20 minutes
Note: Some minor changes have been made in light of additional information regarding how the Ubisoft Quartz NFTs work.
I used to play a lot of Destiny and Destiny 2, but eventually fell off of each for a variety of reasons. I recently got back into Destiny 2 due to finding some people to potentially play with, and the changes I’ve seen to the game have sparked thoughts about how games market themselves to players.
I want to eventually do a longer dive into this subject more broadly, but the work that will be needed for that is more than I can do at the present moment. So instead I want to focus on a narrower topic.
On December 7th, 2021, Ubisoft announced a new program called “Quartz” that would allow players to purchase special items to use in Ubisoft games – starting with it’s current entry in the Ghost Recon series, Breakpoint. These items were to be created as “NFTs” that allowed players to both have a unique item that was specifically tied to their account, and which gave players a degree of control over the item – namely, they could end up selling the item on a market to other players, who could then have the item tied to their account, and so on and so on.
The announcement was met with a lot of negative feedback. It’s not clear how much this feedback reflects overall feelings (i.e. to what extent players who watch these kinds of announcements and react to them are representative of all players), but the backlash was definitely something: by all reports, 96% of viewers disliked the announcement video.
I thought it would be useful to examine this announcement from Ubisoft more closely to understand what the company is doing, why they’re doing it, and ultimately, why it’s bad.
The NFT Craze
So to step back for a moment, we first need to identify what this “NFT” thing is.
“NFT” stands for “Non-Fungible Token.” These tokens exist within a blockchain database that provide a unique marker for ownership: the token belongs to the person who possesses that marker. The uniqueness means that you can’t just replace it with something else – that is the “non-fungibility” part of the name. As a point of comparison, if you have a physical item, like a pen, that pen could be replaced with any other pen just like it – at the end of the day, you still have a pen. The pen is not unique. A pen could be made unique, such as by being signed by a famous author. But the pen isn’t itself supposed to be unique.
Now imagine a digital image. You draw something and mint 50 tokens of that drawing. Each token is attached to a particular instance of that drawing. Or more appropriately, it is attached to the ownership of that instance of that drawing. It is, in theory, the same as drawing the same thing 50 times and then selling each drawing: if you buy one, you now own that drawing too. The difference is that there is not necessarily a guarantee that the image itself be accessible or maintained for the buyer. If you buy a physical drawing, you have a drawing that won’t just disappear because nobody is paying upkeep costs on the frame; if you buy an NFT, your ability to access the drawing is going to depend on the drawing being hosted somehow, and if whoever is hosting the image stops paying for the server, then the content goes away.
So an NFT of a drawing doesn’t exactly work the same way as buying that drawing itself. For example, it’s quite easy to copy a digital image, much easier than a physical image. The key to an NFT is that while you can possess that image by copying it, the token confers ownership: you can point to the image and show the associated token and say that you own the image. The extent to which that ownership is useful compared to the ability for anyone to possess the image is a subject for a different discussion.
There are some theoretical benefits to NFTs, especially as a way for artists to support themselves. There are also plenty of drawbacks to NFTs. Generally, the drawbacks have been outweighing the benefits, especially as NFTs are abused by people looking to make quick money.
So now to dig down a bit deeper, let’s talk about the basic economics of NFTs and “blockchain.” We’re not going to deal with the technical aspects of these things, but instead about how they’re treated by actual consumers.
And the treatment is generally as a form of investment. People purchase an NFT not because they want to own a piece of art, but because they want to try to sell it off to someone else for more money later. This concept isn’t unique to NFTs, but it is the primary draw of these tokens for purchasers: you can get rich if you play your cards right.
The inherent problem, of course, is that as an investment buying these tokens only makes sense if you can find someone else to pay more money than you paid for the token. Which means either the token needs to become more valuable, or you need to make people think that the token has become more valuable. I mention the latter element here because it fits into how we often witness people in the NFT game talking about NFTs themselves: someone has bought several tokens and talk about how much money they’re going to make and how the tokens they have are going to shoot up in value, and all of this is in service of that goal of finding a buyer. If you make things seem interesting and valuable, eventually people will start to think that the thing is interesting and valuable.
So take this extremely complex element of technology – itself already tied up with a complex technology that has already been part of a craze for years – and then add in the promise of making money. And not just that, but anyone can make money, if you just act fast.
So it is no surprise to see so many companies trying to get in on the craze in various ways. There are new studios popping up promising to build games that center entirely around NFTs. There are famous authors who attempted to form a collaborative fiction project with NFTs being a special buy-in for participants. And now you have Ubisoft. They were not the first, and will most certainly not be the last.
Leaning into the Craze
So the reason I bring this NFT discussion up in the first place is that it is a useful reflection on how companies engage in manipulation.
Take the first question: why even do this?
The promise of Ubisoft Quartz is that players can get special tokens attached to gear. You get a gun, and the gun has a special ID number which means that is your gun. There are only a certain number of those guns in the game’s universe. And the gun is only cosmetic, so it won’t affect gameplay in any way. Eventually Ubisoft will release other guns – presumably to be purchased from Ubisoft either directly to indirectly – which means you can collect these various items which will all be yours because that ownership will be recorded into the blockchain.
But that’s not all! You can also sell these items to other players, setting the price as you see fit. Which means not only can you get these special items, but you can even make money just by playing the game!
However, if you think about it, none of this is really that special. Unique items within a game could be crafted and stored without the use of blockchain – especially if the factor that ultimately makes the items unique is a number tag attached to them. And online games can already allow players to trade items or even buy things directly from other players. There’s not really anything special being done here.
So why do this if you could accomplish the same tasks without needing to make NFTs?
To which the answer is that the NFTs are the whole point. NFTs, as they exist in popular discourse, are a craze that hold the promise of making money. This is precisely why so many people latch on to these promised games built around them – if you get in early, then when the game takes off you could make thousands or tens of thousands or hundreds of thousands of dollars. So by marketing this specifically around NFTs, it draws in more players.
The end result is people spending more money on the game. While the initial set of NFTs are free (to players who play on specific days and are at or above a certain level, apparently on a first-come first-served basis), later NFT drops will likely require players to purchase the tokens directly, or may be attached to buying additional content for their game (i.e. “buy the season pass and get a free NFT”). It is a way of selling the cosmetics that games have been selling for years now, but dressed up in a way that makes it particularly appealing to some: now it’s not just a cosmetic item, but you can sell it when you’re done!
Although let’s take a look at that money-making promise. As I noted already, in order to actually pull off the “get rich” part of the NFT scheme, you actually need to find a buyer willing to pay money for the thing you’re trying to sell. It doesn’t matter how valuable you think your piece of gear is, if no one is willing to buy it, it’s effectively worthless.
This is the point, for example, of Ubisoft marketing these tokens with the idea that players can set the price for a given token at whatever they want. If you are vaguely aware of NFTs, then you’ve probably heard of them selling for ridiculous sums. Or you may have learned this after hearing this Ubisoft announcement, thinking “what is an NFT?”, and then reading up on them. Which means you know or have learned that you might be able to sell your unique gun for thousands of dollars! The implicit promise laid out by Ubisoft hides the fact that there probably isn’t going to be someone willing to pay thousands of dollars for it.
Why not? The basic problem is that there isn’t really an inherent “value” to these tokens. You might pay, let’s say, five dollars for one. But does that mean the thing is worth five dollars? That if you try to sell it to someone else, you should expect to be able to sell it for five dollars?
At the present moment, the individual items being presented as NFTs are not actually unique. The items are fairly limited in their number, but there are hundreds or thousands of the same item being dropped into the pool. Which means the value of each individual item is going to be reduced. There’s not necessarily any special significance to owning NFT Gun A #21,493 versus NFT Gun A #17,675. They are really just the same gun. So if you have tens of thousands of these guns being sold on the market, because everyone is hoping to make some easy money by selling their tokens, then the price is going to drop: why pay thousands of dollars for this gun when I could buy the same gun for three bucks?
So the only way for any given token to be special is to be hyped up in some way. A really skilled player decides to sell their gear: that player is likely to make a lot of money, because people may be willing to pay a lot of money for the prestige of owning a gun that was owned by this really skilled player (and that promise is viable, since part of the technology of the blockchain allows you to track things like who used to own a particular token). But the players that are likely to make this kind of money are going to be an extremely small minority of the entire player base. Which means you, dear reader, probably aren’t going to see those thousands of dollars. Instead, you might be lucky to buy your NFT Gun A for ten dollars and be able to sell it to someone else for five or six bucks later on.
But most players who are pulled into the craze aren’t going to realize these economic problems with these NFTs. The system is designed specifically to take advantage of them: to make Ubisoft some extra money selling cosmetic items to players by tricking them into thinking that those cosmetic items will be valuable.
And that is why the backlash against Ubisoft is so deserved. The outrage may not have come from this feeling that it is specifically a ploy to manipulate players. The outrage could instead just be annoyance that the company is focused less on providing good content to players than on figuring out how to monetize games. But we should definitely be skeptical of these moves, and angry when companies lean into these crazes.
I provide this essay on Ubisoft’s announcement perhaps as a slight warning, but more importantly as a starting point for seeing how manipulation works. It is possible that you, individual person reading this essay right now, were not fooled by Ubisoft’s attempt to separate you from your money. Perhaps you don’t know what NFTs are, but you don’t trust these companies to support players, and so obviously this was just a money grab. Perhaps you knew that these NFTs weren’t really viable, and so had no intention of buying any when they are eventually released. Perhaps you are disgusted with Ubisoft’s corporate culture which protects harassers, and so have no intention of buying any of their products, thus making you safe.
But that it may not work on you does not mean it doesn’t work. These manipulative practices surround us in various ways, and it is important to be aware of them. Not simply to resist them when they confront us – something often easier said than done – but to construct a language and framework so that we can help explain these problems to others. Because as long as the practices work, they won’t go away. As long as there are players who will buy these items, whatever the reason, the more developers and publishers will push these items. If we are agreed that all of these things are bad, it is only through massive change that we can actually get rid of them.