An NFT is a non-fungible token, and major videogaming companies are the latest to embrace the technology – but how is a human being supposed to know what an NFT is?
EA Sports have declared that NFTs are ‘the future of our industry’
Electronic Arts (EA) is never a company to blink when presented with a fresh pot of gold. Look at the way the videogaming giant pivoted its FIFA football series of games around an Ultimate Team mode, that found a way to regularly get money from its customer base, rather than relying on a single purchase every year.
This week, PC Gamer has been reporting that EA’s declared non-fungible tokens “the future of our industry”, hinting at a virtual dystopia bleaker than anything Stanley Kubrick could have put on screen.
It is a trend not in decline
You may have seen the idea of non-fungible tokens banded around the arts over the past year, although they’re commonly referred to as NFTs. Appreciating that, to a subset of connoisseurs NFT is more likely to stand for National Film Theatre, the token version of NFTs is very different and has popped up across art, film, even football over the past few months. It is a trend not in decline.
It’s telling that this new way ahead requires explanation even to get going though. It’s hard to sell something after all when a core question remains how a human being is supposed to know what an NFT is.
This Beetle NFT sold for £51m
The basics? Fungibility – and yeah, I had to look it up – is something that can be exchanged for something. Cash is fungible, at equal value: my £10 note is worth the same as your £10 note.
By nature then, non-fungible is something that had a unique value to it. A signed original page from issue one of The Beano, for instance, is non-fungible. It’s one of a kind. At its core then, an NFT is a digital token, or a digital ‘something’, that can’t be duplicated and is unique.
Just to muddy the waters though, an NFT also relies on the technology behind cryptocurrencies such as Bitcoin (not the last mention of crypto in this article either). That technology is known as a blockchain. Again, in simplest terms, a blockchain is effectively a ledger, held digitally, and shared across thousands of people to stop people being able to defraud it.
A blockchain will thus allow a company to create a digital collectable – perhaps a unique character for a game – and prevent it being defrauded as the blockchain will tell you exactly who owns it.
My head hurts.
My head hurts.
Now Google experts will tell you that the quickest way to stop people reading your website is to fill three paragraphs of dense information about something that’s completely puzzling to most people right at the top of the article. Yet type ‘non-fungible token’ into a Google search box, and the first suggested autocomplete option adds the word ‘definition’. And I’d suggest therein lies the substantive problem here. If you can’t get across what it is without at least an A Level or two, how are you supposed to sell it?
Even the name non-fungible token feels like it’s straight out of an economics degree.
Bitcoin, the first cryptocurrency and one which uses blockchain technology
As an aside, it reminds me that there’s a lovely website called lolmythesis, whereby people who have spent months, even years writing tens of thousands of words of a given subject reduce it down to a sentence. Take the thesis from a contributor entitled ‘The influence of caffeine on mucosal immunity and performance in males during intermittent exercise in the heat’. On reflection, they suggested it should ultimately be called “Cricketers should stop drinking ungodly amounts of coffee’.
Try something similar with an NFT. I did. I failed.
For EA to thus turn the NFT into “the future of our industry”, it’s first of all got to explain it all in a succinct, consumer-facing way. And ideally find a new name for it all. I think most of us can wrap our heads around the idea of a unique collectable item, but in the case of a gaming NFT, it’s going to be digital, and not something you can hold in your hands. Still, there’s form there too: EA offered a limited in-game player card to those who ordered the expensive version of FIFA 22 after all.
What doesn’t help though is that gaming in particular is looking to move towards what’s described as a ‘play to earn’ model, that’s also tied to the industry’s drive for NFTs. It’s not just EA exploring this, as another major publisher – UbiSoft – has declared its intentions there. On an earnings call earlier this year, its CEO Yves Guillemot said that “this industry is changing regularly with lots of new revolutions happening. We consider blockchain one of those revolutions. It will imply more play-to-earn that will enable more players to actually earn content, own content, and we think it’s going to grow the industry quite a lot”.
Ubisoft CEO Yves Guillemot has called blockchain a ‘revolution’
Play-to-earn doesn’t just bring blockchain into, well, play, but it also invokes cryptocurrencies too. Whilst lots of us have now heard of the most famous cryptocurrency – Bitcoin – the whole area remains something of a dark art, and one that financial regulators and environmental groups around the world are wrestling with. But what gaming companies appear to be investigating is the idea of playing games, and the more you play them, the more you’re rewarded for doing so. And cryptocurrency is mooted as one method of reward. Quite how that’s going to work is anybody’s guess.
Appreciating the examples cited here have centred on games, NFTs are now being used as a possible way of financing movies, for instance. The highest profile example is indie writer and director Kevin Smith, who declared earlier this year that he was going to sell a horror project of his as an NFT. The winner of the auction for it would own the film, and have the rights to either send it out into the world or keep it to themselves.
Not unrelated, Quentin Tarantino – a man clearly short of a few quid – has announced that he’ll be auctioning off ‘unleased secrets’ from his Oscar-winning film Pulp Fiction in the months ahead. That’ll include digital versions of Tarantino’s original script for the movie. Whoever wins the auction can then keep the secrets held within to themselves, or share them with everybody. It’s their choice.
If you’re one of those finding all of this a little bizarre, you’re very much not alone.
If you’re one of those finding all of this a little bizarre, you’re very much not alone. The great untested though is how much consumer enthusiasm there is for an NFT. That the plan might look great on a Powerpoint slide as a brave new frontier to explore. But it’s hard to shake the feeling at the moment that this is an innovation where companies are going to have to lead consumers, rather than consumers actively seeking something of this ilk.
Because as it stands, to go back to the title of this piece – How Is A Human Being Supposed To Know What an NFT Is? – I’m currently not convinced they are. I’d also suggest it’s going to take some very well resourced companies to change that, and even then, there’s nothing close to a guarantee of success. What’s clear though is that’s not going to stop them from trying. Given the response to EA’s declarations thus far though, there’s an awful lot of work to be done.
