FTX’s new gaming division faces an uphill battle in convincing gamers to buy NFTs | ZDNet

Cryptocurrency exchange FTX is reportedly creating a unit specifically focused on helping video game developers offer blockchain-based technologies like cryptocurrency and NFTs to their players. 

According to Bloomberg, the simply named FTX gaming division will offer a “‘crypto-as-a-service’ platform through which gaming companies can launch tokens and offer support for NFTs.” The unit apparently is being assembled now, with a fully-remote team of new hires powering it. 

This follows a $100 million investment from FTX back in November 2021 that FTX made alongside two partners with a vested interest in supporting the Solana blockchain’s use among gaming companies, Bloomberg also noted. 

An FTX spokesperson told the site that his company is “launching FTX Gaming because we see games as an exciting use case for crypto.” They went on to say “there are 2 billion+ gamers in the world who have played with and collected digital items, and can now also own them.”

While FTX and several other major crypto players have attempted to entice gamers with the promise of integrating crypto and NFTs into their platforms, the reaction has almost universally been hatred, rebellion, and outright rejection of the idea. 

Even in the relatively short time since NFTs have become prevalent, there are already numerous examples of gaming companies announcing what they see as an “exciting” plan to integrate NFTs directly into their games or platforms. Almost without exception, these plans end with the company in question having to backtrack days or weeks later, when their planned audience riots over the idea. 

The examples of this are already too plentiful to list here, but some of the most high profile incidents have included:

• Gaming communications platform Discord caused a massive furor by hinting at forthcoming NFT plans, and was immediately forced to cancel them. 

• Games publisher Ubisoft earned boycott threats from consumers and angry responses from internal staff over its plans to found its own NFT platform called Ubisoft Quartz that would sell NFTs for the Ghost Recon franchise.

• An executive at Electronic Arts went from claiming NFTs were the future of gaming, to claiming his company had no plans to pursue them in the space of one financial quarter. 

• Worms publisher Team 17 lost multiple business relationships with developers over its sudden efforts to integrate NFTs into the games those developers worked on. 

In each case, these plans have ended up being halted, canceled, or reworked. And each would-be NFT purveyor has been forced to do damage control when the very gamers they’d hoped to draw NFT revenue from caught wind of their plans and immediately stomped all over them. 

Amy Wu, the head of FTX’s $2 billion venture capital fund, is herself quoted by Bloomberg as saying “I wouldn’t have been able to predict kind of how fierce the animosity has been with some gamers against NFTs and it’s unfortunate, but it’s interesting,” during a recent Decrypt Media podcast. 

While the exec might not have been able to predict the animosity, many angry games could have likely warned her. 

They should’ve asked a gamer…

The gaming community, particularly PC gamers, have had a long and vitriolic relationship with blockchain technology that’s often missed by crypto-focused companies. These crypto firms see the tech-focused gaming subculture as one that should, in theory, be highly receptive to many of the concepts NFTs and cryptocurrency rely on for their success. In reality, the majority of gamers are anything but.

One of the most important, seemingly least understood, reasons for this is very simple: video cards. 

Video cards, or graphics processing units (GPUs), are the PC components that handle all of the hard work when it comes to producing everything from simple 2D graphics to the near-lifelike vistas of modern AAA titles. Those same units also just happen to be the very best devices in the world at mining cryptocurrency and handling the other processing tasks that make blockchain-based technologies like NFTs possible. 

These competing groups were already at each other’s throats before the pandemic, due to would-be crypto miners driving GPU prices up by spiking demand and continually clearing out retailer shelves. Many gamers have found themselves left in the lurch when looking to build a new system or upgrade a current one because of the constant hunger for more GPUs from cryptomining companies buying them by the literal truckload. 

This has only gotten worse since the ongoing global crunch COVID-19 put on chip production. The already strained supply chain has now reached the point where many former PC gaming enthusiasts have simply given up on buying GPUs entirely. The few that are available are being sold for about twice their supposed MSRPs, at retail. Secondary market prices, meanwhile, have spiked to the point where models that were destined to sell in the $500-$600 range are regularly fetching $1,600-$2,000. 

Of course, gamers also reject blockchain tech due to the NFT scams, criminal activity, and disastrous environmental impact, just like other groups of crypto detractors. But, they’re also now facing a world in which the same GPU hoarders are attempting to take the digital assets all of those rare video cards allowed them to create and sell them to the gaming community. These are the exact same people who were denied the ability to play many of these publishers’ games because they can’t find or can’t afford the GPU they’d need to play it. 

It’s really not that hard to see why blockchain technology has encountered such a hostile audience, when taking all of this into account.

It’s a bit mystifying, particularly given Amy Wu’s statement noted above, why FTX has chosen now to move forward with its gaming ambitions. Obviously, the company believes it can turn the tide of gamer opinion on NFTs and crypto in its favor. Only time will tell if its surprising decision and ample financial backing can make its ambitions to win back the video game community into a reality.