If you've played a video game in the last six years, you've probably seen microtransactions. You've probably seen an in-game shop try to get you to buy their flavor of premium currency you can only get with real money. Games weren't always like this, but the controversial new NFT technology might be a solution to these modern problems. In this article, we'll explain how this is possible.
Microtransactions: What's the Problem, and How Did We Get Here?
Until the 2010s, games were just things you bought and then you could play. Sure, by the time the mid-2000s rolled around, most games you could download digitally if you wanted, but that just saved you a trip to GameStop.
Not only were games, outside of MMOs, a one-time cost, but the vast and overwhelming majority of games released finished. Maybe they didn't always release as high-quality masterworks of game design, but they worked. They were playable, and they largely did what was advertised.
This wasn't because these just were the good old days and that's how it was back then but rather that game developers were still getting used to the ability to patch games whenever they wanted over the internet. For most of gaming's history, a game had to be polished by launch because there was no way to change it after it came out.
Plus, gaming was a much, much smaller industry even a decade ago. Lots of people loved games, and there was money in it, but gigantic publishers didn't make billions on top of billions, forcing them to push out money-maker releases every year and fill their games with microtransactions to show growth to shareholders.
All of these factors together made gaming into what it once was. Today, things are different, but most gamers don't hate the concept of microtransactions on its face. For example, when they were first getting popularized back in the days of the PlayStation 3 and Xbox 360, they weren't a big deal to almost anybody.
Games might have a couple of skins you could buy, maybe a theme, a soundtrack, and a few other goodies, and that was it. Plus, these items wouldn't be individually that expensive. You could buy the lot, even if you were just a kid, and it wouldn't break the bank.
More importantly, they weren't constantly advertised, and there tended to be lots of customization options built into games already, so there wasn't a great need for premium offerings like paid skins or other types of cosmetics. If you bought something from the store, you did it as a treat you could justify a bit by saying you were giving the developers of the game you loved some support.
Everything started changing in the late 2000s with the rise of free-to-play, live service mobile gaming. At the time, gamers saw the advent of free downloadable apps on your phone with premium shops and largely ignored them, but publishers didn't.
Related: NFTs in Video Games Explained
You could get a lot more people in the door if your game was free, and you could make much more money than you did by selling your game for a flat fee with microtransactions. Bigger audience, more spending. This was something that game companies couldn't ignore.
So, over the years, premium $60 (or now $70) AAA games adopted business models that looked more and more like free-to-play mobile games without actually lowering their prices or going free-to-play. Customization options that were once standard in games became gated behind paywalls, while rewards and progression became gated behind battle passes with premium tiers.
As a result, games reached more and more people, and game companies made more and more money, but games themselves, in some ways, suffered, too. But ultimately, the problem isn't with microtransactions, the issue is that publishers lock more and more content behind a paywall until the whole experience feels hollow and slimy, like a used-car salesman trying to sell you something.
Can NFTs Make This Mess Any Better?
Yes and no is the honest answer. This is because NFTs are just a tool like any technology. They can be used to further separate gamers from their wallets, or they can add value to digital sales. It's really up to their implementation how good or bad they'll be for gaming.
Take huge failures like Ubisoft's Quartz NFT program or S.T.A.L.K.E.R. 2's plans to add NFTs. These are clear examples of NFTs being used as luxury boondoggles with no actual value to get big-spender whales to buy them all up to flex on others. These are really just another way to sell gamers microtransactions but with a new coat of paint and under a new name.
Whether you like them or not, though, microtransactions are here to stay, so gamers as a community ought to try to spend their time advocating for an ethical way of doing this business rather than complaining about their existence. Times change, and just like Hollywood was inevitably going to move away from black-and-white, gamers have to realize the flat fee game is never going to be the status quo again.
The good news is that NFT technology can make games better, if we let them. Take some of the biggest issues that have historically plagued the microtransaction business model: First, microtransactions are by definition temporary. They're tied to a specific game, and if the publisher shuts the game down, loses their data, or a glitch dooms your account, your purchase is gone.
Second, microtransaction purchases don't come with good records, don't retain value, and can't be resold. Most of the time, the only way to know you bought something from an in-game shop is to see if the item is in your inventory or consult a credit card statement. And whatever you buy, unless you're lucky enough to be buying a CS:GO item or something similar, can't even be returned, let alone resold or traded to another player.
Last, microtransactions are usually shrouded in secrecy so as to benefit the publisher the most and make them, and not the developer or the artists that designed a particular thing, the most money possible. Don't expect to find out how many copies of a skin have been sold or where the profits actually go.
All three of these key problems can be addressed by NFTs. For one, NFTs can easily be programmed to work across different games, particularly games under the same publishing umbrella. Plus, they won't actually be tied to a specififc game, and if a game goes under or the publisher shuts down, you'll still have your NFT.
Second, NFTs are by definition secure digital records. NFTs also retain value, can be resold, and can be traded. They work like digital items somebody might keep in their real-world inventory, much like a character in a game stores virtual items in their inventory.
Last, NFT sales can be tracked openly, and NFTs can be structured in such a way that even when they're resold a percentage of the profit will go to the original creator. You could set up NFTs so a portion of the profits from them goes to the artist that designed them or specifically the development studio that built the game.
This may not happen, as publishers do tend to be greedy, but it is to say that NFTs can provide a lot of usual features to the consumer in the microtransaction world if publishers do decide to implement them ethically.