The first in-person Game Developers Conference since the start of the COVID-19 pandemic was also the first GDC to put blockchain technology like NFTs and cryptocurrencies front-and-center. If you wandered around Moscone, Web3 developers and blockchain platforms rivaled traditional vendors like Amazon and Unity for floor space. 

There were t-shirts and hoodies aplenty. There were weird trucks and fliers galore. You want sponsored talks? Oh so many. But with some surveys having up to 70 percent of game developers expressing indifference or hostility to NFTs and cryptocurrency technology, why was it so present?

The short answer is as always, money. Investors pouring cash into blockchain projects mean blockchain companies have cash to burn on booths and advertisements for their services. 

But there's also the recruitment factor. One motivation for companies attending GDC is the chance to attract employees, and blockchain, NFT, and Web3 game developers and platforms are just as hungry for talent as every other studio at the moment.

With blockchain games, we've heard from plenty of developers that the flood of investment cash isn't enough to make them sign up. So this GDC was a chance for the advocates of Web3, NFTs, and "play-to-earn" (they pivoted to "play-and-earn" during the show) to tackle core criticisms of the technology.

So did they make their case? Short answer: no.

Long answer: No, and boy did it feel like everyone doubled down on the worst arguments.

What can you do with blockchain tech anyway?

GDC 2022 was an opportunity for the blockchain world to step away from the hype-fueled culture and speak in practical, technical terms about how cryptocurrency-driven technology could improve game development. 

They rarely took it. 

Our team's collective journey took us across the show, in conversations with individual developers and into panels aimed at discussing the highs and lows of the technology. These included "Free-to-Play Summit: Understanding NFTs: A Sea-Change for F2P Games," and "Free-To-Play Summit: Blockchain, NFTS, Play-To-Earn…Is It Real or a Farce?"

In the first talk, which discussed about what NFTs can do for free-to-play games, speaker Jordan Blackman treated a room full of blockchain enthusiasts to slides that failed to offer technical or design insights. One slide from this talk repeated the oft-discussed point that players who are blockchain owners become evangelists for the game, and can recruit other players to help build the value of their tokens, which can increase their standing in the community.

Photo via Game Developer Staff

As critics have noted, this model of community-building runs dangerously close to the format of a multi-level marketing scheme, and risks creating losing situations for players who aren't early buy-ins.

This and other talks were reiterated pitches on "the power of ownership" that has been much-hawked in the world of NFTs and crypto-based games, but not fully fleshed out. 

There was one session where panelists exercised caution on the idea—one curated by Proletariat Inc CEO Seth Sivak (who opened the panel by saying Proletariat is not working on any blockchain or cryptocurrency games at this time).

In this panel, Sivak quizzed PKO Investments & Kabam's, Holly Liu, Dream Reality Interactive's Dave Ranyard, and Laguna Games' Katrina Wolfe about blockchain tech alongside blockchain critic and Naavik consultant Lars Doucet.

(Disclaimer: Doucet's written for Game Developer on a few occasions.)

Sivak did a fair job trying to explain what each panelist saw in the value of blockchain technology for games. All of it did come back to the technology's utility as a method of financialization, and by proxy, authority in community.

Liu pitched a future full of DAOs (decentralized autonomous organizations) that act as a community framework around a game's development. If the game's primary developers decide to end live support for a game (or cease development before a game's launch), the game's blockchain-stored assets could be accessed by the DAO, which could continue development and shape the game in the way they want to play.

"End of life for a game will look more like handing it over to a DAO," she explained.

Ranyard explained that Dream Reality wants to make games where the buying and selling of artificially scarce game assets can be a beloved part of the ecosystem. He said that fun game design is still the team's "north star," but that he sees a future where the sky-high secondary markets for games like the Pokémon Trading Card Game are designed for a digital world, not just a future one.

And Wolfe was dead-set on the idea that players want to be able to sell in-game objects they've acquired in their time with a game, so that they could take that equity and invest it in another game. She leaned on the idea that players might not profit from such an experience (there's no guarantee they'd get more money out than they initially put in) "but that's more than you ever got on a free-to-play game," she added.

Even noted critic Doucet was willing to concede that there are some neat, interactive ideas that blockchain might be good for, regularly repeating that "a less shitty version of PayPal" might be an ideal outcome of the blockchain gold rush.

But his other two suggestions—easier avenues for regulars consumers to participate in investing without becoming accredited, and a kind of gambling system to take bets on real-world possibilities—highlighted the gravitic pull that all of these ideas can't get away from: cryptocurrency and blockchain tech are tools for financialization. 

And here, financialization means speculation, which still comes off as a hair's breath away from gambling.

The landlords' game

To the panel's credit, all of the game industry veterans speaking about blockchain, cryptocurrency, Web3, and NFTs did their best to hedge bets on the wild promises and hype that have defined the market to date.

Laguna regularly cautioned against the value of speculation, and that it could render all of the possibilities of Web3 obsolete, often by recreating the problems with Web2.

Ranyard explained that for "play-to-earn" to work (Doucet called out that many in the space have begun switching to the phrase "play-and-earn") there needs to be room for modest successes where players aren't trying to earn reliable income on a project. "Fundamentally, we want people to enjoy playing a game," he said. "And if it becomes a massive hit and small things they've created go up in value, we're happy as developers, and they're happy about it." 

"If it's a moderate hit, and that doesn't happen and it's not making a lot, I don't feel terrible."

But Liu kind of gave away the game at the end of the panel, when she gushed about her excitement to rent out in-game NFTs for passive income, calling it "Airbnb for [her] NFTs." If a player wanted to use the coveted in-game assets she'd acquired or paid for, she'd be able to let them do so while collecting the affiliated cryptocurrency at the same time.

When you apply that logic to the rest of the bright spots peaking through the panel, the worst of cryptocurrency's impact comes roaring back.

Raynard's excitement for adapting the Pokémon Trading Card Game's secondary market ignores the depressing downsides that have hit the game's primary market. In 2020 - 2021, fervor for high-value Pokémon cards reached a fever peak, and game stores big and small reported shortages that prevented  game enthusiasts from collecting new cards. 

Target cancelled its sales of Pokémon cards after violence broke out at multiple locations. High-selling copies of decades-old Charizard cards may make for a great headline, but you can already see this story repeating itself in the rise of cryptocurrency theft.

Doucet laid out how in "metaverse" projects like The Sandbox, artificial scarcity for land (which is required if you want to create and sell user-generated content) are "speedrunning the housing crisis" (he got cheers from the audience for this remark).

But after ending his breakdown of the flaws of artificial scarcity in artificial spaces, members of the panel pushed back on his argument of unnecessary artificial scarcity being a bad thing, pointing out that games already use artificial scarcity for rare objects as coveted rewards.

It was especially jarring when Sivak, the moderator, suggested that this model could be used to create a stabilized version of World of Warcraft's secondary market for gold farming. It was especially unusual to hear him suggest that said farming was a way for players to add value to their hobby times, making a little extra cash while they played video games for the night.

It wasn't. It was a dedicated labor effort that sometimes created sweatshop conditions in developing regions, and had secondary impacts on the game's resource and currency economies. 

Speaking of developing regions, the panel had plenty of thoughts about who blockchain games are "for..."

Investing is fun, right? Right?

In a very intense moment of déja vu for yours truly, several panelists echoed what was said during DICE 2022's blockchain games panel, about how blockchain games open up video games to a "new audience" in the same way mobile, casual, and free-to-play games did.

Much was made about how blockchain games can reach audiences they couldn't before, and Liu leaned heavily on the "aunties and uncles" in the Phillipines that became a large part of Axie Infinity's play-to-earn users.

"Maybe these new gamers are investors and for them, that’s what ‘fun’ is," she hypothesized.

But between these comments and Sivak's casual reference to gold farming, a picture emerged of a kind of game player who doesn't play for fun, but because that money is essential to pay the bills. The story of Axie Infinity in the Phillipines sounds like a feel-good tale until you recall the capitalistic forces that plunged people out of work made it a basic income lifeline.

It's a job. And Doucet pointed out, it's a job that doesn't produce value. He likened it to a system where you pay workers to dig holes, and then fill them back up. "Just because some people have figured out how to efficiently dig and fill those holes doesn't mean it's sustainable," he quipped. 

In order for blockchain games to not crater, more money needs to be coming in than is going out, the same as any other business. But you can't do that if the only reason to spend money is to sell something for hopefully more money.

Financialization all the way down

At GDC, we did our best to quiz developers in casual conversation about what they thought about blockchain technology.

Just like at DICE, we got different versions of "there's neat technological principles. But the financialization gets in the way."

One dev team pitched us on the idea of letting players resell copies of their digital games. Another talked about game interoperability, and that while it's technically possible, the profit motive doesn't follow, and no company would want to pursue it.

The best ideas we've heard so far about blockchain game development technology sound viable for smaller anarchist or collectivist communities. But its biggest proponents are hypercapitalists, acting rapidly to create new systems where value can be extracted. 

In the handful of sessions our staff attended, no one meaningfully addressed the ongoing environmental impact of cryptocurrency. Scams and rug-pulls were brushed off as "early days" or "not a reason to not press forward," echoing the sort of dismissive language we've heard from companies like Ubisoft.

Doucet called out that the entire use of cryptocurrency tokens in community building and governance establishment have a "tenuous and non-legal binding." Smart contracts alone can't guarantee other forces won't upend these supposedly decentralized projects.

One of Wolfe's early words of wisdom on the panel sort of agreed with this. She downplayed the idea of selling decentralization as a standalone concept, stating that it doesn't "guarantee inclusion or democracy" for players investing in blockchain games. "Transparency doesn't mean trust and accountability either," she added. 

"Just because something's 'transparent' doesn't mean I can trust you because I don't know who you are." Spinning that out, she added it means someone who can't be trusted can't necessarily be held accountable if something goes wrong.

Wolfe acknowledged Doucet's points about blockchain projects being "far from the promise" at the moment. But in a moment that summed up all the whole panel, she added "but I don't think that doesn't mean we shouldn't try."

Written with assistance from contributor Joseph Knoop.

Update 4/15: This article has been updated with additional context about our experiences at GDC.