Square Enix wants NFTs, no matter what gamers think

Last updated:

A New Year’s letter from Square Enix President Yosuka Matsuda is incredibly bullish about NFTs and blockchain. In it Matsuda argues the place of these technologies in a future vision of “decentralized gaming.” In the face of widespread gamer outrage at the implementation of NFTs and blockchain tech into gaming, it’s a letter that massively misreads the room. It focuses on a nebulous desire to create play-to-earn incentives, ignoring already extant tools and technologies for crypto hype.

Matsuda’s letter tackles a broad range of topics, from cloud gaming to AI but the real meat of his message centers on an enthusiasm at Square Enix for how NFTs and blockchain tech can reach past those just “playing for fun” to encourage those “playing to contribute” to incentivize players to create user-generated content.

“Traditional gaming has offered no explicit incentive to this latter group of people, who were motivated strictly by such inconsistent personal feelings as goodwill and volunteer spirit. This fact is not unrelated to the limitations of existing UGC (user-generated content). UGC has been brought into being solely because of individuals’ desire for self-expression and not because any explicit incentive existed to reward them for their creative efforts. I see this as one reason that there haven’t been as many major game-changing content that were user generated as one would expect.

This mystifies and infuriates me in equal measure. The reason you don’t have “game-changing user-generated content” is because you wall off dev tools, make games difficult to mod, and keep a closed in-game market in which users can’t submit their own content. It’s no wonder why people don’t do fun things to your games, it’s because they can’t.

Square Enix NFTs

If Matsuda-san wants to encourage user-generated content, there are many ways to do that. Open up games to modding perhaps? Allow the creation of player-designed cosmetics and items in locations like FFXIV’s marketplaces? It’s possible to do all these things and encourage the creation and monetization of user-generated content without succumbing to techbro hucksterism. You don’t need to saddle yourself on the blockchain, a technological ecosystem that uses up enormous amounts of energy generation and generates tons of e-waste.

Solutions already exist to promote user-generated content! On PC, games with an open back end and mod-friendly tools can experience a rich long tail of players creating stuff. Formats like Steam’s Workshop and the CS:GO skins marketplace, for all their problems, are examples that show you can monetize such UGCs without having to buy into the NFT space. Already Microsoft is opening up the Xbox platform to modding.

I’m not exactly alone in this pushback, and attempts to throw NFTs into the gaming mix have been met with vitriolic reception. STALKER 2’s devs announced plans to mint NFTs to fund development, and were met with such broad fanbase pushback that they rapidly backpedaled. Ubisoft’s entry into serialized NFT items for Ghost Recon: Wildlands met a spectacularly cold response. No one is biting. Discord, the popular app favored for videogames comms, has seen many Nitro subs cancelled after their CEO suggested adding crypto integration into the service and has been offering freebies and discounts to win those users back.

Video game executives buying into NFT bro logic is just “what if we could increase player engagement with external systems” DO YOU EVEN PLAY YOUR GAMES? Asking themselves, “What if we could sell gamers things in the game?” YOU DO THAT ALREADY. “What if gamers could sell stuff and we take a cut?” DO YOU DO MARKET RESEARCH?


There are a ton more things to unpack from Matsuda-san’s letter. There’s the insidiousness of ‘play-to-earn’ taking the worst aspects of real world grind culture, already the enemy of fun, to FFXIV effectively being a better metaverse than what NFT evangelists propose. But for now, I really want to zero in on the fact that it doesn’t seem like blockchain would be an excellent solution for what Square seems to want to do. In fact, it’s an environmentally unsound one that won’t just burn out GPU cards but gamer community goodwill as well.