Why Do Gamers Hate NFTs?
In recent years, several major gaming studios have announced plans to integrate NFTs into their games. However, these announcements have been met with significant backlash from gamers.
There are a few reasons for this backlash. First, many gamers do not understand what NFTs are. They have only heard about NFTs in the context of scams and pump-and-dumps, and they do not realize that NFTs can also be used to create legitimate and valuable gaming experiences.
Second, gamers are concerned about the hassle of interacting with NFTs. The average gamer is not interested in learning how to use blockchain technology, and they do not want to have to deal with wallet management and high fees for NFT transactions.
Finally, many gamers are unaware that non-fungible tokens (NFTs) are simply a technology that can be used to buy, sell, and trade in-game digital collectibles.
I believed that If I asked these gamers who are against NFTs if they would like to be able to sell or trade their in-game skin collections, they would be completely onboard.
So I decided to run a survey and gather data and find out if my theory was correct.
Research Study Methodology
I ran a study that surveyed 1,144 gamers about their in-game spending habits and NFTS. I collected the survey data using Google Forms, where I asked the following three questions:
Do you want to be able to buy, sell, and trade the skins/cosmetics you buy for a game?
- Yes, I want to be able to buy skins from other players or resell skins I previously bought.
- No, I don’t want skins/cosmetics to be tradable on an official marketplace.
- I don’t care if I'm able to buy, sell, or trade skins/cosmetics for games.
If skins/cosmetics were allowed to be resold on a secure marketplace—how would that affect your purchasing decisions?
- I never pay for skins and still wouldn't.
- I never pay for skins but would be open to if I could resell them.
- I currently pay for skins and would spend even more if I could resell them.
- I currently pay for skins and would NOT spend more if I could resell them.
What do you think about games that want to implement skins/cosmetics as NFTs?
- I want to play games that use NFTs.
- I’m open to learning about how NFTs can improve games.
- I don’t want to learn how to use NFTs.
- NFTs are a scam.
In order to get responses I ran a promo ad across a few gaming TikTok and Instagram pages that post content for games like Fortnite, Call of Duty, and League of Legends.
I offered a $250 Steam (or dollar equivalent V-Bucks) gift card to a randomly selected participant.
The reason I selected popular Web2 games is I wanted to gather data from a general gaming audience NOT from gamers who are already into Web3 and Crypto.
I also only asked about cosmetics and skins because I didn't want gamers that don’t like Pay-to-Win models to skew the data because they were afraid NFTs meant the game would be Pay-to-Win.
I think it’s safe to assume that if players would prefer to be able to trade skins—those players who like Pay-to-Win games would also prefer to be able to buy, sell, or trade their in-game items.
84.2% of Gamers Actually Want NFTs In Games
Here are the results of the first question in the survey that asked if they wanted skins and cosmetics to be tradable:
The study found that the overwhelming majority of gamers want to be able to trade the skins and cosmetics they purchase for games.
So you might be wondering “why do the vast majority of games not allow skins to be traded?” I believe it’s because there isn't a way for game studios to enforce fees or royalties on secondary sales (without using NFTs).
If they wanted to enforce royalties they would have to facilitate trades on their own Web2 marketplace, which means they can’t allow players to trade with real money or they would have to comply with a long list of regulations—similar to a crypto exchange.
The only major game I know of that actually does allow players to trade skins is CSGO, but they are missing out on many benefits by not making their skins into NFTs.
Here is a quick rundown of why tradable skins should be NFTs:
- Allows game studios to capture royalties on secondary sales.
- Players won’t have to use black market websites where they can get scammed or hacked.
- Various other Web3 benefits (True ownership, Immutable Assets, Interoperability)
If you want a more detailed breakdown of how NFTs can significantly improve in-game assets you can read my What Is Crypto Web3 Gaming? article.
81.9% of Gamers Would Spend More If Cosmetics Were Tradable
Here are the results of the second question in the survey that asked if they would be willing to spend more on skins and cosmetics if they were tradable:
With 81.9% of gamers being willing to buy more cosmetics if they were tradable, I don’t think there would be much of a canalization issue between primary and secondary sales.
Based on our study I think games could increase the total number of monetized users by up to 33.4%.
I believe this could offset any canalization that might happen as a result of players buying on the secondary market from other players.
By also adding a 15%+ royalty fee on secondary market sales games could actually earn more from open-market tradable cosmetics than from the traditional closed-market model.
NFTs Still Have A Bad Reputation In The Gaming Industry
Here are the results of the third question in the survey that asked about games implementing skins/cosmetics as NFTs:
NFTs still clearly have a branding problem when it comes to your average gamer. This study has proven that gamers want the benefits and features that NFTs can enable—they just don’t know it.
How Can Games Implement NFTs Successfully?
The two key findings I got from this study are:
- Blockchain jargon and terms like “NFTs” should not be in your customer facing marketing materials. All the technical information should be in your whitepaper for investors/crypto natives.
- Gamers are not willing to deal with friction, especially if it's to use blockchain tech.
The best example of a major company successfully implementing NFTs is Reddit—they offered a seamless buying process where you could even buy their NFTs with a credit card.
Reddit also used the term “Digital Collectibles” instead of NFTs or any other crypto jargon in their marketing.
Using this strategy Reddit was able to sell over 2.3 million NFT profile pictures to mostly non-crypto users—making it one of the most successful NFT drops of all time.
At the end of the day, blockchain is just a technology that can deliver features and experiences that can’t be done in Web2.
If you want your project to go mainstream you must make sure the blockchain elements and NFTs are abstracted away and fade into the background—similar to other technologies like TCIP and CDNs.