Blockchain and video games: a happy marriage?

What if block­chain tech­no­logy were to pro­foundly change the video game land­scape through an unpre­ced­en­ted trans­fer of own­er­ship in the form of non-fun­gible tokens (NFTs)? The mar­ket for avatars and non-fun­gible objects has already entered the vir­tu­al game world in a haphaz­ard and often exper­i­ment­al way. Stu­di­os and pub­lish­ers such as Ubisoft, through its Stra­tegic Innov­a­tion Lab, are now look­ing at this new mod­el that the video game industry could pop­ular­ise worldwide.

What is the mis­sion of Ubisoft’s Stra­tegic Innov­a­tion Lab?

Nic­olas Pou­ard. To anti­cip­ate the future of the video game industry and help Ubisoft pre­pare for it. As such, we’ve cre­ated a foresight team that con­ducts fairly stand­ard stud­ies to pro­ject ourselves into the future based on trends and weak sig­nals. And we try to trans­late this pro­spect­ive research into con­crete and prac­tic­al terms.

Firstly, we have a pro­to­typ­ing team that gets its hands dirty. For example, very early on we worked very early on sub­jects such as aug­men­ted real­ity (AR) or machine learn­ing algorithms and, for the past four years, we have been work­ing on block­chain. At the time, it must be said that there were rel­at­ively few applic­a­tions, yet we were able to put togeth­er a small team and work on this sub­ject over a long period.

The second path chosen by the Ubisoft Lab is a star­tup incub­at­or that allows us to work dir­ectly with entre­pren­eurs and to help them under­stand the tech­no­lo­gic­al chal­lenges they face. And of course, the new mar­kets they are try­ing to cre­ate. In 2019, we selec­ted the star­tup Sor­are as part of Ubisoft’s Entre­pren­eurs Lab pro­gramme. A few days ago, Sor­are announced that they had raised €580m of invest­ment, the biggest fun­drais­ing pro­ject of the whole of French Tech. Indir­ectly, it’s quite flattering.

What link do you make between block­chain tech­no­logy and video games?

Four years ago, it was the arrival of one of the most import­ant block­chains, Eth­ereum, which really put for­ward the concept of Smart Con­tract, or decent­ral­ised auto­ma­tion. At the time, there was a lot of talk about a revolu­tion, all indus­tries included. Obvi­ously, we wondered what this meant for video games and for gamers in par­tic­u­lar. There was talk of more con­trol over game items for play­ers or sub­scribers, their vir­tu­al items, and skins, that it would give new power to com­munit­ies. We’ve been talk­ing about guilds or teams for a long time in video games. Again, there was a sense of a new era for these com­munit­ies to move towards decent­ral­ised autonom­ous organ­isa­tions, entit­ies that would man­age them­selves through code, etc. To be hon­est, there was also a sense of a new era for these com­munit­ies, yet there was also a lot of unknowns.

Then we met B2Expand in Lyon, which was one of the first star­tups in the world to work on the use of block­chain in video games. As we were set­ting up our incub­at­or at the time, we brought them in. We were able to see first-hand what it meant for video games, i.e. increased user con­trol over game objects. And here, NFTs, or non-fun­gible tokens, are really the heart of the pro­pos­al. These digit­al assets are issued and exchange­able on a block­chain, but they are unique and non-divis­ible. One NFT will always be dif­fer­ent from anoth­er NFT. It is a proof of own­er­ship of sorts.

Today, if you buy a car in the video game The Crew or a skin in Rain­bow Six Extrac­tion, you pay for access. The exist­ing tech­no­lo­gic­al lim­it­a­tions mean that the pub­lish­er retains, by default, all con­trol over this con­tent. If there is no imme­di­ate need or demand from users for more con­trol, there has been a rare situ­ation where there is a sense of injustice that a pub­lish­er can change the rules of the game and alter the power of an item for example.

Block­chain tech­no­logy has a very exper­i­ment­al dimen­sion because, sud­denly, the eco­nomy of a video game can be shif­ted more to the play­ers’ side and not enclosed in the publisher’s eco­sys­tem alone. We, as pub­lish­ers, are still won­der­ing how to make this access­ible to go in the dir­ec­tion of the play­er. The tech­no­logy is quite imma­ture in some respects.

So, it’s all about reliability?

For Ubisoft, this reli­ab­il­ity require­ment is essen­tial, prim­or­di­al. And then, we must see to what extent this tech­no­logy is dis­rupt­ive or not in the pro­duc­tion pro­cess. If it does­n’t trans­form pro­duc­tion meth­ods, it can be integ­rated quickly. If it trans­forms the rep­res­ent­a­tions we have of how to make a game, that poses more prob­lems. And so, typ­ic­ally, block­chain is a point of fric­tion on pro­jects already in pro­duc­tion. But if we start early, it allows us to have a whole phase of exper­i­ment­a­tion to check the reli­ab­il­ity of the tech­no­logy to devel­op a dis­course which allows us to integ­rate these new ways of doing things into pro­duc­tion. First, how­ever, we must demon­strate the reli­ab­il­ity of the NFT and the bene­fits for the play­ers. Oth­er­wise, the pro­duc­tion teams will not adhere.

Can video games pop­ular­ise NFT?

We are play­ers that people trust. We have this level of repu­ta­tion which means that, if tomor­row we pro­pose to dis­trib­ute NFT in our games, people can come with con­fid­ence. In the long run, and if this move­ment is glob­al, it could make block­chain invis­ible in a way, redu­cing it to an infra­struc­ture tech­no­logy. It’s the use that will come first. And the primary use that we see today is indeed this trans­fer of own­er­ship for our play­ers. Our main chal­lenge remains the same, whatever the tech­no­logy: only imple­ment an innov­a­tion if it brings mean­ing and added value to the play­ers and their gam­ing experience.