Crypto exchange FTX is launching a new team focused on driving cryptocurrency and non-fungible token (or NFT) adoption in the gaming world, according to a Bloomberg report.
The initial offering from the new gaming unit will reportedly be a “crypto as a service” platform through which game publishers can launch tokens and provide support for in-game NFTs.
“We are launching FTX Gaming because we see games as an exciting use case for crypto,” an FTX spokesperson told Bloomberg via email. “There are 2 billion+ gamers in the world who have played with and collected digital items, and can now also own them.”
What’s an NFT?
NFTs allow you to buy and sell ownership of unique digital items and keep track of who owns them using the blockchain. NFT stands for “non-fungible token,” and it can technically contain anything digital, including drawings, animated GIFs, songs, or items in video games. An NFT can either be one of a kind, like a real-life painting, or one copy of many, like trading cards, but the blockchain keeps track of who has ownership of the file.
NFTs have been making headlines lately, some selling for millions of dollars, with high-profile memes like Nyan Cat and the “deal with it” sunglasses being put up for auction. There’s also a lot of discussion about the massive electricity use and environmental impacts of NFTs. If you (understandably) still have questions, you can read through our NFT FAQ.
The new gaming-focused team from FTX is a sign of the continued push to bring blockchain-based products into the gaming space, as demonstrated by projects like GameStop’s own NFT marketplace. But though game developers and retailers see crypto tokens and NFT items as a promising revenue stream, gamers have voiced widespread skepticism over the need for blockchain technology.
In the past few months, various game publishing companies have been forced to cancel proposed NFT projects after fan backlash, which has largely sprung from opposition to new forms premium downloadable content that are seen as offering little extra value to players. Other blockchain critics point out that there are already many established markets for the trade of in-game items, making the value proposition of cryptocurrency tie-ins unclear.
Brett Harrison, president of FTX US, told The Verge that the company believes blockchain technology can build on existing game features without detracting from the experience of players who are hesitant to adopt it.
“I think the backlash is primarily out of concern that the focus on cryptocurrency will divert the efforts of game studios away from making the best game possible for the players,” Harrison said in an email. “We believe that blockchain technology takes features of games that already exist, such as in-game avatars, skins, and rewards, and makes it possible for players to own, invest, and trade these items outside of the game. But the enjoyability of the game for all players, including those who don’t wish to participate in these kind of economies, should always be the primary objective regardless of whether blockchain tech is involved.”
For the FTX exchange, the attempt to build collaborations with game developers is another prong of its incursion into the cultural space. The company was behind the recent launch of an NFT marketplace for the Coachella festival, where photographs, posters and lifetime passes to the festival were sold as NFTs. Viewers of this year’s Super Bowl will also have seen ads from FTX, which was one of many crypto companies vying for the attention of football fans.
Having closed a $400 million funding round in January 2022, the company has become one of the most valuable private crypto firms in the world, and claims to be the third-largest exchange by trading volume.
FTX’s international operations were relocated from Hong Kong to the Bahamas in September 2021, citing the Caribbean nation’s favorable and comprehensive regulatory regime — though job postings for the gaming unit are currently listed under FTX US, the US affiliate of the company.
Updated at 1:25pm ET to include statement from FTX US.