NFT gaming raises ‘ethical issues’, says game developer group

The International Game Developers Association (IGDA) has raised concerns about the use of Non-Fungible Tokens (NFTs) in gaming, saying “ethical issues” must first be addressed as a priority. IGDA interim director and founder of gaming nonprofit Games for Me Jakin Vela said the use of NFTs in game-related activities is a “socio-political explosion waiting to happen”.

“[IGDA is] in the process of revising our stance to be a little stronger because there are actually a lot of ethical issues that come with NFTs,” Vela continued.

The association also argued that NFTs should not be used for game-related activities as there are “far less costly” database options that can provide the same technology with simpler workarounds. IDGA had earlier criticized the proof-of-work blockchains that dominated cryptocurrency and NFT trades, calling them “energy inefficient”.

IGDA’s findings

“NFTs should never be used when a simple and far less costly database table can be managed to provide the same information and benefits,” the group declared in July 2021, when many companies welcomed the use of NFTs in play-to-earn games, labeling it as the future of gaming.

IGDA said that developers should at least “use proof of stake for cross-ecosystem NFTs”, which “are far more energy-efficient than proof of work (PoW) algorithms and should be preferred whenever possible”.

Earlier, IGDA released a compiled list of arguments against NFTs in gaming. According to its release, 70 percent of respondents said they were not interested in implementing the technology for future use.

Vela also argued that the prevalence of pyramid schemes involving NFTs is another ethical concern as new money from new players is needed in order for the number of purchases of the NFTs to go up. He added that NFT gaming economies allow for a divide due to the inherent “power differentials” between those who use it as their main source of income and other players who play it just for the sake of playing.

IGDA’s report also said that NFT gaming might negatively impact the current fight against climate change, saying “over its lifespan, it is estimated that an average NFT will produce 211kg of carbon dioxide (CO2) into the atmosphere as a result of the process of creating and purchasing the digital artwork. A single tree can offset 60kg of CO2 on average therefore it will take 3.52 trees to offset the life of an NFT”.

“Even now, more research is coming out, and proof of stake is still reliant on ecosystems that are driving carbon emission up further,” Vela said.

Vela then went on to explain that the unregulated character of the NFT environment can negatively affect the life of gamers as there can be players who put all of their employment activity in uncertain ecosystems, without any official protection.

Additionally these players, Vela said, may face a situation where “their resources—their entire investment in their employment activities—are reliant on this unregulated, really uncertain future ecosystem,” he said, “and it can put people in some murky waters, I think”. This, along with other issues, according to Vela, might result in a “socio-political explosion”.