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The debate over NFTs for video games is heating up – and it's cast a rising NFT platform into the spotlight: Enjin (ENJ-USD). Let's see why…and where three major franchises now fall in the debate.

Minecraft Publisher Says "No" to NFTs

Tell me if you've heard this argument against NFTs:

"Digital art can be copied, moved, or even deleted." NFTs are "speculative" and "not reliable," even "fraudulent."

These were all trotted out on Wednesday in a press release from Mojang Studios, the creator of Minecraft that Microsoft (NASDAQ:MSFT) acquired in 2014.

These are certainly problems in the NFT art world: Artists have seen their works show up on NFT marketplaces – with the proceeds going to someone else. Fraud does happen, with anonymous collections promising their NFTs will make you members of an exclusive (and lucrative) club…that never actually materializes.

But I'd argue that video-game platforms are structured to avoid much of this:

Create assets like character skins, worlds, and "persona items," deploy them directly in the game, with blockchain integration… And how would a thief even find them before they're already minted as NFTs – officially recognized by the game? Plus, there's not a lot of pie-in-the-sky promises to be made here. Your NFT assets either make the game more fun… Or they don't. If they do – they'll be really valuable!

Minecraft knows this, on some level. That's also apparent in the press release! The biggest reason they give for not supporting NFTs is this:

NFT collectibles and rewards "create digital ownership based on scarcity and exclusion… The speculative pricing…encourages profiteering," which "does not align with Minecraft values of creative inclusion and playing together."

It's nice to be idealistic – but this stance has two root causes, in my view.

Firstly: It fits with where gamers are at right now with NFTs. In its "Metaverse Awareness Survey" conducted in May, Globant (NYSE:GLOB) asked U.S. gamers about NFTs, crypto, and play-to-earn models in general:

• 45% of respondents were not interested in crypto, 34% were interested, and 20% were "undecided" on crypto.
• "Nearly 40% would like some mix of both playing and earning within metaverse games"…
• But 81% of them have not purchased NFTs.

Most importantly: Saying "no" to NFTs fits with the business model at Minecraft/Microsoft.

MSFT makes most of its Minecraft revenue by selling console and mobile versions of the game to a fairly young audience. But in just four years, the "Minecraft Marketplace" has become big business, too! "Creators have generated over $350 million from more than one billion downloads of mods, add-ons and other experiences in Minecraft," as Microsoft bragged in its April 2021 earnings call.

However, Microsoft takes a sizeable cut of these millions. In the Minecraft Marketplace, "we have a model that allows us to give more than 50 per cent of revenue to the creators," Minecraft's executive producer said at launch.

If you're wondering why this is phrased as being so generous… That's pretty standard (if not low!) for Web 2.0 platforms. Roblox (NYSE:RBLX), for instance, typically takes 72% of sales! But if this was happening on the blockchain: OpenSea only takes 2.5% of sales; Magic Eden takes a 2% cut – or directly on the network, you could keep all the proceeds by trading NFTs for your games.

Rival publisher Epic Games has a different business model. While it's best known for creating Fortnite, the zombie game with a similarly young audience… Epic Games made its name within the industry with its Unreal Engine.

And to remain a major player (so to speak) in video-game development, Epic Games is leaving the door open to the metaverse and NFTs.

Unreal Engine + Metaverse = Look Out, Steam

Unreal Engine 5 is "the world's most open and advanced real-time 3D creation tool." NVIDIA (NASDAQ:NVDA), for instance, was quick to integrate it with its new Omniverse platform… And NVIDIA and Epic get onstage at game-developer conferences to show off the latest graphics products together.

In April, Sony (NYSE:SONY) invested a cool $1 billion in Epic Games…with another $1 billion invested by KIRKBI (the family business behind the Lego Group)! All of this was to "accelerate [Epic's] work to build the metaverse" for "new digital fan experiences."

Blockchain technology was not explicitly mentioned…

But when Minecraft's statement had the NFT debate trending on Twitter last week, Epic Games founder and CEO Tim Sweeney said he's fine with NFTs:

"Developers should be free to decide how to build their games, and you are free to decide whether to play them. I believe stores and operating system makers shouldn't interfere by forcing their views onto others. We definitely won't."

Again, Epic Games has a different business model than a pure game studio. It also puts out best-in-class tools for other developers – and as they build on the blockchain, Unreal Engine will be there.

Square Enix Brings Millennial Nostalgia to Enjin

Did you know that Final Fantasy VII – the most popular installment of this classic Japanese franchise – is on its 25th anniversary?

Thirty- and forty-somethings can relive it all with commemorative action figures and trading cards. Final Fantasy's publisher, Square Enix (OTCMKTS:SQNNY), will also provide an NFT for each collectible… So you can show off your fandom in your crypto wallet (or cash in!)

"If you didn't know, Square Enix has been around since the mid-1970s and is responsible for creating some of the most well-known video games and video game series ever," write Luke Lango and Charlie Shrem for Saturday's update to our Ultimate Crypto subscribers. Besides Final Fantasy, there's "Dragon Quest and Kingdom Hearts, to name a few.

"Square Enix did its due diligence researching blockchains and decided Enjin would be the best place to launch a set of NFTs to celebrate the 25th anniversary of one of its games." This could also be an early step towards Square Enix's "medium-term goals" of developing games on the blockchain.

Why Enjin Network?

Previously, Luke and Charlie highlighted Enjin Coin (ENJ-USD) as the "Emerging Play on NFTs" for their report on 5 Mass-Adoption Tokens That Will Change the World (exclusively in Ultimate Crypto).

Built on Ethereum (ETH-USD), the leading NFT blockchain, "Enjin has created the hyperscalable and widely used infrastructure underlying the NFT market," reads the investor report. "Enjin has, to date, installed nearly 2 million blockchain wallets, created over a billion tokenized assets (including NFTs), and sold nearly a billion of those assets."

Those wallets and assets all use Enjin Coin for trades. And the EnjinX Marketplace has some "unique technology that allows NFTs to be transferred via QR code scanning." Luke and Charlie see ENJ as "the epicenter" of a market projected at "north of $100 billion one day."

Enjin Coin has been a +278% winner in the Ultimate Crypto portfolio since April 2020. Besides all 5 Mass-Adoption Tokens, you can get the latest investor report: The Burn Coin With 10X Potential. Watch our free briefing now on how to put the "Burn Code" to work for you today.

On the date of publication, Ashley Cassell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. To have more news from The New Digital World sent to your inbox, click here to sign up for the newsletter.

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