Gaming companies like Sega are pushing into the NFT arena, but the consequences could be dire for fans and the global climate.
Sega recently announced a partnership to sell NFTs based on its classic franchises – presumably, games like Sonic the Hedgehog, Altered Beast and Crazy Taxi – as well as upcoming unannounced titles. The effort will begin by summer 2021, but fans should be worried, not just about what NFTs will mean for games, but the potential impact on global warming. On closer inspection, the situation is confrontational at best.
NFT stands for “non-fungible token”, a technology that allows digital assets to be authenticated via the blockchain. The benefit, ideally, is that creators can sell art, music, or other content in a way that isn’t easy to copy, because ownership has to transfer. The blockchain makes this data virtually unbreakable. In fact, Christie’s recently auctioned off a piece of digital art for $69 million, and companies like the NBA have started selling their own NFTs.
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Why NFTs are bad for the environment
The (short-term) problem for fans is that the profit potential of gaming NFTs is so high that collectibles that might otherwise be bundled with games or sold as physical items will likely be held back. For Sega, this could hypothetically include some of Sonic’s original production sketches, or a game’s original soundtrack. Neither is strictly necessary for anyone, but selling them as NFTs to a few hundreds of buyers would keep them out of the public eye for years. The worst would be to produce limited edition games – if the last owner was unable to remember their ID or otherwise manage ownership, that version of the game would be lost forever. There are similar issues with conventional DRMs, but NFTs are by definition runtime restricted, unlike something on Steam or the PlayStation Store.
The deeper crisis is that NFTs are usually tied to cryptocurrencies like Ethereum and Bitcoin. Cryptocurrency mining is extremely inefficient – the University of Cambridge notes that for Bitcoin alone, annual power consumption is expected to be around 129 terawatt hours. At least part of this amount will have to come from non-renewable energy sources such as coal or natural gas, which will result in local pollution and increased greenhouse gases. NFT providers of course have the option of paying for carbon offsets, but that doesn’t solve the pollution problem and bite into the profits that motivated them.
NFTs have some environmental benefits: one less artbook means fewer trees cut and one less figurine means less plastic or metal consumption, not to mention the impact of packaging and shipping. But they’re far from an ideal solution, and they’re transparently built with profits in mind rather than the public good. Sega and the rest of the games industry may have to settle for less restrictive digital content if they are to satisfy all concerns.
Next: Why SEGA Fans Are Upset About NFTs
Sources: Sega, University of Cambridge
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