Minecraft developers won’t allow NFTs on gaming platform

Minecraft will not allow non-fungible tokens (NFTs) to be used on the popular gaming platform, with the company describing them as antithetical to Minecraft's "values of creative inclusion and playing together".

NFTs confer ownership of a unique digital item, typically an image or a video, with the ownership recorded on a decentralised digital register known as a blockchain.

Digital files can usually be copied or deleted for free, but a NFT identifies the owner of the original file for the purposes of buying, selling, or trading the ownership - usually for cryptocurrency.

The hype around NFTs led to a boom in sales peaking at US$12bn (AU$17.4bn) worldwide in January. However, coinciding with the downturn in cryptocurrency, sales recently began crashing to a 12-month low of US$1bn (AU$1.45bn) in June.

Minecraft, which allows users to build whole virtual worlds, is highly customisable. Over the more than 10 years the game has existed it has built a huge community of users who design skins, mods and maps for the game.

Minecraft represented an attractive potential market for NFTs, with a user base - estimated at more than 141 million by August 2021 - already engaged in sharing unique digital items developed for the game.

But the Microsoft-owned development studio behind Minecraft, Mojang, has put an end to speculation NFTs could be allowed in the game. In a blog post on Wednesday, the developers said blockchain technology was not permitted, stating it was antithetical to Minecraft's values.

"Each of these uses of NFTs and other blockchain technologies creates digital ownership based on scarcity and exclusion, which does not align with Minecraft values of creative inclusion and playing together," the company said.

"NFTs are not inclusive of all our community and create a scenario of the haves and the have-nots. The speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profiteering, which we think is inconsistent with the long-term joy and success of our players."

Mojang said the creations in Minecraft had intrinsic value and there had been instances where NFTs were sold at artificially or fraudulently inflated prices.

The studio said it was concerned third-party NFTs may not be reliable and could end up costing players. It also said it was worried an implementation of Minecraft built entirely on blockchain technology could also disappear without notice - meaning players would have lost their investments.

This is referred to in the crypto community as a "rug pull", where the developers behind a crypto project shut down the project and take off with the money. This appears to have already happened with one third-party Minecraft project called Blockverse. PC Gamer reported in January the project disappeared after over US$1m (AU$1.45m) had been invested.

Mojang left the door open to using "more secure" blockchain technology in Minecraft in the future but said it had no plans to allow it at present.

One group that was working on building NFTs into Minecraft said the move was a "step backwards in innovation" and if they were banned they would need to pivot to another gaming platform.

Another wildly popular and similarly customisable game, Roblox, which allows for in-game purchases of items, has not yet announced a position on NFTs. However, the company's chief business officer, Craig Donato, told VentureBeat in April he didn't see why the game would not allow NFTs and it was more a question of when.

Other gaming companies like Square Enix and Ubisoft are also toying with NFTs. This week Square Enix announced that for the 25th anniversary of Final Fantasy VII next year people would be able to get physical trading cards with digital versions as NFTs.