GAME NFT

NFTs in Gaming: More Legal Issues

NFTs in Gaming: More Legal Issues

NFT, this acronym for “non-fungible token” or “non-fungible tokens”, is causing a lot of ink to flow in the world of video games.

Sometimes it is seen as the future of the sector, sometimes it is condemned as a source of speculation to the detriment of the gaming experience[1], NFTs are not unanimous, at least right now. Since we are not framed by special legislation, faced with a legal gap, should we try to attach them to the current law?

What is it about ?

NFTs can be defined as proofs of ownership of unique digital content that uses the blockchain to guarantee its authenticity. These digital goods potentially have a very wide spectrum, images, videos, music. He recently received a lot of publicity in the art world after the record $69.3 million sale of artist Beeple’s “Everydays: the First 5000 Days”[2], there are more NFTs. In video games, these virtual objects are for example integrated into the game as equipment (weapons, helmets, uniforms in the game “Ghost Recon” by Ubisoft), characters or even in entire games as in “Axie Infinity”.[3]. The terms of sale and subsequent resale of NFTs are generated by a “smart contract”, that is, an agreement resulting from a computer program that allows the transaction to be carried out in a dematerialized way.

Why are NFTs attractive?

NFT allows to materialize, so to speak, in the digital world the title of ownership of a unique digital asset and to authorize its sale to a buyer and its resale. The whole point of NFTs is that they can in principle circulate freely on the blockchain. As an inviolable certificate of a digital file, the NFT therefore has a legal benefit for this fact, namely it can materialize the transfer of ownership of unique digital content by transferring its certificate, the NFT associated with this digital asset. . For now, in the absence of a legal framework for NFTs, the NFT sale agreement is therefore particularly important in determining the terms and conditions of such sale between the NFT author-issuer and the NFT buyer. However, this proprietary right is nuanced by the technical limitations necessarily associated with the NFT economy. They are generally not exchanged directly, but through intermediaries, third-party platforms, one of the most famous of which is “OpenSea”.[4]who organize these businesses and prescribe their general conditions of sale.

Monetization of player contributions?

The “play to earn” model is a shocking argument to defend the introduction of NFTs in video games. The ability to share value from publishers to players is highlighted. The stated goal would be to allow players to create game items to own and sell to other players, thus generating income.

This is a crucial point to anticipate in game licenses. The ability offered to the player to create content opens up the infringement of intellectual property rights associated with the game that players could therefore potentially claim for the creation of original NFT-locked digital content. Some publishers will therefore remain cautious before introducing NFTs into the “game” or ensure that they are tightly controlled as the legal issues are important and structuring.

Critics of NFTs reiterate the expected legal risks

Integrating NFTs into video games is not trivial and some studios had to give up in the face of backlash from players who criticized their introduction[5]. If for some players in the sector, led by Ubisoft, which launched its platform “Ubisoft Quartz” in December 2021.[6] NFTs rhyme with the future of video games, for others NFTs should be banned due to their speculative nature, especially when resold, and the expectation of profit associated with such an approach, a departure from the primary purpose of the game. , entertainment.

Legally, apart from the tax consequences of the income generated by this activity on the horizon, NFTs could fall under the regulations applicable to gambling and gambling controlled by the National Gaming Authority, as (ARJEL at the time before the name change) took over in 2018 .the issue of paid “loot boxes” or “loot boxes” that contain random items that players can purchase for payment but without knowing the exact contents[7].

In the area of ​​intellectual property rights, the NFT phenomenon also leads to abuse and can appear to be out of control. NFT markets can be the scene of exchange of digital goods that include trademarks or works of third parties that infringe their rights. Therefore, it should be feared that these platforms are new channels of counterfeiting with rather limited room to maneuver against them, since the latter are the hosts of the content, their responsibility is reduced. Consequently, among the online supervision to be established, that of these platforms is now imposed on rights holders. Additionally, in order to regulate and control NFTs, perhaps we will see the birth of an official registry of NFTs like the INPI for industrial property titles in France?

[1] Les Echos, “Why NFTs have become a touchy subject in video games”, published on December 23, 2021.

[2] https://onlineonly.christies.com/s/first-open-beeple/beeple-b-1981-1/112924

[3] https://axieinfinity.com/

[4] https://opensea.io/

[5] Les Echos, “Why NFTs have become a touchy subject in video games”, published on December 23, 2021.

[6] Les Echos “Blockchain: French video game giant Ubisoft launches NFT”, published on December 7, 2021.

[7] Report on the work of the Regulatory Authority for Online Games of Chance for 2017-2018

Leave a Comment