Take-Two CEO says blockchain-based online worlds “may not end well”

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Take-Two Interactive CEO Strauss Zelnick has taken the unusual step of publicly downplaying the role of blockchain technology in powering interconnected online worlds, commonly referred to as “the metaverse” by modern technologists. In a conversation with GamesIndustry.biz (spotted by Video Games Chronicle), Zelnick offered a frank perspective on the trend that’s fueling billions of dollars in venture capital spending.

The full conversation covered a number of topics, but Zelnick specifically criticized the number of businesses assembling themselves on the idea of the metaverse or blockchain-based worlds. “When lots of money is being thrown at a word, and there is some of that happening, you can probably guess how it’s going to end for a lot of people, and I think the answer is “not well,'” he stated.

At a distance, you might view his comments as general investing advice, saying that he’s against the idea of people investing in “buzzwords” that “mean different things to different people.” This criticism both applied to the phrase “metaverse” (a shorthand for interconnected online worlds that let players socialize and move between experiences), and blockchain technology (decentralized game networks that are currently used to create “play to earn” or “play and earn” business models).

Zelnick’s comments sharply contrast what we’ve heard from other game industry executives. Both EA CEO Andrew Wilson and former Nintendo of America CEO Reggie Fils-Aimé have voiced enthusiasm about blockchain tech. 

Zelnick was upbeat about what the metaverse represents, and considering that he’s the CEO of the company that publishes Grand Theft Auto Online, he has every right to be. He called himself a “dyed in the wool” believer that players will go to digital worlds to be entertained. 

He’s not thrilled however that so many companies not doing business in online worlds already are making the word “adjacent” to their business strategy, and expecting automatically good results. 

As for blockchain technology, Strauss took a sharper tongue with the business model, especially ones based on the idea of letting players own in-game property. “When a company that didn’t exist two years ago launches with a whitepaper, a blockchain-based metaverse, and sells hundreds of millions of dollars of digital real estate in a two-day period…I’m a little skeptical,” he said.

Strauss’ overall gripe seems to be with the fact that many blockchain companies are leading with the digital world first, and worthwhile experiences second. But as many developers know, what players do in a game world often shapes how the world is created. Going the other way around can leave players with an unclear vision of what they’re getting when they spend all that money on an in-game piece of property.

Take-Two’s CEO didn’t make any mention of the huge energy costs associated with blockchain technology (yes, even some of the proof-of-stake networks, especially those that bridge back to proof-of-work blockchains like Ethereum), or the rampant fraud and theft that’s dominated the space. 

He did however address a common criticism we’ve heard from developers about both “the metaverse” and blockchain technology: the mechanics that these two buzzwords fuel have been technically feasible since as far back as Everquest. Zelnick said that video games have been creating metaverse-like worlds for a long time. 

Tech companies just finally caught on to what game companies have already done so well. 

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