Riaz Karamali recently joined host Joel Simon on the Industry Insights podcast to discuss the issues and innovations driving the video game industry, including the emergence of the Metaverse and how non-fungible tokens, blockchain and Web 3.0 may underpin it.
How has the popularity of NFTs affected the video game industry?
It’s been transformational. CryptoKitties, one of the first NFT games, has actually been around since 2017. In it, people can breed their own, unique kitties and trade them. That is one concept that has taken off in different ways. The latest game that’s really doing well out there is called Axie Infinity, where people kind of breed these creatures—they’re basically monsters—which battle each other. It’s called the Pay to Play to Earn concept. There are folks who’ve basically left their jobs and are making their money from playing Axie Infinity. But pretty much any video game can incorporate NFTs. The neat thing about NFTs is that they can have an existence outside of the game, so even if the game is discontinued the NFT could still have some value or could be used in another game.
Can you spend a little time explaining what exactly the metaverse is, as well as elaborating on Web 3.0 and how it differs from its predecessor?
Web 3.0 is the decentralized future, where decentralized data lives across the different nodes on the blockchain. It would be very difficult to shut down or censor, it would be encrypted, and it would be easily monetized by the creators with open standards. People talk about the creator economy—this would really be a way for creators to be more connected to their fans and the users, and also for the users to be creators, and so it’s almost a utopian thing, the way some people talk about it. We’ll see how it develops.
What are the legal issues with NFTs?
There are securities issues. Right off the bat. The securities and commodities issues, the way some of the things are being marketed and sold, and you have to counsel your clients about that. But there are a lot of question marks, you know, because the regulators haven’t really spoken very well in that space.
Then there are IP issues in terms of, it’s very easy to grab something from the Internet and turn it into an NFT, but do you really have the right to do that? And we’ve got some great copyright lawyers who I go to to make sure that my clients are doing the right thing there.
Then there are KYC, which stands for Know Your Customer and AML (anti-money laundering) issues.
https://www.jdsupra.com/legalnews/nfts-web-3-0-and-the-technologies-1312160/