The founder and CEO of Hypgames discusses resisting adding NFTs to their mobile game Ultimate Golf! and why gaming isn’t ready for NFT integration.
Cryptocurrency and NFTs – short for non-fungible tokens – have become increasingly prevalent in the gaming world. While many gaming store platforms have eliminated NFT-based games, many developers have continued to integrate the technology into their games, offering NFTs that take the form of things like special characters skins or items. The integration of blockchain technology in games has been met with much criticism, both for the actual versus perceived value of the NFTs sold and the environmental impact of mining cryptocurrency.
The mechanics of the mobile game Ultimate Golf! could easily incorporate NFTs, offering things like special golf balls or clubs. However, the game’s developers have no plans to do so in the near future, stemming from the belief that it would not improve the user experience or be of any true utility to players. Instead, the game’s team has chosen to focus on limited-time events in Ultimate Golf! to drive user engagement.
CEO of Hypgames Mike Taramykin sat down with Screen Rant to discuss why he doesn’t believe the current volatile state of the NFT market is conducive to in-game integration, and what the future of NFTs in gaming could look like.
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Even though Ultimate Golf! could easily integrate NFTs with things like unique golf balls, you’ve said you don’t think the time is right for that yet. Why?
Mike Taramykin: I think it’s just because the market and the audience for it is different. Everyone right now is interested in crypto and Blockchain and NFT’s for financial gain, meaning that they’re looking to put money in and get more money out.
I think the technology allows for ownership of digital goods, which will really come into play in gaming when people are able to invest in games, play them – and then when they’re ready to move on, be able to sell all the things that they’ve acquired and bought to other people. Not necessarily at a profit – maybe at a profit, there could definitely be that component to it. But essentially use it as a secondary market, like you would have with GameStop buying back your used games, or the ability to sell your car and your golf clubs when you want better stuff, or when you move and don’t need them anymore.
I think people’s desires to play games, where any investment that they make in the game can be recouped when they’re ready to move on will make those games a lot more appealing than games that don’t offer that. I think developers will shift to kind of adopt that.
I also just wanted to draw the similarities to the way free-to-play came on the scene when it did. The idea was that people before that had to go to the store and pay money to buy a game, go home and see if they like it. And then at some point, free-to-play games came out, and you were able to play the game pretty deep – quite a bit of it – and only decide to pay when you wanted to. From a value proposition to consumers, there’s really no fighting free, so game companies realize that if they were going to keep charging paid apps up front or paid software upfront, they were going to slowly run out of customers. Everything kind of shifted to free-to-play or Game Pass subscription models, and the industry has actually grown quite a bit through this. But there was this adaptation.
I think Blockchain is going to force the same kind of adaptation. Because now, instead of all of the money that you put into a game being locked within a game, you will have the ability to trade stuff back with other players and then move on to something else. It’ll be so much more desirable to do it that way, and that’ll cause the shift in development. We’re excited about it. We think that’s something that’s really going to appeal to customers and gamers.
I think, as developers, we’ll learn to adapt to that. And we’ll probably end up doing better, because now if I’m a customer spending and I know that I really want to spend more money, and when I’m done with this game I’ll be able to sell it back, I’m probably gonna be more inclined to put money in. Everyone benefits in that scenario.
We’ll have to design games that can support that, and good business models that rely on people being able to trade in goods. There’s other things we can do to ensure that works, but I think what that’ll do is make people probably spend even more, knowing that they’ll get some of the back. I think that’s brilliant for right now. If your whole goal is to try to buy something and sell it three days later at a tenant’s profit, that’s not really what we’re making this for.
You said the industry’s not quite prepared for integrating NFTs yet. There’s been a few instances where games have tried to add NFTs, and gamers have gotten so angry that a lot of the time they took them out immediately. Why do you think the reaction is so strongly negative at this time?
Mike Taramykin: I think a lot of it is just bad PR for crypto in general. I mean, it’s definitely viewed as a culture type of thing, and if you ask people how they feel about crypto, they’ll respond the same way. Some will love it, and some will be like, «It’s the worst thing ever.»
But it kind of gets to this other point: everything I just described about being able to sell stuff back? You can do that with cash too. Everyone will come back and go, «If all you want to do is sell stuff, that’s fine.» And I think that’s right. My point is that I think Blockchain actually makes this really easy and super decentralized. It makes it easy for people to trade with each other and not have to go through the intermediary.
Because if I own a Toyota, and I want to go buy another car, I don’t need Toyota to help me sell my Toyota to somebody else. I can just do that on my own. There’s something about the appeal of people being able to trade digital goods without the people who created the goods as part of the transaction that I think is ultimately healthy. I think that’s ultimately the interesting bit. I think Blockchain takes the manufacture of the digital good out of the equation, and I feel that’s going to become super appealing.
As far as why people react poorly to Blockchain? I think because they’re thinking about this as just prospectors going in and trying to run up the cost of stuff; selling meaningless things for high sums of money.
I think when we talk about being able to sell your digital stuff back to other people, as a feature that sounds fine. Then the question is, «Why do you need crypto?» I don’t know. I don’t know that you do need it. But what I do know is that, if I’m playing an EA game and I want to sell my EA goods, I don’t know the EA needs to be part of the transaction anymore. And I think Blockchain enables that. That in and of itself brings something to the equation that makes it a two-way transaction instead of a three-way, probably involving your credit card company, with everybody taking a piece of it.
It makes consumers more directly involved in their own things.
Mike Taramykin: Yeah, just like if I want to sell my camera, I go on eBay and sell it to somebody.
One thing about Ultimate Golf! that makes it special is that it’s for playing on your own time. I think that could be a problem if you did integrate NFTs, because part of an NFT’s appeal is often the exclusivity and needing to buy it fast. That could potentially upset a lot of customers who missed it because they didn’t check their phone at the right time.
Mike Taramykin: I think the current NFT audience or market is not sustainable. I think the people that are trading NFTs and stuff like that, in and of itself, I don’t see that necessarily being something that is sustainable on its own.
What you just said, exclusivity and whatnot? Those are just perks. I think those are just reasons people are trying to justify what NFTs are today, which is just video clips and memes and images. It’s really, truly meaningless stuff. But you’re trying to create meaning for it by being like, «But you’ll be part of this club. We’ll give you all this,» and it’s literally not anything you can do today. It’s just future stuff. It’s like, «And you’ll stop smoking, and it’ll be a dating app!» They’re just making stuff up of what it will be the future, just to say that’s why you’re paying thousands of dollars for a GIF.
As far as Ultimate Golf! is concerned, creating this exclusivity is just not a sustainable model. We can’t just keep doing these exclusive clubs, because our whole business is built on scale and mass and having millions of people worldwide do something. We can’t start carving out these little niche areas for everybody, just because they want to spend a little extra. Because the truth is everyone else spends plenty enough; it’s not worth it.
But the reason those things are there now is because it’s just trying to create value; just trying to add something that is also intangible. But it’s a promise on some future thing with really no guarantees, because what you’re actually getting doesn’t really pass the sniff test on why it’s important. But what I’m talking about is like what happens with the underlying technology, which is this whole idea of owning something digital. It’s something that you can’t pick up, but you own it.
When you start getting into clubs in our golf game, or swords in an RPG or something, those are very tangible things to people who play the game. Your ability to be able to trade and sell those becomes the thing that’s important. Owning the item is what you’re paying for; it doesn’t have to be a perk. It doesn’t have to be an invitation to a live stream. That’s just trying to make stuff up to add value.
You’re foreseeing NFTs in games as more items you can use.
Mike Taramykin: It’s an enabling technology. I think it creates a secondary use market for digital goods. That is super easy to understand: «I’m done playing this game, I don’t need to sword anymore. Does anybody want to buy it? How much would you give me for it?» And me being able to be like, «You’ll give me $100? Cool. Here.» Maybe I spent $50 to get it., and I made a profit. Maybe I spent $200 to get it, but at least I got $100 back. But I’m done with it, I’d like to give it to somebody else, and the game company has nothing to do with that transaction.
Because in real life, if I really wanted to sell my golf clubs, the people at Callaway are not involved in me selling my golf clubs to my neighbor. I don’t play golf anymore, or I got new clubs, and he wants them. When I think about NFTs and Blockchain, it allows that. Which is cool, and people want that. Whether there’s profit or not, the whole point is that the real money that you put into a game is not locked in that game.
Right now, it’s really just about investment, and people are just trying to throw in perks. «And we’ll call you on your birthday!» What else can I get? Because I’m really just selling you a GIF, or I’m just selling you a JPEG. I’m just selling you a video clip of something; basically selling you a URL.
There’s been some controversy, if you will, of people having an NFT having an image. And then people just copy and paste it, saying, «I own this too now!»
Mike Taramykin: But that’s because, right now, people are just selling things that are very easy to replicate. I think if there was a golf club in our game, it would have functionality and somebody can’t copy it. It’s literally something in our game. We don’t care who owns it, but we know that it’s a real item.
The technology on our side would be: you come into our game, and there’s an item that we made. It’s showing that you have it in your inventory, and we would honor that. We don’t care where you got it; we just know that you have it. And then on the back end, the transfer of the item from one user to another is what we use Blockchain for.
Can you picture any sort of timeline of the shift in NFTs from easily replicable items to what you’ve been describing?
Mike Taramykin: I just call them vanity items. Because that’s really what it is; just to say that you have it. I’m envisioning a world where those items have a very practical use – and I’m only talking about gaming. I’m not talking about art or music or anything like that. But the idea is that you’re going to sell practical digital goods that you can actually use.
When does that happen? Not that long. Because what I’m saying, in my mind at least, is incredibly practical. I’m seeing people start to think about it that way too. The problem is that when you say crypto gaming, it is still essentially trying to gamify speculative investing. I think at some point, when you take the desire to make money out of the equation, then the utility will become self-evident.
My guess is a year or two, because I think what’s happening now has to blow up. It’s either gonna take off and go to the moon, or it’s gonna burn and people are gonna go, «I’m not doing that anymore!» And then a game developer is gonna be like, «Hey, here’s the thing. If you buy anything in our game and you ever want to sell it? You can. Period, that’s it. If it’s worth more or less, that’s not up to us. But in the meantime, you can use it all you want.»
And I’m starting to see that. Games are starting to take this notion of buying things that you can use. But the audience is still all speculators. And as long as it’s speculators, it’s going to keep people out. It’s going to keep mainstream gamers out, because they’re gonna be like, «This feels like a scheme, and I don’t want to be a part of it.»
Yeah, it can be very intimidating. It’s a complicated concept, so I think it just puts a lot of people off right away.
Mike Taramykin: I think they see it as a scheme, and they don’t want to be the last one holding the bag. I saw a video or something on YouTube about the subject, and the guy used a great term, saying it’s based on the «bigger fool» concept. You just assume there will always be a bigger fool, and you don’t want to be that guy. I think that the part that scares people out of it is that they basically see this as some kind of scheme. «If I get in, what if I’m the last one?»
There’s an aversion to it. I think people in gaming are righteous sometimes – as a group we are. We love to right every wrong, and we see that as not genuine. It doesn’t live up to the high virtue standards of gamers. So, I think there’s going to be that righteous aversion to it. «How dare you try to scam me? Let me stand up on behalf of everybody.» You’re gonna see that a lot.
I mean, you saw that with DLC [Downloadable Content], and you see that when companies try to find a new way to monetize. Gamers are righteous.
Has HypGames been looking into developing any NFT systems at this time?
Mike Taramykin: Yeah, we are always looking at the state of technology and how that might help our products. And just crypto in general. We’ve been aware and following that for years – for many years. We see it as, «This is gonna be really cool one day, and we’re gonna be able to use this one day.» But right now, it’s about something else. There’s no point using it the way we think it should be used, because there’s no one to appreciate it. You’ve got to let the froth come off.
As a business model, we don’t really see the current state of crypto as being the thing. But we think it’s going to evolve, and we think it’s going to become something a lot less speculative and a lot more utilitarian. And at that point, I think we’ll have plenty of ideas ready to go. But right now, for us and the way that we’re going, we have plenty of opportunities to grow our business within more traditional models. We’re just realizing that we will be able to augment and enhance those models with Blockchain technology when the time’s right.
Jumping in too early could definitely put a lot of players off.
Mike Taramykin: We’d have to change what we’re doing. We like what we’re doing, and it’s working. A lot of times, this would be like a opportunistic pivot just to try to get in on something that we think is fundamentally going to go through a major disruption. We are very well aware; we talk about it all the time and think about it all the time. We always do it from the prism of, «How does this help us long-term? How does this help our customers long-term?»
Because we’re ultimately looking to create company value that’s much longer term.
You could also incorporate the celebrity component alongside the NFTs in the future. Has the development team ever considered that?
Mike Taramykin: Yeah. It’s all about actual ownership of digital goods, so the whole idea of having special events or special awards and prizes being given, and then people can trade those? It absolutely makes sense.
If somebody goes in and plays a celebrity event, it may very well be that the awards there are very exclusive to only people who played it. But then they’re available on the open market, like Super Bowl rings. You only get them if you play the Super Bowl, but I can get one on eBay. Doesn’t mean I played it, but it’s got value. I think anything that creates valuable digital items, I think will help. Our point is that those digital items should have a utility beyond just their price. People should be able to use it, and when they’re done, they should be able to sell it. I should be about the item itself, and not this basket of stuff that goes along with owning a JPEG.
Is there anything else that you’d like to say about integrating NFTs into gaming, or about Ultimate Golf! in particular?
Mike Taramykin: I think that NFTs and Blockchain technology, in all likelihood, will play a very relevant part of gaming in the future. But I think that where it’s at right now, and the audience for right now, is not the Ultimate audience. I think it’s going to have to go through an evolution and a transition, where it’s about the utility of the digital goods and not just the vanity of those digital goods. I think when that happens, it’ll play a very important part in the industry.
I don’t think we’re there yet, because I think people are buying these for different reasons. When they’re interested for entertainment, then we’ll have something to talk about. As long as it’s just a financial investment, it doesn’t really appeal to the purpose of our products, which is to entertain people. But I think that transition is coming. You can’t dismiss it as a fad, but you can definitely call it the first stage of a long evolution. And it’s a stage that may not survive – that’s the thing about evolution, right? This may very well cease to operate the way that it is, but I do think it’s the beginning of something that’s going to be very relevant in gaming, and entertainment in general.
Ultimate Golf! can be downloaded from the Google Play store and Apple Store.
Deven McClure is a gaming writer covering news, reviews, and interviews for Screen Rant. A lifelong lover of video games, she began writing for Screen Rant in 2021. When she’s not working, you can undoubtedly find her playing her latest video game obsession – most likely something with farming and crafting. She’s been playing games since early childhood, first becoming obsessed with Animal Crossing for the Gamecube at 8 years old, and has loved learning about them ever since. Originally from California where she studied arts and child development, Deven moved to New York in 2017. After her move, she attended Gotham Writing School with a focus on article and television writing. She now lives in Brooklyn with her boyfriend and cats, Timmy and Tommy – named after the two adorable Animal Crossing characters, of course.
