Crypto exchange FTX has unveiled details about its new gaming division which it expects to launch in a matter of weeks.
The president of FTX US, Brett Harrison, told City A.M. that the exchange’s new gaming business has two main objectives. Firstly, the new unit will plot partnerships, investments and acquisitions in the gaming industry. Secondly, it will provide tech and services to publishers that want to incorporate NFTs, crypto assets and blockchain into games.
“An example might be a game that wants to be able to onboard their users into a crypto ecosystem so they can buy and sell items or trade certain kinds of tokens,” said Harrison. “Rather than having to build that on their own, they can work with a partner like FTX that can provide services underneath the hood of the actual game.”
Multi Billion Dollar Market
Having launched in 2017 FTX has quickly grown into one of the most valuable firms in the crypto industry with a valuation of $32bn. According to Harrison, who was bought onboard last May by FTX’s 29-year-old founder Sam Bankman-Fried, his former colleague from Jane Street Capital, multiple synergies exist between the worlds of gaming and crypto.
“There’s a huge multi billion dollar market for this already,” said Harrison. “Gaming is a compelling use case for blockchain technology because users are already buying and selling in-game items, whether that be logins to a character that they’ve levelled up, or it’s some sort of in-game currency they use to purchase items, skins or avatars.”
FTX plans to help games to assist games developing play-to-earn models using tokens as well as creating price discovery market mechanisms which would allow people to trade in-game assets in real world marketplaces. The push into gaming is part of FTX’s broader ambition to become a major technology white label provider to the world Harrison said.
“Really what it is under the hood is opening accounts at FTX US,” Harrison said, in reference to apps such as Stock Twist which have already integrated the company’s trading technology. “At the end of the day, we want everyone to be able to use our services. And the more users we have, the easier it is to build up these new product sets.”
“We certainly hear a lot of criticism”
Not everyone is sold on the idea of integrating crypto assets with gaming. Detractors raise objection to the environmental impact of pushing energy intensive crypto assets, such as NFTs, on gamers. The perception that companies are seeking to cynically monetise game play and lure inexperienced investors into trading speculative assets has also prompted backlash.
“We certainly hear a lot of criticism,” said Harrison, who acknowledged that a range of possible integrations of crypto and gaming exist which span from being “perfectly benign and acceptable” to drawing people into crypto trading “in a way that would be irresponsible.”
In the UK, advertising and financial regulators have raised the alarm about promotions for digital assets which target mass audiences without explaining the risks to inexperienced investors.
“We want to promote a healthy interaction between blockchain technology which can be completely independent from cryptocurrency trading,” Harrison continued. He stressed that “first and foremost” FTX wants to work work with companies building games that are “primarily free and fun for everyone to participate.”