GameStop facilitates sale of NFTs for games not owned by seller
posted Sunday Aug 7, 2022 by Scott Ertz
NFTs are a controversial topic any time they show up, but even more so in the gaming space. Usually, the controversy comes about because game developers are considering or announcing the inclusion of the technology into their games. However, this week, NFTs sparked problems within the gaming industry when GameStop's NFT marketplace facilitated the sale of stolen content in the form of NFTs.
Like many NFT marketplaces before it, the GameStop NFT marketplace allows people to sell NFTs of their wares while taking a small percentage of the sale. In this case, GameStop pockets 2.25% of the total sale of the NFT. One of the things that makes GameStop's implementation unique is its focus on games, including fully playable HTML5 games right in your wallet or the marketplace.
Much of the content on the marketplace is legit, including the popular MetaBoy collection - some 10,000 animated GIFs. This collection accounted for around 25% of the total trading volume on the platform's first day. The trading volume was so low that 4 NFTs represented over half of all activity. But, while the trading volume was low, it didn't stop problems from occurring, including the sale of stolen goods.
The controversy surrounding the GameStop NFT marketplace came about from a collection called NiFTy Arcade (archived link). The collection featured a series of fully playable games, something that GameStop was hoping to include on the site. The problem, however, is that the collection was not owned by the seller. The NFTs in question were minted against stolen goods.
This has been a recurring issue in the NFT space. HitPiece seemingly knowingly facilitated the sale of stolen musical and comedic recordings earlier this year. The platform came under fire by RIAA for the sales, shining a light on the issue. Now, we have games being stolen, minted as an NFT, and sold in a similar manner to the recordings on HitPiece.
Unlike HitPiece, GameStop has suspended the account for the seller of the NiFTy Arcade, but in the NFT world, that is too late. The winter ha already pocketed the currency from the sale, which is valued at tend of thousands of dollars. And while the NFTs are no longer listed on the marketplace, the existence of the NFTs at all means that they will be virtually impossible to remove.
The problem with NFTs
Fake NFTs can be a big business for the winter, and incredibly damaging for those form whom the content is stolen. The blockchain technology is distributed, meaning that once the data exists, it exists. It is nearly impossible, depending on the blockchain upon which it is built, to remove existing content from it. So, for the indie developers who were stolen from, the NFTs represent the end of their ability to monetize their own content.
This is an inherent issue with NFTs. There is no ownership verification in most cases, meaning that someone could download the CBS logo from the company's website, mint an NFT and sell it, claiming that the owner would then own the rights to the CBS logo. Except CBS is uninvolved and unaware of the issue. And, by the time everything is cleared up, the person who sold the NFT has the money and the person who bought it has absolutely nothing to show for it. This is the dark world of NFTs that proponents don't want to admit exists.