We were so close. As the NFT market suffered one meteoric crash after another, and as some crypto-based games lost money by the hundreds of millions, it seemed for a second there that the gaming industry might come to its senses. But no. This week alone saw two major parties unveiling a commitment to smushing NFTs and video games together.

Square Enix, the legendary publisher that seems intent on burying every ounce of goodwill it accrued over the years and then dancing on the grave, is doubling down on its obsession with blockchain technology.
Earlier this year, Square Enix sold off a handful of prestigious studios—including Deus Ex maker Eidos Montreal and Tomb Raider stewards Crystal Dynamics—for $300 million. Around the same time, the company stated a clear intention to go all in on incorporating blockchain technology into its games. The company’s report for its 2022 shareholders meeting, published this week (via Siliconera), said it plans to introduce “story-focused NFTs” to its games.
It is unclear how, exactly, this blockchain technology will introduce any new features that aren’t already existent in video games. Representatives for Square Enix did not respond to a request for comment.
Also this week, a duo of former PlayStation execs—Michael Mumbauer and John Garvin—announced the formation of a new studio, Liithos (tagline: “from impossible to inevitable”), which plans to develop games on the Hedera crypto network. Mumbauer, who previously co-founded indie studio That’s No Moon, stepped down from his role as CEO earlier this year. (That’s No Moon was established last year and has yet to release a game.) Here’s part of his mission statement for Liithos:
I want to see a world where the characters and stories that I love don’t end after I finish the game. That’s been a dream of mine for several decades. The biggest hurdle to overcome has been that there hasn’t been a meaningful way to connect different entertainment worlds together in the right way. Web 3 will unlock the power to transform the way we engage with entertainment. Imagine reading your favorite comic book or watching the latest season of a show you love, except they are all based in the same amazing world. Even better, by watching the show, you get something that adds incredible value to your enjoyment of the game. Is that possible?
The first game out of Liithos is Ashfall, a post-apocalyptic action game set hundreds of years in the future in the Pacific Northwest. Liithos is currently selling a comic based on Ashfall for $100 (“expected delivery 9/23"). Garvin, who previously wrote and directed open-world survival game Days Gone, will serve as Ashfall’s creative director.
It is unclear how exactly Liithos plans to get a blockchain-based game past the certification processes of historically strict console storefronts. Through a representative, Mumbauer told Kotaku that, “development will take a while, [but] we believe the integration of technologies that will amplify our trans-media goals will come online eventually. Alternatively, we intend [to] put some focus on technology backend to connect mediums together if one isn’t created that we can leverage for Ashfall.”

This week, NFT.NYC put on its fourth annual festival, wherein a horde of crypto bros descend on New York City. One of the main stages was directly across the street from Kotaku HQ; walking from the subway to the office each day meant wading through a sea of fleece half-zips and polyester chinos and red plastic lanyards. Afterhours, attendees flocked to the galleries of Soho and Williamsburg to sip sour Prosecco and speak in hushed, reverent tones about a “Gary V.”
It is one thing to hear about this stuff, to read about it or watch from afar as a venerable publisher of typically excellent games makes abjectly terrible business decisions. It is another entirely to see the fervor so tangibly in person.
We were so close.



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