Vermillion's Forgotten Playland, a social party game set in a dusty attic amongst abandoned plush toys, just rolled out its biggest update ever: formal NFT integration. While the developers at Vermillion (a collaboration between Duckland Games and the Beam Foundation) tout personalization, ownership, and a vibrant in-game economy, I see something else entirely: a regulatory earthquake waiting to happen.
NFTs: Gaming's Pandora's Box?
Let's be clear: slapping NFTs onto a game doesn't automatically make it better. In fact, it often makes it worse. We’ve seen too many projects overpromise and underdeliver. Instead, all players are left with are digital trinkets that are basically worthless and a salty mouth. Forgotten Playland's gamble is different. It’s one thing to assign a financial system to selling jpegs, it’s another to bake an often opaque financial system directly into the gameplay loop.
Forgotten Playland is integrating with Beam Network, an Avalanche L1 chain. This appears to signal a direction where the majority of in-game assets will be freely tradeable. Players will truly own cosmetic NFTs (skins, traits, emotes) earned through gameplay, battle passes, or through limited-edition Toybox NFTs. In addition, they’re launching a Forgotten Playland Token (FP) to fuel this new in-game economy.
Sounds exciting, right? Wrong. And here is where the regulatory red flags begin to wave wildly.
The SEC, and regulators worldwide, are already scrutinizing NFTs, asking the crucial questions: are these securities? Are these investments? If Forgotten Playland’s NFTs and FP token are deemed securities, Vermillion could be in deep legal trouble. This might result in important repercussions for the corporate. We’ve witnessed it time and again with other blockchain projects, and the results are often catastrophic. Imagine the largest civil penalties, wide-ranging cease-and-desist orders, and potential criminal charges on top of that.
The key thing to consider here is not necessarily about how the game markets these assets, but rather how players will perceive or expect the value of these assets. Players are churning through Toyboxes and grinding for their FLUFFY points, which they gain from cosmetic ownership, in-game activity, and quest completion. If they hope to see any sort of ROI from this, the SEC is bound to take notice. That’s no longer enough, and the response that they’re “just cosmetics” or “for personalization" won’t cut it. The intent and the perception matter.
Consumer Protection Nightmare Brewing?
Outside securities law, Forgotten Playland’s integration of NFTs into this project raises grave consumer protection issues. Imagine a scenario where a young player, lured in by the game's cute aesthetic, spends hundreds of dollars on cosmetic NFTs, only to see their value plummet due to market fluctuations or a change in the game's mechanics. Who protects that player? Where's the recourse?
The gaming environment today is already incredibly predatory, with all manner of exploitative models from loot boxes to pay-to-win systems. NFTs, with their built-in price volatility and possibilities for wash trading, pump-and-dump schemes, and insider collusion, would make these issues worse. We’re not just talking about them getting addicted, them losing money, this is them taking it to a whole new level and exploiting them.
The “play-to-airdrop” campaign, powered by FLUFFY points. It encourages players to invest their time and money in the game with the expectation of delayed rewards. This leads to an abusive high-pressure sales atmosphere where players are pressured into playing, often against their better judgment. It’s a bit like hitting up your favorite digital casino -- the house always wins.
Unintended Consequences Echo Forever
The stakes of Forgotten Playland’s NFT gamble go well beyond the game. It’s not just about that specific deal — it’s about the precedent they’re setting for the entire industry. If Vermillion gets away with doing something like this without facing significant regulatory scrutiny, other developers will be the first to take advantage. This would open the flood gates to unregulated crypto gaming, creating a far worse Wild West scenario.
Now, picture that dystopian nightmare, on a larger scale. Where players are inundated at every turn with chances to “spend” real money on virtual goods. In this space, where the line between gameplay and gambling is often hard to see. It’s not just a dystopian vision, and it’s more real than you might imagine.
It's not all doom and gloom. Forgotten Playland could be a catalyst for positive change. At the very least, if regulators pay attention to the game, it will begin a much-needed conversation in the industry. This discussion will touch on NFT use, consumer protections, and the ethics of making play to earn a profitable venture.
This is where transparency and accountability are just as important if not more so to restoration. Vermillion needs to be upfront about the risks associated with NFTs, clearly disclose all fees and charges, and implement measures to prevent market manipulation and protect players from financial harm. Second, they need to work with regulators to help establish a clear regulatory framework for NFT gaming. This will help create a level playing field, fair and equitable to all participants.
This Forgotten Playland could change the course of gaming regulation for all time. Whether that reshaping results in a utopia or dystopia is yet to be decided. One thing is certain: the stakes are incredibly high, and we need to pay attention.
