The announcement went down badly, with one video game developer refusing to work with Team17 again unless the push into NFTs was abandoned altogether.
Team17 is abandoning plans to launch an NFT collection inspired by the Worms video game franchise.
The publisher was planning to release a range of collectibles inspired by characters from the series, which has been running since 1995.
Part of the proceeds would be donated to Coin4Planet, a blockchain-based organization that offers a range of sustainability initiatives.
But the announcement went down badly with Team17's community, with one video game developer declaring that it would refuse to work with the company again unless the push into NFTs was abandoned altogether.
The makers of Overcooked, which is also published through Team17, had tweeted:
"We at Ghost Town Games just wanted to reassure you all that Overcooked (and any of our future games) will never engage with NFTs. We don't support NFTs. We think they carry too great an environmental and social cost."
A Eurogamer suggested that staff members within Team17 had also raised concerns about the plans to launch NFTs, but their disapproval fell on deaf ears.
What This Means
The firestorm surrounding the announcement exposes a big problem for gaming brands who are tempted to launch NFTs.
Ubisoft also courted controversy when it revealed NFTs will play a starring role in Ghost Recon: Breakpoint.
While supporters argue that NFTs can allow players to truly own in-game assets, profit from rare items and move them across games, skeptics claim it's yet another way for gaming companies to generate revenue from fans.
Team17's embarrassing climbdown might serve as food for thought for other companies — and it indicates that even using an environmentally friendly blockchain isn't enough to win round consumers.