For the gaming industry, NFTs are already dead
Hi, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industry. This Friday, we discuss Sony’s new “digital collectibles” and how the gaming industry has soured on NFTs. Also: what to read, watch and play this weekend.
NFTs are dead. Long live digital collectibles.
The gaming industry’s messy relationship with cryptocurrencies such as the blockchain and NFTs disappeared dramatically yesterday when Sony launched a new “digital collectibles” feature for a renewed PlayStation loyalty program.
What may have been a golden opportunity for Sony to march proudly into Web3 became instead a telling moment for the flagship NFT market, as Sony emphatically emphasized that it did not actually sell digital tokens of the non-fungible kind and did not had some plans to do so. so. For gaming companies, NFTs have become damaged goods.
Sony is not alone. Companies across the gaming industry and beyond are distancing themselves from NFTs – sometimes just by name alone – in a way that signals a reputation crisis for a technology that Web3 enthusiasts claimed would be revolutionary.
- The Sony quote in question, and it’s amazing, comes from Grace Chen, the company’s vice president of network advertising, loyalty and licensed merchandise.
- “They are definitely not NFTs. Definitely not. You can not trade or sell them. It does not utilize any blockchain technologies and definitely not NFTs,” Chen told The Washington Post, leaving no trace of doubt as to where Harmful Sony thinks it would be linking the crypto market to its valuable brand name.
- Reddit recently did something similar when it announced “collectible avatars” last month, and chose not to use the term NFT. But Reddit actually sells these avatars and uses blockchain technology to highlight their unique and easy aftermarket trading.
- Some of the bigger names in the gaming industry have stopped praising NFTs and blockchain games after just a few months. Electronic Arts CEO Andrew Wilson called NFTs and blockchain games “the future of our industry” late last year. In February, he had retired.
- Microsoft Gaming CEO Phil Spencer said last year that he felt NFTs could be “exploitative” and that the market was full of scams and speculation.
- Take-Two Interactive CEO Strauss Zelnick, a rare NFT believer in gaming’s top rankings, predicted earlier this year a “reset” for NFTs where they “take their rightful place as part of the entertainment economy.”
The gaming industry turned on NFTs for two reasons. The first is obvious: Some players hate them with a burning passion, and many are at least completely ambivalent about them. The second reason is cryptocurrency, which has caused cryptocurrency prices to plummet and the NFT trading volume idea.
- A new survey of American players over the age of 18 found that 81% of them had not bought an NFT. And only 40% of the players surveyed were interested in games to make money.
- Axie Infinity, once a promising poster child for the blockchain gaming space, has experienced a stunning and rapid fall from grace after a devastating hack of more than $ 600 million in crypto tokens and a crunching economy in the game.
- The parent company Sky Mavis promised to reimburse players, but not in full because the price of ethereum, on which the game is based, has crashed in recent months.
- Any company, game or other, that may have been interested in jumping into the NFT market, is probably considering now. Sales volume in the leading NFT marketplace OpenSea has collapsed, falling 75% since May and 90% in the last six months. The company so around 20% of employees were laid off on thursday.
The underlying concept of NFTs makes sense for gaming. It is the implementation that needs work. One of the most high-profile examples, and a telling test case for the rest of the industry, was Ubisoft’s Digits, which failed quite publicly – and quickly.
- Late last year, the French publisher launched collectible cosmetics in Ghost Recon Breakpoint, then a 2-year-old shooter with a shrinking player base. The setback was severe, the NFTs never rose in value and Ubisoft closed the whole thing four months later.
- No other mainstream game publisher or developer has tried to launch NFTs since, and it may be unlikely that we will see a new crack from Ubisoft in a long time. When that happens, it may not even be called an NFT, but instead a digital collectible.
- One company that will not give up the dream is GameStop, the hard-working retailer that this week launched its NFT marketplace in beta. Instead of focusing on game NFTs, which they plan to highlight in the end, GameStop largely sells what are known as “profile picture” NFTs.
- The company achieved a modest $ 3.5 million in trading volume after three days. But with a 2.25% cut, it amounts to a minimum of $ 78,750 in revenue for the company.
- When a company best known for its meme share and Blu-ray disc sales at your local mall is one of the last to hold the flag for this particular NFT, it may be time to move on.
NFTs will not disappear completely. But as Zelnick from Take-Two predicted, we can see a real-time reset as companies distance themselves from the NFT phrase – a poisoned well, from a marketing perspective – and look beyond to much more useful impressions of digital ownership. Blockchain technology may be involved. Or, as Sony has found, it may not need a blockchain at all.
“I think we’ve only seen the tip of the iceberg. Most of the headlines were stolen by NFTs with profile pictures, but I think they have far more use cases, Mihai Vicol, the metaverse leader at the market research firm Newzoo, told me recently. “I think the concept of an NFT if you remove it is a very powerful concept. The idea of owning a digital object that is demonstrably scarce and confirmed yours – it can not be forged and it exists as an original.”
But, Vicol added, “I think gaming companies need to do more work and figure out how they can best implement these NFTs in gaming.”
– Nick Statt
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Soul Machines co-founder and CEO Greg Cross and his co-founder Mark Sagar, Ph.D., FRSNZ lead their Auckland and San Francisco-based teams to create AI-enabled Digital People
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#TGIF: How to spend your weekend
“Abbott Elementary” – ABC / Hulu. Move Over, Ted Lasso: “Abbott Elementary,” a workplace comedy set in a public school in Philadelphia, received an Emmy nomination for best comedy this week, and rightly so. “Abbott Elementary” is shot as a mockumentary and explores the reality of underfunded public schools – without getting stuck in clichés.
No one comes to “save these children.” Instead, teachers succeed, and often use fun shortcuts to overcome resource scarcity and other challenges. And even though all teachers are heroes in my book, “Abbott’s” character group is so lovable and fun to watch because they are imperfect, insecure, and quirky.
The Road to All-Day XR Glasses – Medium. Apple, Snap and Meta are all trying to come up with the next big thing: AR glasses that can be worn for hours at a time and ultimately play as big a role in our lives as the smartphone. AR / VR pioneer Avi Bar-Zeev summarizes some of the key challenges these companies face, and shares their thoughts on how they can be overcome.
“Stranger” – Netflix. This South Korean crime drama shows Cho Seung-woo as an actor who had a lobotomy that made him unable to feel emotions. It is a trait that has made him ruthless, and incredibly effective in his job, but also needs to be kept in check.
Enter Bae Doona from “Kingdom” and “Sense8” fame, who plays a police officer who has the task of burying her steely partner and helping him with his blind spots. “Stranger” debuted for the first time in 2017, but with Korean food that has become hugely popular on Netflix in recent months (“Squid Game”, “All of Us Are Dead”), now is the perfect time to rediscover this gripping gem of a show.
PatchWorld – Meta Quest. There have been many varieties of music experiences in VR. Some are more gamified, like Beat Saber and Audica, while others try to reinvent more traditional studio or DJ environments in VR (Electronauts, Tribe XR).
PatchWorld aims to combine the best of both worlds by offering access to sequencers and everything else you need to create your own tracks, while allowing you to immerse yourself in weird and trippy underwater worlds with moody sea spirits. It’s weird, exciting and a lot of fun.
– Janko Roettgers
A MESSAGE FROM SOUL MACHINES
Soul Machines is at the forefront of AGI research with its unique Digital Brain, based on the latest research in neuroscience and developmental psychology.
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Thoughts, questions, tips? Send them to [email protected]. Enjoy the day, see you on Tuesday.
