NFT Weekly: China’s Tencent, Minecraft Leave Game

Even with cryptocurrencies banned in China, some of the top traders held on to non-fungible tokens (NFTs), which were not fully covered by the law, although reselling them for a profit was prohibited.

Now Tencent has given up, closed the marketplace to them completely, and will probably close Huanhe, the entity that creates and distributes NFTs. It comes on the heels of a wider crackdown, with social media giant WeChat banning accounts that even mention NFTs and other digital assets.

See also: China’s Tencent to shut down NFT platform

China is not the only place where the NFT business had a big loss this week.

Minecraft, one of the largest massively multiplayer online (MMO) games, with 141 million monthly active users (MAUs), announced on July 20 that it is banning NFTs – and all blockchain technology on the platform – news that will have a significant impact on the wider gaming community’s love-hate relationship with disposable cryptocurrency tokens.

Many hardcore gamers are hostile to NFTs, which they see as one more way for game developers to squeeze extra money out of them, as well as a potential source of purchasable in-game items that give buyers an advantage – called pay-to – victory, which is definitely not a compliment.

Read more: Gaming’s backlash against NFTs is getting organized, threatening crypto token adoption

In a blog post, Minecraft developer Mojang Studios explained that its user guidelines require “all players to have access to the same functionality,” explaining the issue as a matter of inclusion and equal access. “The speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profit, which we believe is inconsistent with the long-term enjoyment and success of our players.”

Beyond that, it said, no developers will be allowed to introduce blockchain technologies into Minecraft or create skins — which change the appearance of a player’s avatar — in-game items, mods or other “scarce digital assets.”

It also pointed to potential scams such as wash trading to artificially inflate the value of NFTs, as well as “carpet pulling” by developers taking money and abandoning projects. Interestingly, it did not mention the high energy use and subsequent pollution of a number of blockchains – a common complaint of NFT opponents.

Marketers still love NFTs…

The brand marketing industry has strongly embraced NFTs, both as stand-alone elements and as a way to stick a “me-too” toe into the metaverse and Web3.

Look here: Since when is dropping a NFT Care Bears Collection a Web3 strategy?

Membership and loyalty program startup Hang has been able to attract a number of major brands, including Budweiser, Pinkberry and the Bonnaroo music festival, to use NFTs as a way to increase sales and brand loyalty by offering people who reach new loyalty program levels, limited edition NFTs that can also have resale value on NFT marketplaces.

See also: Big brands replacing memberships, loyalty programs with NFTs

… And so do thieves

Yuga Labs, developer of the most valuable NFT collections Bored Ape Yacht Club (BAYC) and CryptoPunks, tweeted out a warning that their “security team has tracked a persistent threat group targeting the NFT community.”

Warning that a “coordinated attack targeted multiple communities via compromised social media accounts,” the company asked owners of its avatars — which still attract occasional million-dollar sales prices despite a broader NFT industry downturn — to be vigilant.

Which is probably cold comfort to actor and TV producer Seth Green, who had to spend several hundred thousand dollars to buy back a stolen Bored Ape NFT that he was about to turn into the main character of a TV show he was producing.

Also read: Seth Green’s kidnapped bored monkey shows NFT’s growing commercialization

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