Selling out an NFT collection is just the beginning

The NFT market may have cooled significantly, but companies that made huge profits in the boom times are plowing those revenues back into traditional and new media to put eyes back on their creations.

Why it’s important: NFTs don’t just sell photos to people who like photos. Owners place high expectations on creators to continue to bring attention to the collection, because that’s what makes the value of their digital items appreciate.

Status: One NFT creator told us they’re doing it because communities demand it, despite some efforts to circumvent the creator royalties earned to fund the effort.

What they say: Dotta, an executive at Magic Mountain, creators of NFT collection Forgotten Runes Wizard Cult, tells Axios via email that NFT owners never stop demanding more from creators. He said via email, “You are expected to:

• “have a free coin
• “airdrop new tokens to holders
• “build an MMO metaverse
• “make a tv show
• “make goods
• “and take zero royalties.”

Context: “Everything in this room is attention-grabbing,” says Dotta in an interview.

• For teams that earn royalties, they make money every time there is attention. If prices fall and people get out, they still get a return on those sales.
• “It’s clear that everyone is happier when the price goes up,” he notes.
• But that need for attention is why teams that want to be a big NFT project can’t stop when NFT is released. They need to release more stuff that keeps their NFTs in the conversation.

Zoom in: For Rune Wizards, the secret sauce is lore. Magic Machine owns the overall collection – the larger IP and game world. They get to provide the big picture of their world, but each wizard NFT owner can create a story and personality for their specific wizard or wizards.

• Although it has been more than he bargained for, this creative emphasis reflects what Magic Machine’s founders wanted. “My business partner and I have always wanted to create a world,” he said.
• Magic Machine has already released a cartoon about their world, a TV show is coming, there will also be games and integrations with different virtual worlds.

The big picture: If someone remakes a TV show, saysix specific NFT characters from a larger collection (that’s 10,000 wizards), most people in the NFT world believe this will at least increase prices the entire collection.

• Of course, this hasn’t been tested yet, but Magic Machine is looking to take it even further, while always being wary of securities regulators.
• “We have been working with our legal counsel to develop a mechanism for a way to send royalties back to our holders without violating securities laws,” he said. “I’ll have to be a little fuzzy on the details for now.”

Yes, but: Different teams have different approaches. Another major NFT project, Substantiv, has a similar aesthetic to the wizards, but it functions less like a studio and more like a fund.

Of the note: He says the one thing that took a lot more time than he expected was social, just communicating with the Wizards community. He thought it would be something like 20% of his time. It’s more like 80%.

• “I think there’s something about high personal accountability where you play the role of both the artist and the broker and the manager and the art gallery,” he says.

Bottom line: “If you think dropping an NFT collection will make you an instant millionaire, it’s not really going to happen. It’s more of a Faustian bargain,” he told us.