Showbiz, Gaming Execs Try to find new NFT uses

If non-fungible tokens (NFTs) are to become anything more than a crypto-powered way to buy, sell and display images of Bored Apes and CryptoKitties, entertainment companies will need to use them as more than a digital version of marketing add-on in the vein of a Darth Vader or Luke Skywalker action figures that George Lucas pioneered with “Star Wars” from 1977.

They must become part of it, Deloitte said earlier this year in a report looking at five trends that could drive growth in the media and entertainment industry. That’s not to say that NFT’s ability to provide scarcity and engagement as collectibles won’t be part of the mix.

But the unique digital assets can “lead to more digital product innovation [and] greater empowerment for their creators,” said Deloitte in its 2022 Media & Entertainment Industry Outlook.

One company trying to do that with NFTs is Fox Entertainment, which is using up to $100 million of the billions of dollars it saves by not building a streaming service to create “a competitive advantage in building a business on the blockchain,” CEO Charlie Charlie Collier told Variety this week. “This will pay dividends well into the future.”

Another is Animoca Brands, whose roots are in blockchain and NFT gaming. An early investor in CryptoKitties, the popular 2017 cat breeding game that first brought NFTs to the public’s attention when the cute kittens were selling for up to $100,000, Animoica has expanded significantly since then.

It is now the largest investor blockchain projects in Asia, Bloomberg said, pointing to more than 340 of them across gaming, finance and social media. These also include Axie Infinity, a “play-to-earn” crypto game that blockchain supporters have called the future of gaming. It is also arguably the most successful NFT project of any kind, with 2.1 million traders having bought, sold and resold the Smooth Love Potion NFTs that are the key to gameplay 17 million times, according to DappRadar.

They spent $4.2 billion on it. And while much has been made of its crashing daily user numbers — 250,000 compared to 2 million at the height of the crypto boom late last year — by opponents of the play-to-earn concept, who call it “pay-to-win, “It’s a couple of other factors come into play. Notably, the crash of the current crypto winter cut into potential earnings, and one of the biggest crypto hacks ever — the $625 million Ronin Network attack in March — targeted a cross-chain payment bridge used by customers.

See more: The $625 million hack shows a larger crypto security issue

Get creative

Fox’s Blockchain Creative Labs is run by Scott Greenberg, who also runs the studio behind the popular animated series “Bob’s Burgers.”

Greenberg’s first major NFT test, Variety said, is “Krapopolis,” an animated show set in ancient Greece. A “drop” of 10,420 “Krap Chicken” NFTs expired earlier this month, but the focus is not to make money from those sales, he said. They come with a variety of perks and extras, ranging from NFT-gated screens and cast meet-and-greets to voting for things like an episode’s ending song and even an animated extra.

Set to launch next year on Fox, “Krapopolis” is “hitting practice,” Greenberg told Variety.

“Building a fully realized world and a cast of crazy characters on the blockchain has never been done before,” he said. “And in terms of fan experience, it will come to life in a way no other show has.”

In the longer term, Collier said he sees the Blockchain Creative Labs business as a bridge to Web3, a still-theoretical future version of the web believers say will be built on blockchain and free from the control of big tech.

With NFTs able to do things like hold video and generate royalties for creators on each resale, Collier compared it to an anti-Napster that allows content owners to make money on every transaction.

“We’re reinventing home video,” he said.

Community spirit

Animoica Brands CEO Yat Siu said much the same about Web3 to Bloomberg, calling it a way to give people ownership of their virtual property and break big tech’s “digital dictatorship.”

While Animoica has had some big hits – it also has a stake in two other best-selling NFT collectible lines, Bored Ape Yacht Club and CryptoPunks, making the former a video game – it still has a lot to prove.

Whatever the reason, Axie Infinity’s best days may be behind it, and so far no one else has been able to make another big game to make money, let alone a AAA-level hit. There is a lot of resistance to the concept among hardcore gamers, which is a necessary component of a popular gaming ecosystem, and it has run into problems with another high-profile game.

There’s a three-year-old racing game, F1 Delta Time, where players spent hundreds of dollars on NFT cars only to see them become useless and worthless when Formula 1 didn’t renew their license.

But his long-term goal, Siu told Bloomberg, is to build an organization where the sellers and buyers — the game makers and the players — can come out on top.

“As an organization, we believe in the capitalist incentive,” he told Bloomberg. “It’s not that everything has to be equal in distribution, but rather, what you end up making still has to have a net benefit to everyone else in your community.”

Which is a goal that NFT-based games to make money have yet to prove it can fulfill.

For all PYMNTS Crypto coverage, subscribe to the daily Crypto newsletter.