NFTs for the gaming industry are long dead

Hello and welcome to Protocol Entertainment, Your guide to the gaming and media industries. This Friday we discuss Sony’s new “digital collectibles” and how the gaming industry is hurting NFTs. Also: what to read, watch and play this weekend.

NFTs are dead. Long live digital collections.

The gaming industry’s complex relationship with crypto concepts like blockchain and NFTs has cooled dramatically as Sony has launched a new “digital collection” feature for a revamped PlayStation loyalty program.

What might have been a golden opportunity for Sony to proudly march to Web3 instead turned into a pivotal moment for the flagged NFT market, as Sony emphasized that it does not actually sell non-tradable digital tokens and has no plans to do so. like this. For gaming companies, NFTs have become damaged goods.

Sony is not alone. Companies in the gaming industry and beyond are moving away from NFTs—sometimes just in name—indicating a reputational crisis for a technology that Web3 enthusiasts claim will be revolutionary.

  • The Sony offer in question, and an incredible one, comes from Grace Chen, the company’s vice president of network advertising, loyalty and licensed products.
  • “Definitely not NFT. No way. You cannot trade or sell them. It does not leverage any blockchain technology and certainly not NFTs,” Chen told The Washington Post, leaving not the slightest doubt about how harmful Sony thinks it would be to tie the crypto market to its valuable brand.
  • Reddit did something similar in its “collectible avatars” announcement last month, choosing not to use the phrase NFT. But Reddit does indeed sell these avatars and uses blockchain technology to indicate their uniqueness and facilitate aftermarket trading.
  • Some big names in the gaming industry stopped praising NFTs and blockchain games after just a few months. Electronic Arts CEO Andrew Wilson described NFTs and blockchain games as “the future of our industry” late last year. It took a step back until February.
  • Microsoft Gaming CEO Phil Spencer said last year that he thinks NFTs can be “exploitative” and that the market is full of scams and speculation.
  • Strauss Zelnick, CEO of Take-Two Interactive, a rare NFT believer at the very top of the gaming world, predicted earlier this year a “reset” for NFTs, where they “take their proper place as part of the entertainment economy.”

The gaming industry has opened up NFTs for two reasons. The first is obvious: some players hate them with a burning passion, and many, at least, are completely ambivalent towards them. The second reason is the crypto crash which saw cryptocurrency prices fall and the NFT trading volume tank.

  • A recent survey of US players over the age of 18 found that 81% had not purchased an NFT. And only 40% of the players surveyed were interested in games won by playing.
  • Axie Infinity, once a promising poster child for the blockchain playground, has suffered a dramatic and rapid decline from grace following a devastating hack of more than $600 million crypto tokens and its crater in-game economy.
  • Parent company Sky Mavis has promised players refunds, but not quite as the price of ethereum on which the game is based has dropped over the past few months.
  • Any company, game or otherwise, that might want to enter the NFT market is probably reconsidering it now. Sales volume on the leading NFT marketplace OpenSea has collapsed, down 75% since May and 90% in the last six months. Company aforementioned It was laying off about 20% of its staff on Thursday.

The underlying concept of NFTs makes sense for gaming. It is the application that should work. One of the most high-profile examples and an important test case for the rest of the industry was Ubisoft’s Digits, which failed pretty quickly.

  • Late last year, the French publisher launched collectible cosmetics in Ghost Recon Breakpoint, a 2-year-old shooter with a then shrinking player base. The backlash was severe, NFTs never rose in value, and Ubisoft shut everything down after four months.
  • No other major game publishers or developers have attempted to launch NFTs since then, and it’s unlikely we’ll see another crack from Ubisoft for a while. When this happens, it may not be called an NFT, but rather a digital collection.
  • One company that won’t give up on the dream is hardcore retailer GameStop, which is launching the NFT market in beta this week. Rather than focusing on game NFTs that it plans to eventually highlight, GameStop sells what’s mostly known as “profile picture” NFTs.
  • The company had a modest trading volume of $3.5 million three days later. But with a 2.25% cut, this equates to a small revenue of $78,750 for the company.
  • If a company best known for stocking memes and selling Blu-ray discs at your local mall is one of the last to hold the flag of this particular NFT brand, it might be time to move on.

NFTs will not disappear completely. But as Take-Two’s Zelnick predicts, we may be seeing a real-time reset as companies distance themselves from NFT expression – a toxic well for marketing – and look beyond far more beneficial initiatives in digital ownership. Blockchain technology could be involved. Or, as Sony understands, it may not require a blockchain.

“I think we’ve only seen the tip of the iceberg. Most of the headlines have been stolen by profile picture NFTs, but I think there are many more use cases,” Mihai Vicol, metaverse leader at market research firm Newzoo, said recently. It’s a very powerful concept when you peel it off. The idea of ​​having a digital item that is verifiable scarce and verifiably yours – it cannot be counterfeit and exists as an original.”

However, Vicol added, “I think gaming companies need to do more and figure out how to best implement these NFTs in games.”

– Nick Statt

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Greg Cross, co-founder and CEO of Soul Machines, and co-founder Mark Sagar, Ph.D., lead their FRSNZ, Auckland and San Francisco-based teams on creating AI-enabled Digital People™️ first to populate the internet and soon the metaverse.

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#TGIF: How to spend your weekend

“Abbott Elementary School” – ABC / Hulu. Move, Ted Lasso: “Abbott Elementary,” a workplace comedy set in a Philadelphia public school, received an Emmy nomination for Best Comedy this week, and rightfully so. Shot as a mock-up, “Abbott Elementary” explores the reality of underfunded public schools without clinging to stereotypes.

No one is coming to “save these children”. Instead, teachers often get by using funny shortcuts to overcome resource shortages and other challenges. And while all the teachers are heroes in my book, “Abbott’s” cast of characters is adorable and fun to watch because they’re flawed, insecure, and weird.

The Road to All-Day XR Glasses — Medium. Apple, Snap and Meta are trying to invent the next big thing: AR glasses that can be worn for hours and ultimately play as big a role in our lives as the smartphone. AR/VR pioneer Avi Bar-Zeev outlines some of the key challenges these companies face and shares his thoughts on how they can be overcome.

“Alien” – Netflix. In this South Korean crime drama, Cho Seung-woo plays a prosecutor who has a lobotomy and prevents him from feeling emotions. It’s a trait that makes him ruthless and incredibly effective at work, but also needs to be kept in check.

Enter Bae Doona, famous for “Kingdom” and “Sense8,” playing a cop tasked with punishing his tough partner and helping him with his blind spots. “Stranger” first came out in 2017, but with Korean food becoming hugely popular on Netflix in recent months (“Squid Game,” “All of Us Are Dead”), it’s time to rediscover this gripping gem of the series.

PatchWorld — Meta Quest. Many music experiences have been made in VR. Some, like Beat Saber and Audica, are more gamified, 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 you need to make your own tracks, while allowing you to get stuck in the strange and trippy underwater worlds with moody ocean spirits. Weird, intriguing and very entertaining.

— Janko Roettgers

A MESSAGE FROM SOUL MACHINES

Soul Machines is at the cutting edge of AGI research with its unique Digital Brain based on the latest neuroscience and developmental psychology research.

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Thoughts, questions, tips? Send them to [email protected] Good afternoon, see you Tuesday.

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