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Sega’s U-Turn: Blockchain Not the Game Changer We Thought

In the gaming industry, the pursuit of the next big innovation is a necessity for survival and success. However, not all innovations are created equal. The recent fascination with blockchain technology by many gaming companies is a prime example. Sega, a major player in the industry, has recently come to the realization that blockchain may not be the future of gaming as many had thought.

Sega’s co-Chief Operating Officer, Shuji Utsumi, announced to Bloomberg News that the company is stepping back from most of its blockchain-related initiatives. This includes both third-party blockchain projects and in-house blockchain games. All potential crypto and NFT products have been put on hold, hopefully indefinitely.

The reasons behind Sega’s decision are as interesting as the decision itself. Utsumi expressed his views on play-to-earn games, stating, “The action in play-to-earn games is boring. What’s the point if games are no fun?” This sentiment resonates with the current state of play-to-earn titles.

However, Sega isn’t completely ruling out blockchain technology. Utsumi intends to keep major Sega properties like Sonic the Hedgehog and Yakuza away from blockchains to prevent devaluation of its content. Yet, less popular IPs like Three Kingdoms and Virtua Fighter may still be open to third-party NFT creators. Utsumi also remained open-ended about the role of Web 3.0 in Sega’s future “super game” initiative, which will likely start releasing in 2026.

Sega’s shift away from blockchain was welcomed by fans who were concerned when the company initially announced its plans to sell NFTs and explore blockchain concepts. Despite the initial hype around NFTs in 2020 and early 2021, many predicted the blockchain bubble would burst, and they were largely proven right.

Other companies like Square Enix, Ubisoft, and Bandai Namco also expressed interest in NFTs and blockchain tech, even as the market showed signs of instability. However, many of these companies have since reconsidered or significantly altered their original plans. Sega is just the latest to make a U-turn on blockchain.

Many gamers have long been skeptical of NFT and blockchain-centric products. Concerns range from the environmental impact of generating these digital tokens to the questionable value proposition of spending large sums on digital receipts for randomized assets and textures. Moreover, many games that incorporate blockchain technology are not only unenjoyable but also exploitative.

The Bored Ape Yacht Club, a notorious NFT collection, released its first NFT game, Dookey Dash, which was essentially a basic endless runner game with a pay-to-win model. The game was only available for three weeks, and the rewards were unclear, leading to a surge in NFT prices, which seemed to be the primary objective.

Companies are beginning to realize that NFTs may not be financially sustainable. While some NFTs have sold for large sums, these are exceptions rather than the norm. More often, NFTs decrease in value over time. For example, a prized NFT purchased by Justin Bieber for $1.3 million in 2022 was valued at $58,000 just a few days ago.

The blockchain space has also been riddled with scams. Last year, Seth Green fell victim to a phishing scam that resulted in the theft of his Bored Ape NFTs. This incident halted the development of a new show. Even without NFTs, cryptocurrency and other blockchain tech have proven to be unreliable and sometimes disastrous. In 2021, hackers stole over $600 million worth of crypto.

While Sega’s decision to step back from blockchain is likely to be welcomed by most, it raises questions about why the company considered the technology in the first place. The signs of a collapse were evident, and blockchain has yet to produce anything of value in terms of game design. With the financial incentive dwindling, it is hoped that more companies will distance themselves from this seemingly doomed concept.

Kernel Reporter

The Kernel Media exists to present responsibly sourced information about the nature of existence. Responsibly sourced, verified information about our world is the backbone of humanity’s progress, and we aim to contribute to this progress with such info.

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