Sega, a popular game developer based in Japan, has recently made some announcements regarding its stance on blockchain and Web3 gaming. The company has decided to refrain from integrating its flagship franchises into blockchain initiatives, primarily to safeguard the value of its intellectual properties (IPs). As a result, Sega will shelve both in-house developed games and projects from third-party developers.
Once an advocate for blockchain games, the Japanese game development and publishing company has now chosen to withdraw its support for such ventures. In an interview with Bloomberg, co-Chief Operating Officer Shuji Utsumi announced that the company is ending games that use blockchain technology. Furthermore, Utsumi declared that Sega would not grant licenses for its most prominent IPs to third parties engaged in blockchain games to prevent any potential loss of value.
Emphasis on Smaller IP in NFT Projects
However, Utsumi did acknowledge that smaller brands, such as Three Kingdoms and Virtua Fighter, could potentially be involved in non-fungible token (NFT) projects. This represents a significant shift in Sega’s previous stance, as the company had previously been actively engaged in various blockchain game projects, both as a developer and as a licensor of its IPs.
In April 2022, Sega hinted at the incorporation of NFT and blockchain elements into its ambitious “super game” concept, with plans to invest over $800 million in this initiative. Additionally, in October, the company unveiled its first licensed blockchain game, utilizing the popular Sangokushi Taisen franchise and developed on the Oasys technology platform, which specifically caters to blockchain-based gaming projects.
Why is Sega Leaving? Knowing the Reasons Behind Their Departure
Last year, the collaboration announcement sparked many criticisms and meltdowns in the blockchain space. Towards the end of 2022, the FTX incident caused financial troubles for numerous crypto startups, leading to their closure. In early 2023, the market attempted to recover, but the introduction of chatbots diverted people’s attention to the exciting prospects of Artificial Intelligence.
The space is currently struggling to regain its momentum, experiencing ups and downs. Similarly, Sega’s collaboration with Double Jump Tokyo faced heavy criticism, while its rival Konami announced the auctioning of Castlevania NFTs on the OpenSea NFT marketplace for the game’s 35th anniversary, which also received condemnation.
Many gamers have criticized game developers like Sega for adopting blockchain and NFT technology, considering it a profit-focused gimmick rather than a genuine innovation. Could these criticisms be the reason why Sega is no longer pursuing the development of a blockchain game? Utsumi explains that Sega is withdrawing its interest in blockchain because the gameplay in play-to-earn games is dull and lacks enjoyment.
Utsumi, however, mentioned that Sega has not ruled out the possibility of incorporating blockchain features into its games once the technology becomes more advanced. He emphasized that the company should not underestimate the suggestions from blockchain advocates for the gaming industry, even if they may seem unconventional.
Final Thought
Sega has decided to step back from integrating its flagship brands into blockchain initiatives to protect the value of its intellectual properties. While smaller franchises may still be involved in non-fungible token (NFT) projects, the company has chosen to terminate games employing blockchain technology and will not license its prominent IPs for blockchain games. This shift in stance reflects the criticisms faced by Sega and the gaming industry regarding the profit-focused nature of blockchain and NFT adoption. Ultimately, Sega’s withdrawal from blockchain games is driven by a desire for enjoyable gameplay experiences for its audience.