I frowned a bit when Square Enix announced that it would sell a pair of western developers and valuable IP and invest that money in blockchain and more. Now we know more specifically what Square Enix’s plans are for the space, which lies in the midst of a crypto market crash and a crater of NFT value and interest.
But what they do is:
- As of February of this year, the blockchain entertainment division has already been established.
- They just finished season 1 of a game they’ve never heard of, Shi-San-Sei Million Arthur, a blockchain card game. They say they will have a second season “inspired by the results and feedback of our NFT business.”
- Beyond that, the NFT business is exploring “revenue structure, scope of play, and NFT ownership experience” more generally.
- We plan to establish guidelines for blockchain games and secure scalability with the NFT economy. They plan to issue a replaceable token and design a revenue structure based on it. We plan to launch a new NFT brand IP based on NFT.
- They are investing in Animoca Brands, which focuses on blockchain gaming and Web 3.0, and The Sandbox, a “decentralized metaverse” that has made a lot of headlines for selling virtual blockchain real estate.
Why does all this sound… so bad to outsiders?
- We’ve seen very little of the mainstream success of NFTs in gaming so far. Existing companies that tried to do this, like Ubisoft, were ridiculed to the point of not talking any more while creating their own blockchain/NFT divisions.
- Popular blockchain games like Axie Infinity are constantly on the brink of collapse due to the instability of the fundamental economy. Axie’s AXS is down 51% over the past month alone. of the game soft love potion It has lost 96% of its value, and many players are no longer able to use the “play for profit” approach.
- In general, NFTs seem to have peaked, and now sharp decrease. The number of active NFT wallets has decreased by 88% and NFT sales are down 92% from their September 2021 peak. NFTs that were famous for selling for tens of thousands of dollars are now tens or hundreds of dollars.
We’ll see what happens with Square Enix’s plans. They convince themselves this is worth the investment, and understand the aspiration to find alternatives to AAA single-player games that cost hundreds of millions of dollars, but this is very much like barking the wrong tree in the current situation.