Square Enix describes its comprehensive NFT plans as the market craters

It raised a few eyebrows when Square Enix announced it was selling a few western developers and a slate of its valuable IPs, and would use that money to invest in… the blockchain, among other things. Now we know more specifically what Square Enix’s plans are in that space, which they are laying out amid a crypto market crash and the cratering of NFT values ​​and interest.

But this is what they do:

  • They already created a Blockchain Entertainment Business Division in February of this year.
  • They ended season 1 of a game you’ve probably never heard of, Shi-San-Sei Million Arthur, a blockchain card game. They say they have been “encouraged by the results and feedback of our NFT activities” and will be doing a second season as such.
  • Beyond that, they more broadly explore “profit structures, leeway, and NFT ownership experiences” in the NFT business.
  • They plan to establish blockchain game guidelines and take on scalability with NFT economics. They plan to issue fungible tokens and design earning structures around them. They plan to launch a new NFT brand, an IP based on NFTs.
  • They are investing in Animoca Brands, which focuses on blockchain games and web 3.0, as well as The Sandbox, the “decentralized metaverse” that has made a lot of headlines for the sale of blockchain virtual real estate.

Why does all this sound… very bad to outsiders?

  • We have seen virtually no mainstream success with NFTs in gaming so far. Existing companies that have attempted this, such as Ubisoft, have been ridiculed to the point where, despite creating their own blockchain/NFT divisions, they no longer talk about it at all.
  • Popular blockchain games like Axie Infinity are constantly teetering on the brink of collapse due to the instability of the fundamental economy. Axie’s AXS is down 51% in the past month alone. The game’s Smooth Love Potion has lost 96% of its value, rendering the “play to gain” mechanics unfeasible for many players.
  • NFTs in general seem to have peaked and are now declining rapidly. The number of active NFT wallets is down 88% and NFT sales are down 92% from their peak in September 2021. NFTs that famously sold for tens of thousands are now going for tens or hundreds of dollars.

We’ll see what happens to Square Enix’s plans. They’ve convinced themselves that it’s worth investing in, and while I understand the desire to find an alternative to AAA single-player games that cost hundreds of millions of dollars, in the current climate this feels really bad. like barking at the wrong tree.

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