False exit, true entry: SEGA is raising the banner in the Web3 blockchain gaming arena

SEGA enters Web3 blockchain gaming.

Last week, gaming giant SEGA announced its “exit” from the blockchain gaming market and shelved related project plans under development. Shuji Utsumi, the company’s chief operating officer, explained that the main reason for this decision was the collapse of the global cryptocurrency industry. “Exiting” the chain game market can avoid the devaluation of its content IP to the greatest extent.

Frankly speaking, SEGA’s move is indeed sudden and unexpected, because for a considerable period of time in the past, SEGA has been actively embracing emerging technologies such as blockchain and NFTs.

• In April 2021, SEGA announced a partnership with Japanese NFT issuer double jump.tokyo and invested in it to use blockchain technology for the global development of NFT digital content and sell NFT content related to SEGA’s classic IP.

• In February 2022, SEGA announced a partnership with well-known game company Bandai Namco to launch the “Oasys” game-specific blockchain project. The project uses its proprietary “Oasys architecture,” which combines first- and second-layer technologies, is compatible with EVM (Ethereum Virtual Machine), supports multi-chains, and uses Proof of Stake (PoS) consensus mechanism.

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• In April 2022, SEGA revealed that its “SuperGame” plan will use NFTs.

• In September 2022, SEGA authorized its “Three Kingdoms” game to the cryptocurrency game start-up double jump.tokyo to launch a corresponding Web3 card game.

However, SEGA’s latest decision to distance itself from Web3 and NFTs also reflects the changing trend of the gaming industry. As Shuji Utsumi said, blockchain games at this stage are often boring and lack fun, creating concerns among many players and industry observers about the game experience under the background of Web3 and NFTs. But the question is, is SEGA really giving up this big cake of blockchain games? The answer may surprise you.

The chain game market is still a coveted “big cake.”

In fact, in the current downturn of the cryptocurrency market, the performance of the blockchain game vertical is still impressive, and data does not lie- 

In the second quarter of 2023, the number of daily active independent wallets (dUAW) interacting with on-chain Dapps increased by 7.97% compared to the first quarter, of which game Dapps continue to occupy the dominant position, with a market share of 37%, far exceeding DeFi, NFT and other vertical markets such as social. In the past three quarters, the daily active independent wallet quantity ratio index of blockchain games has always maintained a leading position, such as 51% in the third quarter of 2022, 42% in the fourth quarter of 2022, and 44% in the first quarter of 2023.

It is not an exaggeration to say that the blockchain game market is still a coveted “big cake”. The counter-cyclical growth of the blockchain game market has also been interpreted by the industry as an encouraging sign of market recovery. Although regulatory turmoil is widespread, this field is still booming, and the continuously growing market participation reflects this.

Fake exit? True admission!

If you really think Sega is going to “exit” the chain game? Then it’s too small and too small.

Just two days after Sega announced its so-called “exit” from the blockchain game market, they suddenly gave the encryption community a surprise-by signing a memorandum of cooperation with Line Next, they plan to introduce their own games into Line Next’s blockchain game platform Game Dosi through IP licensing. In fact, Line Next, the company, has a lot of weight. They are an affiliate of the Korean instant messaging application giant LINE (it is said that Tencent is one of LINE’s important shareholders), mainly developing NFT-based game systems. Under the new agreement, Line Next will obtain Sega’s game IP and Web3 game development license, and will also support the NFT production, digital payment, and marketing activities of related games on Game Dosi.

Obviously, Sega’s move has already shown that they have not completely abandoned the Web3 chain game strategy, but have changed to a “admission” method, turning to cooperation with third parties to maximize the value of their IP, while maintaining the integrity of valuable franchise and prioritizing the importance of gaming experience.

Shuji Utsumi, after signing a memorandum of understanding for cooperation with Line Next, also “changed his tune” and said:

For most people in the traditional gaming industry, the huge potential advocated by blockchain advocates sounds a bit extreme, but this is the pain that the first crab eater needs to go through. We should never underestimate blockchain technology.

According to the latest information disclosed by VentureBeat, Sega stated that it will continue to invest in this field.

Summary

At present, traditional game giants have not given up on investment in blockchain game infrastructure construction. For example, Ubisoft is the first major gaming company in the world to involve NFTs. Japanese gaming giant Bandai Namco dreams of starting development of Gundam Metaverse. Korea’s largest mobile game company Netmarble announced a dual-track strategy last January to compete for blockchain games, and also issued its own cryptocurrency for in-game transactions. Square Enix, the developer of Final Fantasy, has also frequently increased its investment in blockchain games, and even identified blockchain games as the company’s new investment area in its mid-term business strategy.

Of course, there are still many limitations to the development of the blockchain gaming market. For example, players have a strong purpose-playing games to make money. As long as they can make money, the game can be played, and nothing else matters. However, for a high-quality game, the experience is definitely the most important, followed by considering the economic model embedded in it.

The good news is that more and more gaming giants are beginning to pay attention to these issues and inject new blood into the blockchain gaming market. Undoubtedly, no one wants to give up this “big cake.”

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