Many traditional gaming giants are entering the blockchain game market. Will NFT games迎来质变时刻?

Author: Richard Lee, Chain Catcher

The blockchain gaming sector has recently experienced its first wave of "crashes," and at the same time, the "blockchain game iteration theory" has become a consensus within the industry.

As early as May, the data analysis platform Nansen released a research report that categorized the development of NFT games into four stages: pure NFTs, NFT + Play to Earn, NFT + Play to Earn + better game quality, and AAA-level NFT + Play to Earn products.

Similarly, the venture capital firm IOSG Ventures believes that the P2E model is inherently unsustainable, and the future economic model of blockchain games will transition from purely relying on Ponzi mechanisms to attracting "gamblers" through gambling mechanisms, as well as attracting players through game mechanics. The blockchain gaming industry will undergo a cleansing, and the market will belong to high-quality game products.

From November to December, traditional gaming giants like Zynga and Ubisoft announced their entry into the NFT gaming market, bringing positive signals to the blockchain gaming market. Are AAA game companies delving deeper, indicating a qualitative change in blockchain games?

Source: Nansen

The depletion of "cultivation" and flow in P2E brings new development theories for blockchain games

IOSG's Alex analyzed that the reason traditional games prohibit player-to-player trading is precisely because the shortcut of "buying" from other players disrupts the "cultivation" process that players should experience when starting from scratch, as well as the flow experience accumulated from it. Additionally, Alex pointed out that P2E is somewhat incompatible with game quality, as P2E can undermine the marginal utility of gameplay, meaning even highly playable, high-quality NFT games may accelerate their failure due to this.

Thus, he believes that numerical cultivation experience games may not be sustainable, while PVP (player versus player) and esports-type games that rely on player skills are more suitable for integrating into the on-chain economic ecosystem.

Judging the development trend of blockchain games by game type applies to all participants, including AAA companies. However, whether this initial judgment is true remains to be verified.

What role will AAA companies play in the wave of decentralized production?

Alex is not optimistic about the role of traditional game manufacturers (or "Web 2.0 native game teams") in the innovation of blockchain games.

He pointed out that the decentralized production relationship is the real innovation brought by blockchain games, and the creator economy stimulated by this is more sustainable, thus squeezing market share. Traditional gaming giants may find it difficult to truly understand and influence this "evolution."

Nevertheless, the effective realization of decentralized creation is not an easy task, and the advantages of AAA game manufacturers should not be underestimated.

To what extent can the power of game production be decentralized? A "technical" employee from a top three gaming company in China, Gao Rui, once told Chain Catcher that he insists that the core gameplay and data flow of games should be entirely controlled by professionals, while non-critical resources such as personalized skins can be opened up for more people to co-create.

The crypto field has already begun practical attempts at decentralized creation. Chain Catcher reported in early October that NFT projects Loot and the Rarity community are conducting decentralized creation through two completely different organizational methods, but progress has been slow. As of now, both projects have yet to launch market-competitive game products.

Decentralized collaboration and production is a challenge no less than decentralized governance. Before this, AAA game manufacturers that accumulate talent and resources may still be quite competitive "project parties" in the blockchain gaming market for a long time.

Here are some well-known game manufacturers that recently announced their entry into NFT gaming:

1. Ubisoft: Hesitant for a long time

As early as September 2018, Ubisoft emerged as a founding member of the Blockchain Game Alliance (BGA), showing its interest in blockchain games. According to Decrypt, Ubisoft's Strategic Innovation Lab is specifically responsible for researching cutting-edge technologies, including augmented reality, machine learning, and blockchain.

This lab has initiated startup funding programs for several years, including teams like NonFungible.

In February 2019, Ubisoft conducted its first internal test of a blockchain game inspired by MineCraft called HashCraft, but this project was only an experimental product and was not publicly released.

Screenshot of HashCraft, source: Decrypt

Subsequently, Ubisoft announced in November 2019 and April 2021 that it would serve as a node operator for two blockchain networks, Ultra (a game distribution platform based on EOS) and Tezos. In March 2021, Ubisoft collaborated with the Ethereum fantasy football game Sorare to launch a free version of the crypto game One Shot League. In October of this year, it appeared as the second investor in the latest round of financing for blockchain game producer and publisher Animoca Brands, as listed in the investor list.

Up to this point, Ubisoft's attempts in the blockchain gaming field can be described as "cautious." Until the 8th of this month, Ubisoft North America announced the launch of its first in-game NFT "Digits" on Tezos. The corresponding NFT trading platform "Ubisoft Quartz" was first launched in the PC version of the tactical shooter game Tom Clancy's Ghost Recon Breakpoint and was only open to "active players."

This marks a significant step for Ubisoft after a long period of observation. However, whether Ubisoft will continue its exploration remains to be seen.

The North American official of Ubisoft received over 16,000 votes after releasing the Ubisoft Quartz trailer on YouTube, with 96% clicking "dislike." Currently, the account has taken down the video. Additionally, Ubisoft has repeatedly stated that environmental issues related to blockchain energy consumption and pressure from investors will affect its decisions and progress.

2. Zynga: First-mover advantage in mobile

Zynga is a major American mobile gaming giant, founded in 2007 and listed on NASDAQ. Its most famous game is FarmVille, released on Facebook, which reportedly reached 10 million daily active users within six weeks.

In November of this year, Zynga announced the hiring of former Sega general manager Matt Wolf as vice president of its blockchain gaming department. This department's work includes two parts: integrating NFT and blockchain technology into Zynga's existing game products and IP products, and developing native NFT games.

Compared to most current PC-based blockchain game projects, Zynga's mobile development direction aligns more closely with the consumption and leisure habits of the mainstream audience. Its rich development experience may give it a first-mover advantage in the mobile blockchain gaming field.

"There is a lot of capital and talent entering this field," Zynga CEO Frank Gibeau told Techcrunch, believing that blockchain will become a part of the long-term structure of gaming.
Frank Gibeau stated that the blockchain gaming department is establishing an experimental project to determine the best way forward and to study how NFTs can enhance user engagement and retention.

Frank Gibeau said, "We plan to move at Zynga's pace," so relevant products may be released in the coming months.

LinkedIn profiles show that Matt Wolf has worked at AAA gaming giants EA and Sega, and later served as the founder and CEO of the emerging market agency D20, as well as the vice president of entertainment and venture capital at Coca-Cola.

3. Niantic: Cooperative exploration

In the summer of 2016, a game called Pokemon Go won countless downloads worldwide. In November 2021, the company behind it began to explore blockchain gaming.

On November 24, the crypto debit card company Fold announced a collaboration with the Pokemon Go development team and AR company Niantic to create an augmented reality game called "Fold AR."

The Fold AR game is a play-to-earn game modeled after Pokemon Go, themed around cryptocurrency, simulating the "mining" behavior of Bitcoin. The main task in the game is to exchange "catching cute monsters" for finding binary code cubes and clicking on them like mining until prizes are displayed. Every ten minutes, a new block appears somewhere around the player, reflecting the real Bitcoin mining speed. Rewards will be distributed in Satoshis (the smallest unit of Bitcoin).

Niantic was spun off from Google's parent company Alphabet in 2015. Last month, Niantic announced that it had received $300 million in funding from hedge fund Coatue at a valuation of $9 billion.

Niantic is undoubtedly a pioneer in the AR (augmented reality) gaming field, and if it can launch more blockchain game products in the future, it will bring blockchain games closer to the vision of the "metaverse."

Conclusion

In addition to the three giants mentioned above, other leading game companies like EA and Epic Games have also expressed interest in NFTs and blockchain games. Perhaps we can expect more similar news in the future.

However, the reputation of traditional gaming giants can also be easily exploited, becoming a promotional tool for niche blockchain game projects, thereby misleading the audience.

As previously reported by the media, Japanese gaming giant and Contra developer Konami launched a decentralized platform "Haglien" based on BSC. However, according to Chain Catcher's verification, this platform and its first game Mad Musk were not launched by Konami. According to a press release, the production team of "Haglien" is a service provider that developed products for Konami, rather than Konami itself.

Overall, the blockchain gaming track is likely to undergo a new round of reshuffling. Under the impact of mainstream gaming companies and the market itself, most current blockchain games may be eliminated by the market, potentially leading to a moment of qualitative change in the industry.