In the wake of substantial turbulence in the cryptocurrency market and subsequent destabilization of numerous global firms, Japanese video game giant SEGA has curtailed its former enthusiasm for blockchain gaming. S
huji Utsumi, SEGA’s co-chief operating officer, recently revealed to Bloomberg the company’s decision to halt all in-house development projects employing blockchain technology.
Utsumi candidly expressed his sentiments, noting that play-to-earn games, a notable category within blockchain gaming, lack the entertainment value that he believes is crucial for the industry.
He questioned the technology’s validity, asking, “What’s the point if games are no fun?” His comments highlight a significant shift in SEGA’s previously fervent support for blockchain-based gaming, once championed by its executives as ‘the future of gaming.’
SEGA’s Prudent Approach Towards Blockchain Technology
While SEGA has notably stepped back from its in-house blockchain projects, it has not completely turned its back on the technology.
The multinational firm plans to collaborate with third-party companies to craft Non-Fungible Tokens (NFTs) for well-known franchises such as Three Kingdoms and Virtua Fighter. In a move demonstrating prudence, SEGA has deliberately refrained from incorporating its biggest franchises, like Sonic the Hedgehog and Yakuza, into its blockchain initiatives, intending to protect the brand value these franchises hold.
SEGA’s decision showcases its cautious, yet open-minded approach to blockchain gaming. As Utsumi puts it, SEGA is keen on “looking into whether this technology is really going to take off in this industry after all.”
Implications for the iGaming Industry
SEGA’s shift in blockchain gaming strategy presents several potential implications for the broader iGaming industry:
- Balancing Innovation and Quality: SEGA’s criticism of play-to-earn games underscores the importance of ensuring game quality while incorporating new technologies. It’s a reminder for the industry to strike a balance between innovation and maintaining the entertainment value that gamers seek.
- Safeguarding Brand Reputation: By keeping its largest franchises away from blockchain projects, SEGA underlines the need to protect brand reputation in the face of new and potentially risky technologies. Some iGaming companies may take a note from this cautious approach and cut back on their future NFT gambling projects, or web3 initiatives – like crypto lotteries and games.
- Continued Evaluation of Blockchain: Despite stepping back from blockchain, SEGA’s intention to continue monitoring the technology’s progress indicates the industry’s overall continued interest in blockchain. It suggests that while some firms may be wary, blockchain gaming is far from being dismissed outright.