Sega Finally Says What We’re All Thinking About Blockchain Games

In order to survive, let alone thrive, in the video game industry, you have to pursue the next big thing. This tactic doesn’t always work (just look at the Kinect and Virtual Boy), but it has resulted in more than a few successes. For some reason, many game companies seemed to think that controversial blockchain concepts were going to be the future of gaming. Thankfully, Sega has finally realized that isn’t the case.

Yesterday, Sega’s co-Chief Operating Officer Shuji Utsumi told Bloomberg News that his company is abandoning most of its crypto-related plans. That means no third-party blockchain projects and no in-house blockchain games. All potential crypto and NFT products have been put on (hopefully) permanent ice.

What’s even more interesting than Sega’s recent decision to abandon the blockchain are their reasons for making that decision. As Utsumi told Bloomberg, “The action in play-to-earn games is boring. What’s the point if games are no fun?” Given what we’ve seen of play-to-earn titles so far, it’s hard to argue against Utsumi’s pleasantly blunt statement.

However, according to Bloomberg, Sega isn’t fully committing to a blockchain ban just yet. Utsumi wants to keep prime Sega properties such as Sonic the Hedgehog and Yakuza as far away from blockchains as possible to “avoid devaluing its content.” However, relatively less popular IPs like Three Kingdoms and Virtua Fighter are still fair game for third-party NFT creators. Moreover, Utsumi was “non-committal” regarding Web 3.0’s place in its upcoming “‘super game’ initiative,” which will consist of multiplayer titles that will likely start releasing in 2026. Still, baby steps.

Utsumi’s declaration probably came as a sigh of relief to fans who remember the day Sega announced it would start selling NFTs and explore other blockchain concepts. Those plans drew the ire of many gamers, as even though NFTs saw explosive growth in 2020 and early 2021, plenty of people saw the writing on the wall and predicted the blockchain bubble would burst. One year later, they were largely proven right.

However, not only did companies such as Sega seemingly stick to their non-fungible tactics, but others joined in. Companies such as Square Enix, Ubisoft, and Bandai Namco expressed serious interest in NFTs and other blockchain tech even as the market crumbled around them. But since then, many of these publishers have abandoned, or seriously altered, their original plans. Ubisoft has seemingly stepped back from its original blockchain plans, and Square Enix went so far as to replace their CEO who wanted to focus on NFT games. Sega is just the latest company to pull a blockchain 180°.

Of course, many gamers have long disliked NFT and blockchain-centric products on principle. Along with concerns that the energy required to generate these digital tokens allegedly sped up climate change, the incentive to even care about such things in the first place has long been called into question. Why spend hundreds, if not thousands, of dollars on a digital receipt for a picture of randomized assets and textures when you can spend a fraction of that money on…well, games, hardware, Warhammer/Warhammer 40K miniatures, accessories, or pretty much any similar product? As Utsumi also noted, most of the games that incorporate blockchain technology are not only not fun to play but are inherently exploitative.

For instance, earlier this year, the Bored Ape Yacht Club (arguably the most infamous NFT collection out there) released its first NFT game, Dookey Dash. For the most part, the game was just a basic endless runner that required you to swim through sewers and collect points. Whoever got the all-time high score got the grand prize of an interdimensional key…that was stuck in a monkey’s butt. That wasn’t even the worst part, though. People could only play the game if they owned a “sewer pass,” which they could only receive if they had Bored Ape or Mutant Ape NFT. Plus, certain NFTs that were more valuable than others granted higher tiers of “sewer passes,” which provided bonuses that made accruing points even easier. In other words, Dookey Dash barely fulfilled the requirements of a video game and yet still managed to be a pay-to-win game.

If that’s not enough red flags for you, you should also know that the game was only available for three weeks and that nobody even knew what the monkey butt key would unlock. Outlets such as Ars Technica calculated that, shortly after the game’s announcement, Bored and Mutant Ape NFT prices skyrocketed, which seemed to be the only point of the endeavor.

Indeed, it seems that companies are finally realizing the one thing that might actually kill this whole initiative: NFTs are just not fiscally viable. Sure, they can sell for a ton of money, but such circumstances are the exception rather than the rule. More often than not, NFTs decrease in value over increasingly shorter periods of time. In fact, according to CoinDesk, Bored and Mutant Apes have been on a downward spiral for over a year. As that outlet notes, singer Justin Bieber spent $1.3 million on a prized NFT in 2022. As of a few days ago, it was valued at $58,000. The figures are incredible, but the story is common.

And that’s to say nothing of the scams. For instance Last year, Seth Green was the victim of a phishing scam. The perpetrator made off with some of his Bored Ape NFTs, which forced him to halt development on a new show. Why? because one of the binary baboons he “purchased” was going to star as a bartender. Even when you take NFTs out of the equation, cryptocurrency and other blockchain tech have proven to be unreliable at best and disastrous at worst. In 2021, hackers stole over $6oo million worth of crypto. In 2014, the Tokyo-based Bitcoin exchange Mt. Grox filed for bankruptcy. That’s to say nothing of the banks and similar financial institutions that have recently failed due in part to their crypto investments.

While most people reading this article are probably elated to hear that Sega won’t be returning to the blockchain anytime soon (if ever), we really must wonder why the company even floated the idea in the first place. All the signs of a collapse were there, and the entire blockchain concept has yet to produce anything worthwhile in terms of game design. Now that it seems the money just isn’t there anymore, we can only hope more companies will continue to distance themselves even further from this seemingly doomed concept.