Sega Corp. has recently made headlines with its decision to withdraw from the Web3 and blockchain gaming market. The famous Japanese game studio, known for its iconic franchises and contributions to the video game industry, announced this strategic shift. Co-Chief Operating Officer, Shuji Uchisimi, expressed his discontent with the lack of excitement in existing Web3 games, which prompted Sega’s decision to stay away from blockchain gaming ventures involving its popular franchises.
The main drivers behind Sega’s withdrawal from the Web3 space are the continued weakness of the cryptocurrency market and limited interest in blockchain games. In an interview with Bloomberg, Utsumi emphasized the importance of protecting the value and integrity of Sega’s content by retaining its main game franchises within the company. Sega intends to avoid potential risks and loss of value that could come from third-party blockchain projects.
To reflect this shift in strategy, Sega will temporarily halt the development of its own blockchain games. This move is noteworthy as Sega was previously recognized as one of the leading advocates of blockchain-based games incorporating Play-to-Earn (P2E) mechanics. Additionally, popular characters from franchises like Romance of the Three Kingdoms and Virtua Fighter will no longer be used to create non-fungible tokens (NFTs) for third-party blockchain game projects.
The declining interest in Web3 and blockchain games is a broader trend within the cryptocurrency market. While companies like Axie Infinity experienced significant growth in 2021, the industry as a whole faced a decline, with several high-profile projects collapsing in 2022. Sega’s decision reflects the waning enthusiasm among gamers for integrating blockchain technology into their gaming experiences.
This shift in sentiment is fueled by the perception that Web3 and blockchain technology are primarily seen as economic opportunities for publishers, rather than enhancements to gameplay. Ubisoft Entertainment, another notable game developer, took a cautious approach to NFT games last year, citing the need for further exploration and research in the market. However, some game studios, such as Square Enix, continue to embrace the Web3 market, as demonstrated by their involvement in NFT games and the popular Final Fantasy series.
Sega’s withdrawal from the Web3 and blockchain gaming market marks a significant change in its stance. As the company aims to preserve the value of its franchises and cater to gamers’ interests, it will explore different directions for future growth in the video game industry.