If non-fungible tokens (NFTs) become more than a crypto-powered way to buy, sell and display images of Bored Apes and CryptoKitties, entertainment companies will have to use them as more than a digital version of marketing accessories in the vein of Darth Vader or Luke Skywalker action figures that was pioneered by George Lucas in 1977’s Star Wars.
They will have to become part of it, Deloitte said earlier this year in a report looking at five trends that could drive growth in the media and entertainment industry. That’s not to say that NFTs’ ability to provide scarcity and engagement as collectibles won’t be part of the mix.
But unique digital assets can “lead to more digital product innovation [and] greater empowerment for their creators,” Deloitte said in its Media and entertainment industry outlook for 2022.
One company trying to do this with NFT is Fox Entertainment, which is spending up to $100 million of the billions it saves by not building a streaming service to create a “competitive advantage in building a business on the blockchain,” CEO Charlie Collier said Variety this week. “This will pay dividends long into the future.”
Another is Animoca Brands, whose roots are in blockchain and NFT gaming. An early investor in CryptoKitties, the hit 2017 cat breeding game that first brought NFT to the public’s attention as cute kittens sold for as much as $100,000, Animoica has since expanded significantly.
It is now the largest investor blockchain projects in Asia, Bloomberg he said, pointing to more than 340 of them in gaming, finance and social media. It also includes Axie Infinity, a play-to-earn crypto game that blockchain supporters are calling the future of gaming. It is also by far the most successful NFT project of any kind, with 2.1 million traders having bought, sold and resold Smooth Love Potion NFTs which are the key to the game 17 million times, according to DappRadar.
They spent 4.2 billion dollars on it. And while opponents of the play-to-win concept, who call it “pay-to-win,” have made much of its drop in daily users — 250,000 compared to 2 million at the height of the crypto boom late last year. ” there are several other factors at work. Notably, the crash of the current crypto winter has dampened potential earnings, and one of the biggest crypto hacks ever — the $625 million Ronin Network attack in March — targeted a cross-payment bridge used by its clients.
Fox’s Blockchain Creative Labs is led by Scott Greenberg, who also runs the studio behind the hit animated series “Bob’s Burgers.”
Greenberg’s first big NFT test, Variety said, is “Krapopolis,” an animated show set in ancient Greece. A “dip” of 10,420 “Krap Chicken” NFTs came out earlier this month, but the focus is not on profiting from that sale, he said. It will come with a range of privileges and extras, ranging from NFT-protected screens and join and greets to voting on things like the episode’s ending song and even an animated extra.
Slated to launch next year on Fox, “Krapopolis” is “a batting practice,” Greenberg told Variety.
“Building a fully realized world and cast of characters on the blockchain has never been done before,” he said. “And in terms of the fan experience, it’s going to come alive in a way that no other show has.”
In the long term, Collier said he sees Blockchain Creative Labs’ business as a bridge to Web3, a still-theoretical future version of the web that they believe will be built on blockchain and freed from the control of big tech.
With NFTs capable of doing things like holding videos and generating royalties for creators on every resale, Collier likened it to the anti-Napster that allows content owners to monetize every transaction.
“We’re reinventing home video,” he said.
Animoica Brands CEO Yat Siu said much the same thing about Web3 to Bloomberg, calling it a way to give people ownership of their virtual assets and break the “digital dictatorship” of big tech.
Still, while Animoica has had some big hits—it also has a stake in two other top-selling NFT collectible lines, Bored Ape Yacht Club and CryptoPunks, and is turning the former into a video game—it still has a lot to prove.
Whatever the cause, Axie Infinity’s best days may be behind it, and until now no one else has been able to make another big play-to-earn game, let alone a AAA-level hit. There’s a lot of opposition to the concept among die-hard gamers, who are a necessary component of the hit gaming ecosystem, and it runs into trouble with another high-profile game.
It’s a three-year-old racing game, F1 Delta Time, where players spent hundreds of dollars on NFT cars only to have them rendered useless and worthless when Formula 1 didn’t renew their license.
But his long-term goal, Siu told Bloomberg, is to build an organization where sellers and buyers — game makers and players — get ahead.
“As an organization, we believe in the capitalist incentive,” he told Bloomberg. “It’s not that everything has to be equal in its distribution, but that whatever you end up doing has to have a net benefit for everyone else in your community.”
Which is a goal that NFT-based gaming has yet to prove it can meet.
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