Attack or wait and see? How traditional large game publishers view blockchain games

Author: DevinBecker; Compiler: Yvonne, MarsBit

Web3 game development has continued to cool off over the past six months, but one area worth looking into is the stance of AAA game publishers, who are bullish on the technology by the end of 2021. When Axie Infinity detonated blockchain games (especially the play-to-earn mode in the game), most large publishers took a wait-and-see attitude. When the market starts to pull back in early 2022, most companies stop doing any new development in the space, leaving it mostly to smaller, more focused developers.

Now that some time has passed, most AAA publishers seem to have switched gears. However, some are still firmly pushing forward. These pioneering publishers are determined to solve the problem, and we anticipate that, while obstacles remain, they may have enough momentum to push others cautiously into the space over the next few years. While the continued momentum has largely come from the East, a large Western publisher is also continuing to invest.

Ubisoft is still teetering on the edge

Ubisoft has always actively embraced new technologies and platforms. For example, its foray into cloud gaming, contributing to the short-lived Stadia platform; its subscription service Ubisoft+, which also supports Stadia and Luna; its forays into virtual reality gaming with games like "Star Trek Bridge Crew" and "Werewolves Within"; "Starlink" conducts an experimental toy interactive game. However, none of these ventures have drawn the ire of players like Ubisoft's interest in blockchain gaming. The company has shown interest in blockchain technology since 2018, when it helped form the Blockchain Gaming Alliance.

Initially, Ubisoft explored blockchain technology through its "Strategic Innovation Lab." The lab developed Hashcraft, a Minecraft-like game based on blockchain technology. As much fun as it was, Hashcraft never got past the prototype stage. Subsequently, the lab released the latest progress: based on interoperability cooperation, it launched a short-lived fantasy sports game "One Shot League", using Sorare's football cards. These moves, however, went largely unnoticed until Ubisoft unveiled its ill-fated Ubisoft Quartz project.

Quartz is Ubisoft's entry into the NFT field, and its product is called "Digits". The company tried to address criticism of the technology by choosing the Tezos blockchain (for alleged environmental reasons), making NFTs only for decoration to allay concerns about pay-to-win, and comparing it to the hit game Ghost Recon. get in touch.

The company's marketing is aimed at collectors and fans who are excited about owning limited-edition, serialized cosmetic items that can be traded outside of the game. At the time, however, public perception of NFTs was mostly negative, related to high prices, Ponzi schemes, and unpopularity with ordinary Ubisoft users. In addition, the latest "Ghost Recon" game "Breakpoint" also faced poor sales and strong opposition from players. This poor timing makes NFT even worse.

After Quartz, Ubisoft's relationship with blockchain games deteriorated. Reports that employees were dissatisfied with the technology's push eventually led to the cancellation of an unnamed web3 game called "Project q," and Ubisoft even publicly stated at one point that it would resume exploration in the blockchain space To "research mode" as a way to get rid of an overly aggressive stance. Despite these setbacks, Ubisoft has invested in several web3 projects, including Cross the Ages, Nine Chronicles, Dogami, Rebel Bots, and Skyweaver.

The company has also launched NFT collaborations with Reddit and The Sandbox using its Rabbids IP. While those projects haven't paid off much, and with some recent cancellations and strategic reassessments, Ubisoft released its own web3 title last month: Champions Tactics: Grimoria Chronicles.

There is not much news about "Champions Tactics", and it is only known that it is an "PvP tactical RPG experimental game on PC". According to the game's website, players "form a team of fabulous champions, engage in exciting tactical battles with other players, and discover the legends of the dark and mysterious world of Grimoria."

The timing of the announcement is no coincidence — it’s part of a Japan- and South Korea-focused Oasys blockchain special during Japan Blockchain Week, with the game scheduled to launch on Oasys. Ubisoft is one of 21 official validators for the Oasys blockchain, joining some of Asia's biggest names including Square Enix, Com 2 us, NEOWIZ, Netmarble, Wemade and NHN Corp. Oasys itself was created by well-known Japanese game developers Bandai Namco, Sega, Thirdverse and Double Jump Tokyo. The event was also used as the launch of a new website designed to showcase all the games it has to offer as well as announcements from multiple publishers.

Sega is still in the "battlefield"

For the development of blockchain games, Sega has been vacillating. In 2022, the company announced a partnership with Double Jump Tokyo to develop a game based on its arcade IP "Sangokushi Taisen" on Oasys. The "Sangokushi Taisen" arcade series may be suitable for the Web3 model due to its unique method of creating and manipulating army units through the use of trading cards in real-time strategy scenarios.

Given the success of card-based strategy games like Clash Royale, the move seems logical. In 2022, Japan also released "Arsenal Base," a successful physical trading card-based Gundam game that plays similarly to "Clash Royale." While the project was originally announced in 2022, Sega took the opportunity of Japan Blockchain Week to make an update. Namely, a teaser video was released, along with more information about the game, which will be a three-minute card-based tournament auto-battle called "Battle of Three Kingdoms," scheduled for release in late 2023.

Web3 Despite Sega's recent release of information and plans for the game, a recent Bloomberg conversation with Sega COO Shuji Utsumi gave the impression that the company is keeping its distance from web3 games. Utsumi has criticized games as boring, saying: "If games are not fun, what's the point?" and expressed doubts about the prospects of blockchain technology in the industry. However, he also emphasized the potential of the field , he said: “What blockchain advocates are saying may sound a little extreme to most people in the game industry, but this is what it is at first. We must not underestimate.” He added that although Sega’s biggest It is cautious about its IP being used by third parties for blockchain games, but it will continue to explore this field with external partners.

Seemingly contradicting those remarks, Sega has teamed up with Line Next to bring one of its "major franchises" to Line Next's blockchain gaming platform, Game Dosi. Line Next is the Korean arm of Line Corporation, the driving force behind the popular instant messaging service of the same name in Japan. Launched in mid-May, Game Dosi released several third-party games and a first-party trading card game called Project GD. Unlike Oasys, Game Dosi uses its own cosmos-based blockchain, Finschia, which is designed for ease of use, with a simple wallet system including social logins like Line and Google.

While Sega didn't reveal the franchise or any details about the game, it's clear that despite some reservations, the company remains interested in the opportunities offered by blockchain technology. One of Sega's successful IPs, "Virtua Fighter," released a limited-edition NFT on Oasys in March this year, further confirming the company's interest.

Square Enix move on

Square Enix is another large publisher with a strong belief in blockchain gaming. In his annual New Year's letters for 2022 and 2023, the company's president, Yosuke Matsuda, emphasized the company's confidence in the technology's potential and its commitment to exploring it. In March, Matsuda was replaced by Kiryu Takashi, whose statement indicated that he was also interested in blockchain technology.

"In a rapidly changing business environment closely related to the entertainment industry, the proposed changes aim to reshape the management team with the goal of adopting evolving technological innovations and maximizing the creativity of the corporate group in order to provide more entertainment services," wrote Takashi Kiryu.

This is not surprising, as Takashi Kiryu previously served as the general manager of Dentsu, a forward-looking research and development group with a keen interest in blockchain technology. The group even released a web3 readiness tool in May. The key question is how cautiously Square Enix will respond to the current bear market environment for blockchain games, especially regarding its flagship IP Final Fantasy. Square Enix has initially explored this space by releasing an NFT of "Final Fantasy VII," which was first mentioned in 2022 and wasn't fully revealed until May of this year.

The company’s most significant “venture” so far has been the release of “Symbiogenesis,” a game that sits somewhere between an NFT art project and a full-fledged game. The project focuses on art and storyline, and the gameplay is similar to that of an object puzzle game. Objects are completely hidden, with only clues to guide the click. Despite the project's unusual approach, it appears to have amassed a loyal following, active daily on its 37,000-member Discord community and posting gameplay episodes on its 42,000-follower Twitter account. and clues.

South Korea is the backbone of Web3 gaming

While Japan’s confidence in blockchain gaming is evident, with even Prime Minister Fumio Kishida promoting NFTs, South Korea has been pioneering and perfecting blockchain gaming for years and has become a mainstay of blockchain gaming in Asia . This development is notable, as blockchain games have been illegal in South Korea since 2019, causing developers to instead create web3 game projects for foreign markets.

Wemade has been at the forefront of this space, incorporating tokens and NFTs into its successful "Mir 4" and "Mir M" series of games on Steam and mobile platforms. The company has built its own blockchain, WeMix. To date, it has hosted 62 competitions of varying quality. That said, Wemade's approach is not without controversy. The discrepancy in the number of tokens in circulation caused its tokens to be delisted from exchanges.

Netmarble is another well-known Korean developer embracing blockchain technology. Its released blockchain games include classic IPs such as "King of Fighters", as well as newer titles such as "A 3: Still Alive", "Golden Bros", "Ni no Kuni: Cross Worlds", "Meta Football ” and “Meta World”. The company also plans to launch other games in the fourth quarter of 2023, including "GrandCross: MetaWorld."

Netmarble has participated in the development of games for large IP holders such as Marvel, and ported CCP games "EVE Online" to mobile platforms. However, it seems unlikely that we will see the company develop blockchain games for large IPs in the near future.

Com 2 uS is continuing to advance its web3 ambitions this year after building and rebranding its own blockchain XPLA (formerly C 2 X). It has released several games on XPLA, such as the flagship game "Summoners War: Chronicles", as well as "Ace Fishing Crew", "Summoners War: Lost Centuria", etc. Com 2 uS also announced at Oasys that it will be bringing Summoners War: Chronicles to the platform. The company even talked about its experience with blockchain gaming at this year's GDC.

Nexon, another large Korean game publisher, shocked everyone by releasing a new web3 game from the Polygon-based "MapleStory" series at GDC. While this is still an experiment for the company, the demo shows how the technology can enhance the main goal of MapleStory and its ecosystem. I recommend checking out Naavik's recent interview with Nexon CEO Owen Mahoney.

Of all the existing IP exploring the potential of blockchain, MapleStory is the most important, with a rich 20-year history. During this time, Nexon has been grappling with a host of secondary market issues and game design challenges that are common to developers new to blockchain. These experiences provide valuable lessons that can help other businesses in the future.

In its presentation, Nexon made a clear awareness of the risks to the brand, reflecting the enthusiasm and apprehension many of these publishers experience when venturing into the financial and social space of Web3 with well-known brands.

If “MapleStory” succeeds on the blockchain, it could be a catalyst for many developers who are on the fence about entering the space. But in reality, it may be a while before the project is released publicly.

Low profile participant

While among the major publishers, the most active supporters of blockchain games have come from Japan and South Korea, several others have chosen to keep a low profile, quietly working on their own projects or watching from the sidelines. Zynga, for example, hinted at its ambitions in this space after it was acquired by Take-Two Interactive. Since then, the company has remained silent, except for the recruitment of senior game designers and lead producers in the blockchain game field. EA has similarly kept its activities under wraps until recently announcing the integration of Nike NFTs into its sports games, which seemed like a cautious first step.

Activision Blizzard doesn't seem interested, but parent company Microsoft has publicly expressed interest in the technical aspects of the space, investing in several projects including blockchain games. It’s worth noting that Microsoft has also been very cautious about integrating blockchain technology into existing assets, as evidenced by Mojang’s ban on NFTs in Minecraft.

future

Like the technological and business developments surrounding the hype cycle, the next big shift for global game developers to blockchain technology will likely only be fueled by a handful of successful titles. **2021 frenzy was fueled by the success of "Axie Infinity," and while that venture ultimately failed, the next game that sparked similar excitement could spark renewed enthusiasm and attract more developers.

Ubisoft, for example, has worked hard to right its mistakes in several areas, including canceling and postponing projects. Most of the technical bets mentioned before didn't work out as expected, making it difficult for Ubisoft to change the game with "Champions Tactics" and win. For a long time, if a blockchain project is difficult to obtain income, it will undoubtedly cause the company to reconsider the feasibility of the project.

Neither Sega nor Square Enix seem willing to take too many risks with the technology, suggesting more traditional publishers have a lower appetite for risk in blockchain games. Sega wisely opted for a game centered around trading cards, as it's a genre that's been able to persist in the space, as we've seen with "Sorare" and "Gods Unchained." On the other hand, Square Enix is leaning towards Symbiogenesis's advantage, although Square's advantage in this area is not directly realized by the blockchain. Square's new president is unlikely to say much about the technology in his 2024 annual letter unless the publisher sees significant progress from its current projects.

Judging from Japan Blockchain Week, despite the bear market, there are still quite a few people in the region who are keen to explore what blockchain can do for games. South Korea has also been persistent in developing games around a technology that isn't even available locally. Both countries have shown some resilience and determination to experiment with Web3 and blockchain gaming technology to see if it has viable commercial potential. However, there are certain considerations in the reality of the market, and problems at the bottom may quickly make nervous company executives take a wait-and-see attitude again.

The most likely outcome is that some of the publishers we've detailed here will turn their attention to other areas without achieving substantial early success. We probably won’t see a blockchain-enabled “Final Fantasy” or “Sonic the Hedgehog” game anytime soon. It's also important to consider that it takes years to develop a AAA game, making high-quality blockchain games more like a side project, as these publishers still need to devote most of their resources to the main project.

Instead, strategies like Sega's relying on third parties or Square Enix to develop smaller, experimental new IPs allow the game to progress without taking risks. We also don't expect to see Western publishers making a big move into blockchain games in the next year or two, unless they find some success.