If nonfungible tokens (NFTs) are to become something more than a crypto-powered way to buy, sell and display pictures of Bored Apes and CryptoKitties, entertainment companies are going to have to use them as something more than a digital version of marketing extras in the vein of a Darth Vader or Luke Skywalker action figures George Lucas pioneered with 1977’s “Star Wars.”
They’ll have to become a part of it, Deloitte said earlier this year in a report looking at five trends that can drive growth in the media and entertainment industries. That’s not to say that the ability of NFTs to provide scarcity and engagement as collectables won’t be part of the mix.
But the unique digital assets can “lead to more digital product innovation [and] greater empowerment for their creators” Deloitte said in its 2022 Media & Entertainment Industry Outlook.
One companies trying to do that with NFTs is Fox Entertainment, which is spending up to $100 million of the billions of dollars it is saving by not building a streaming service to create “a competitive advantage in building a business on the blockchain,” CEO Charlie Collier told 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 NFTs to the attention of the general public as the cute kittens sold for up to $100,000, Animoca has expanded substantially since then.
It is now the largest investor blockchain projects in Asia, Bloomberg said, pointing to more than 340 of them across gaming, finance and social media. These also include Axie Infinity, a “play-to-earn” crypto game that blockchain supporters have called the future of gaming. It is also far and away the most successful NFT project of any kind, with 2.1 million traders having bought, sold and resold the Smooth Love Potion NFTs that are a key to gameplay 17 million times, according to DappRadar.
They spent $4.2 billion doing that. And while much has been made of its crashing daily user numbers — 250,000 compared to 2 million at the height of the crypto boom late last year — by opponents of the play-to-earn concept, who call it “pay-to-win,” there are a couple of other factors at work. Notably that the crash of the current crypto winter cut into the potential earnings, and that one of the largest-ever crypto hacks — the $625 million Ronin Network attack in March — targeted a cross-chain payments bridge used by its customers.
See more: In $625M Hack, a Bigger Crypto Security Problem Is on Display
Getting Creative
Fox’s Blockchain Creative Labs is run 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 “drop” of 10,420 “Krap Chicken” NFTs went out earlier this month, but the focus isn’t making money from those sales, he said. They’ll come with a range of privileges and extras, ranging form NFT-gated screens and cast meet-and-greet to votes on things like an episode’s closing credit song and even an animated extra role.
Set to launch next year on Fox, “Krapopolis” is “batting practice” Greenberg told Variety.
“Building a fully realized world and a cast of zany characters on the blockchain has never been done before,” he said. “And in terms of fan experience, it will come to life in a way no other show has.”
Longer term, Collier said he sees the Blockchain Creative Labs business as a bridge to Web3, a still-theoretical future version of the web believers say will be built on blockchain and free from the control of big tech.
With NFTs able to do things like hold video and generate royalties for creators on each resale, Collier likened it to an anti-Napster allowing content owners to monetize every transaction.
“We’re reinventing home video,” he said.
Community Spirit
Animoca Brands’ CEO Yat Siu said much the same thing about Web3 to Bloomberg, calling it a way to give people ownership of their virtual property and break big tech’s “digital dictatorship.”
Still while Animoca has had some big hits — it also has a piece of two other top-selling NFT collectable lines, Bored Ape Yacht Club and CryptoPunks, and it’s turning the former into a video game — it still has a fair bit to prove.
Whatever the cause, Axie Infinity’s best days may be behind it, and so far no one else been able to create another big play-to-earn game, to say nothing of a AAA-level hit. There is a lot of opposition to the concept among hard-core gamers, who are a necessary component of a hit gaming ecosystem, and it’s run into trouble with another high-profile game.
It’s three-year-old racing game, F1 Delta Time, saw players spend hundreds of dollars on NFT cars only to see them rendered useless and worthless when Formula One didn’t renew its license.
But his long-term goal, Siu told Bloomberg, is to build an organization in which bother the sellers and buyers — the game makers and players — can come out ahead.
“As an organization, we do believe in the capitalist incentive,” he told Bloomberg. “It’s not that everything must be equal in its distribution, but rather, whatever you end up making still has to broadly have a net benefit to everyone else in your community.”
Which is a goal that NFT-based play-to-earn gaming hasn’t yet proved it can fulfill.
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