Sega Announces Collaboration with Line Corporation for NFT Game

Sega, a prominent Japanese gaming company, has announced a collaboration with Line Corporation, a popular mobile messaging app, to develop a new game incorporating blockchain technology. This announcement comes as a surprise, considering Sega's Chief Operating Officer (COO) recently expressed doubts about the potential of blockchain in gaming, referring to games developed for the technology as "boring."

The collaboration, unveiled on Monday, will involve Sega working with Line Next, Line Corporation's division dedicated to blockchain game development and support. The game will utilize Line Next's Game Dosi platform, which integrates non-fungible tokens (NFTs) across all titles. Although the specific Sega intellectual property (IP) to be used was not disclosed, the press release mentioned that the game would involve NFT production, digital payments, and marketing activities.

Ironically, this announcement comes less than a week after Sega's COO, Shunji Utsumi, informed Bloomberg News that the company had reconsidered its plans to incorporate NFTs into future games, including popular franchises like Sonic The Hedgehog and Yakuza. Utsumi stated that Sega was evaluating whether blockchain technology would truly flourish in the gaming industry.

The decision to drop blockchain support for "super games," a series of major online multiplayer titles that will play a crucial role in Sega's future business strategy, marks a significant departure from the company's stance just a few years ago. In 2021, Sega, along with other major game publishers like Ubisoft, Square Enix, and Bandai Namco, had expressed their intentions to embrace NFTs and develop games with blockchain in mind.

However, since then, the practical applications of blockchain in gaming have faced criticism due to high-profile failures. Blockchain games that were once popular, such as Cryptoland and Axie Infinity, have struggled to deliver on their promise of rewarding players monetarily and maintaining player engagement. One of the primary challenges faced by blockchain games is justifying the integration of blockchain technology into gameplay, which has been cited as a key reason for Sega's change of direction.

Sega's decision to shift away from blockchain is part of a growing trend among major publishers. Ubisoft recently downscaled its blockchain plans following the failure of its NFT platform, Ubisoft Quartz. However, not all industry players are abandoning the initial excitement surrounding blockchain in gaming. Square Enix has reaffirmed its commitment to incorporating blockchain technology in future titles, and Bandai Namco remains dedicated to utilizing blockchain in its games.

While the majority of the industry has lost interest in using blockchain technology in game development, some are exploring alternative applications. For instance, Robot Cache, an online game storefront, utilizes blockchain to enable players to sell their digital games. The platform recently emerged from beta testing, signaling its readiness for a wider audience.

Sega's collaboration with Line Corporation for an NFT game demonstrates a shift in the company's approach to blockchain technology. Despite expressing doubts about blockchain's potential, Sega is now embracing it through this collaboration. The industry as a whole has seen a decline in interest in blockchain gaming, with notable failures casting doubt on the technology's value in enhancing gameplay. However, some publishers, such as Square Enix, remain committed to exploring the potential of blockchain, while others seek alternative applications beyond traditional game development.