Sega tiptoes away from Blockchain, says it is good for nothing

Sega, one of the biggest advocates for the integration of blockchain into gaming, has announced its withdrawal from the space as the crypto winter persists. Sega’s co-COO Shuji Utsumi has said the Japanese gaming giant is yet to discover what blockchain is good for and is deliberating not making it part of a flagship “supergame” slated for release in 2026.

The company behind Sonic The Hedgehog and Yakuza will withhold its biggest franchise from third-party blockchain gaming projects to avoid devaluing its content, co-Chief Operating Officer Shuji Utsunmi told Bloomberg at a gaming conference. This means, for all intents and purposes, the company will stop developing blockchain games.

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Last year, Sega announced its collaboration with Japanese blockchain company, Double Jump Tokyo to develop a new game centered on the Sangokushi Taisen series. The new game, which was supposed to be Sega’s first attempt at blockchain gaming, was to be developed by Double Jump Tokyo, with Sega lending the use of the Sangokushi Taisen IP.

Though at the time, it was hazy how blockchain would be completely explored to develop the game. In an interview last year, Sega producer Masayoshi Kikuchi expressed his conviction that NFTs will be a part of the gaming landscape in the future.

Why is Sega pulling out?

Since the announcement of the collaboration last year, the blockchain space has been the subject of several criticisms and meltdowns. At the tail end of 2022, there was the FTX debacle, which drove many crypto startups into debt. Unable to stay afloat, many went into extinction.

In the early part of 2023, the market tried to recuperate, but the introduction of chatbots diverted the attention of the audience, as many chose to hop on the promising and exciting prospect of Artificial Intelligence. The space is struggling to reclaim its previous momentum, but it has been a back-and-forth spell.

Also, Sega’s announcement of its collaboration with Double Jump Tokyo last year was met with a lot of criticism. Its close rival, Konami had also announced during that same time that it would auction NFTs of Castlevania on the OpenSea NFT marketplace in celebration of the game’s 35th anniversary. Both companies were condemned.

One Twitter user tweeted, “No, I don’t like this. I’m not a fan of NFTs, even if they are Castlevania!” Many others on the social media platform have chosen more brutal words to condemn the announcement.

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Gamers have heavily criticized the adoption of blockchain and NFT technology by game developers like Sega as a strategic gimmick conceived primarily for profit maximization or cash grabs. Could the culmination of all these be the reason why Sega is pulling out of developing a blockchain game? Though Utsumi notes that the reason Sega is withdrawing its interest in blockchain is because, “The action in play-to-earn games is boring. What’s the point if games are no fun?”

While speaking to Bloomberg at a games conference, Utsumi clarified that Sega is not “denying the potential” of blockchain, but he added that:

“We are trying to figure out what is the best way to entertain the audience. [We are] evaluating, searching, learning.”

For the traditional gamers, this will hit the core of their being as good news and, importantly, a good win for them considering their protest against a full transition to P2E games. On the flipside, it will be interesting to see what this decision might cost Sega as the tides rise. As an evolving space with so many developments set to take place, the blockchain industry is capable of hurting its doubters and rewarding its devotees.