Sega Still Exploring Web3 Games Despite Withdrawal Reports

Sega Corporation, the game company behind hit products Sonic the Hedgehog, Yakuza and Virtua Fighter, said it plans to release a Web3-based game soon despite news reports and speculation that the company company is withdrawing from the blockchain-based game.

A Bloomberg report on Friday said the company is «pausing plans to develop its own games in that genre at least for now,» citing an interview with the co-CEO. Sega Shuji Utsumi.

However, Utsumi, who has been with the company for nearly 30 years and helped launch the Sega Dreamcast console in the US, said in an email in response to questions that the company’s strategy on blockchain has been misinterpreted.

Utsumi cited the development of a new blockchain-based game between Sega and social media platform Line, announced on July 10, as an example. He wrote in the email that it would be “very strange” to suggest that Sega is retreating from blockchain technologies following the announcement of the Line deal.

Utsumi said the company’s business strategy includes Web3 — a new phase of the internet built on decentralized blockchain, metaverse, and non-fungible tokens (NFT) technologies.

In an interview at the IVS Crypto 2023 conference in the Japanese city of Kyoto on June 29, Utsumi said that Web3 is among the technologies the company is exploring.

“We’re not trying to be a Web 3 company,” said Utsumi. Instead, Web3 technologies such as blockchain and NFT are «functionalities» that the company will continue to explore as a way to grow the business and expand the potential of intellectual property (IP), he said. .

«That’s why I’d say we’re Web 2.5,» he added. “2.3 or 2.7 — somewhere in between.”

investment block

He said the company’s strategy is to invest in Web3 projects, including licensing the company’s IP for certain game titles to blockchain-based developers they trust to uphold standards. quality standards and meet the expectations of fans.

“Blockchain technology can certainly make a big contribution to the development of [gaming] industry and we are seriously assessing that potential by investing in a number of initiatives, be it by investing in the fund as a limited partner or by investing in developers. development,” said Utsumi.

He added that the strategy is a “multimedia” approach, which involves building a specific game on a variety of platforms, be it a console game, a game arcade, PC or mobile, collectibles, movies, music or even now self-made game platforms like Roblox.

“In theory, NFT could be a vehicle to bridge these disparate communication activities,” says Utsumi. “It would be great if we could connect with our fans using blockchain, we just don’t know how yet. We are still learning.”

An example of Sega’s multimedia approach is the IP licensing agreement between Sega, blockchain game developer Double Jump Tokyo, and decentralized blockchain gaming platform Oasys. Together, the three companies are developing the Sega video game titled Sangokushi Taisen — Three Kingdoms — into a blockchain-based game.

A hybrid physical and digital collectible game, originally released by Sega in 2005, based on the war-filled «Three Kingdoms» period of Chinese history. The gameplay allows two players to enter a battle based on the strength of the cards in the deck they hold. A hugely popular video game staple in Japan and across Asia, the franchise reportedly sold over 500 million physical card units used in the game.

“The business we do now will be similar to the process behind the Three Kingdoms,” said Utsumi. The company will select titles, such as video game franchises, that are popular in Asia – a market where gamers tend to consider incorporating blockchain technology into their favorite titles. as a «form of entertainment,» said Utsumi, rather than «evil» it could be considered western.

Therefore, despite the accuracy of reports that franchises like Sonic Hedgehog — familiar names in western markets — still a long way from being incorporated into blockchain, Sega is still in what Utsumi describes as “search mode” for initiatives ​Web3 games may become popular elsewhere.

“We’re trying not to offend people, but ultimately — in terms of technology — blockchain will be really useful to really enhance the experience of gamers,” said Utsumi.

“But we also understand the mentality of Western gamers. So we’re trying to figure out the best way by taking this type of initiative to first target more of the Asian market.»

On Monday, Sega announced an IP licensing agreement with Line Next Inc. – an NFT-focused affiliate of social media platform Line Corp. based in Tokyo – to develop “one of SEGA’s hugely popular gaming IPs” into a Web3 game. The IP in question is still unconfirmed.

Sega is part of the publicly traded Sega Sammy Holdings group, which has a market capitalization of US$4.55 billion and reports annual revenue of US$2.68 billion in 2022, down from US$2.7 billion of the previous year. Shares are up 25% in the past 12 months.

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