Blockchain & Gaming Industry Topics 2023.7

Google has announced that it will shut down its game streaming service Stadia in January 2023.After its release in 2019, the service was rolled out progressively across the world, but finally came to an end without ever landing in Japan.

Stadia is a cloud gaming service provided by Google.

It is a groundbreaking concept that allows users to easily access and play games from smartphones, tablets and PCs, without the need to purchase special hardware or download software, as the games are distributed and rendered online.

However, while several such cloud services have emerged in addition to Stadia, they have yet to gain widespread adoption. So why did Stadia fail? Firstly, cloud gaming requires a fast and stable internet environment, which is not widely available in many areas.

In Japan in particular, high-speed communications such as fibre-optic lines and 5G are not yet widely available, making it unsuitable for Stadia to offer its services. Another reason for Stadia's failure was that, although it was a monthly subscription-based service, it did not offer an attractive line-up of games to match the price.

Stadia had also announced that it would develop its own games, but that development team was also disbanded. It should be mentioned, however, that Stadia also had some notable features not found in conventional games hardware and software.

For example, streaming on Stadia could be watched in the same way as YouTube videos, and it was also possible to join games directly from YouTube videos.

There was also a feature that allowed YouTube live streamers and viewers to play games together. With the popularity of the live game genre on various video sites, this had the potential to offer a new experience for distributors and viewers.

Unfortunately, these features were not used much in practice. The main reason for this was the lack of attractive software. Users are not attracted by technology or concepts, but by attractive experiences.

Stadia's failure to deliver what users really want was a factor in its failure.

Why is the ‘life expectancy’ of blockchain games so short?

Blockchain games (BCGs) have been anticipated as a ‘new game’ since late 2021, but as of 2023, no productions have been created that can be said to have reached the masses, including existing game fans. Such BCGs are also said to have a very short lifespan compared to games in general.

Since BCGs are compared to games that are operated rather than sold out, let's compare them to PC online games and smartphone games. Although there is no clear data on the average lifespan of both types of games, it is estimated to be around two to three years, based on the length of operation of completed titles.

Only a small proportion of these titles have been in service for five or ten years. On the other hand, it is not uncommon for BCGs to end their services within a few months. In 2022, in particular, a number of very low-quality titles were released to take advantage of the ‘BCG boom’, and there were a number of cases where the service was terminated in a short period of time.

One reason for this may be due to the BCG's revenue structure: while BCGs earn revenue by selling tokens and NFTs before and after release, after release their main source of revenue is often fees generated from user-to-user transactions.

However, in order to stimulate user-to-user transactions, measures are required to continue to acquire large numbers of new users and to continue to increase the value of NFTs and tokens. Such operational projects are much more labour intensive than initial sales, but are not as profitable (as they only represent a few per cent of the transaction value).

In other words, the revenue structure is such that there is little benefit for the operator to run the game in the long term. Of course, there is also the aspect that shoddy productions that merely took advantage of the BCG boom have failed to gain popularity and soon ceased service, but unless the profit structure problem is broken down, it will be difficult to reverse the ‘BCGs are short-lived’ picture.

Nintendo shares soar as we enter 2023.

High-profile sequels and films support the breakthrough

▶︎ The Super Mario Brothers Movie tells the story of Mario and Luigi facing a world crisis in a new world filled with magic.

In April 2023, Nintendo's share price is rising. This is due to the anticipation for the game The Legend of Zelda: Tears of the Kingdom and the blockbuster success of the film The Super Mario Brothers Movie.

The Legend of Zelda: Tears of the Kingdom, the sequel to The Legend of Zelda: Breath of the Wild, which was released in 2017 and sold more than 30 million copies worldwide, is scheduled for 12 May 2023 and is expected to be as successful as its predecessor, having received high advance reviews.

Meanwhile, the worldwide hit film The Super Mario Brothers Movie is based on Nintendo's Super Mario video game series and was co-financed by Nintendo and Universal Pictures. It is an animated film featuring the adventures of Nintendo's most iconic characters, Mario and Luigi.

When the film was released worldwide in April 2023, it immediately became very popular and its box-office revenue in Japan exceeded 2 billion yen by 1 May. Furthermore, the worldwide box office has exceeded USD 1 billion, making it the highest-grossing film based on a video game of all time.

Nintendo announced its entry into the film business in 2016 and established a wholly-owned subsidiary, Nintendo Pictures, in 2022. The film then went on to become a global hit. While the failure of Final Fantasy in the past is recalled when it comes to films by video game companies, Nintendo seems to have achieved great success.

These influences have also boosted Nintendo's share price, which was approximately JPY 5,000 in March 2023 and topped the JPY 6,000 level in May. Looking at the share price trends over the past few years, after hitting the JPY 7,000 level between 2019 and 2020, the share price has been on a downward trend for several years, but has now started to rise again.

AI as a game engine.

Blockchain game ‘Prompt Monsters’.

▶︎ In ‘Prompt Monster’, monsters are automatically generated according to keywords.

The BCG Prompt Monsters, which incorporates AI technology, a hot topic these days, was released on 1 May. It was developed by the domestic company XYLO COPA Corporation and the platform is MCH Verse, a domestic BCG-specific chain ‘Oasys’.

A feature of this work is that the AI automatically creates monsters when prompts (command sentences for giving instructions to the AI service) are typed in. For example, if you enter keywords such as ‘dragon/flame/steel’, monsters based on these words are automatically generated, and you can use the generated monsters to fight against each other.

The game can be seen as an AI version of games such as Monster Farm (where monsters are generated from music CDs) and Barcode Battler (where monsters are generated from product barcodes), which were popular in the past.

The game has an originality and a high degree of freedom in the creation of monsters, although the battles are played automatically on the text, which gives the game a rather bland impression. The prompt input and monster creation are free of charge, and the monsters can also be converted to NFT (NFT conversion costs 50 MCHC = approximately ¥500).

In the future, there are plans to add functions such as the automatic generation of images of created monsters by AI and the fusion and cultivation of monsters, which is likely to become a hot topic as a game that uses new technology.

K-pop industry exploring the use of the metaverse

The K-pop industry is actively using the metaverse.

BTS, a seven-member idol group popular in Japan, held a Music Video Watch Party on the Decentraland metaverse service in August 2022. Many other artists are also performing on the virtual stage, such as the four-member female idol group BLACKPINK, which held a virtual concert in the popular smartphone game PUBG MOBILE.

In addition, the group ‘aespa’, which was born in 2020, has a worldview of ‘meeting an avatar, your other self, and experiencing a new world’, and each of the four members is also developing activities as an avatar on the metaverse.

It may not be long before the K-pop industry will see the spread of ‘live performances by artists’ as an example of the use of the Metaverse.

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