NFT Market Collapses Just As Square Enix Sells Tomb Raider To Bet Big On Blockchain

NFT Market Collapses Just As Square Enix Sells Tomb Raider To Bet Big On Blockchain
Screenshot: Square Enix

You know what no one could ever have predicted? That a market based on imaginary ownership of infinitely duplicable jpeg images might not be end-game, long-term sustainable. As The Wall Street Journal reports, the NFT market is “flatlining,” down 92 per cent from last September. Which makes it just the most incredible time for Japanese publisher Square Enix, famed for properties like Final Fantasy, to sell off most of their Western-facing IP and studios to gamble on the batshit scheme.

Yesterday we learned that Square Enix is intending to sell Crystal Dynamics, Eidos Montreal and Square Enix Montreal to the monolithic The Embracer Group, along with IPs for games like Deus Ex, Tomb Raider, Thief, and Legacy of Kain. Why? Because, to quote Squenix, “the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud.” Which is to say, its previously announced desire to milk the NFT/blockchain market.

NFTs feel like the most extraordinarily precise emblem of the 2020s. It’s all a glaringly obvious pile of bullshit. Companies are literally selling a line of code on what they call a blockchain, to repackage the extremely old idea of digital asset ownership as the next big investment you should get in on now while the going is good. You’ve been able to own things like video game skins for a long time, of course. Somehow, though, many of these companies are putting a lot of effort into pretending that you can now own a picture, and then pretending that in doing so the picture somehow becomes imbued with inherent worth — all given life by enough idiots clapping their hands and shouting how they believe in fairies.

Unfortunately, a lot of these clapping idiots wear expensive suits and talk loudly in boardrooms, and as with every other aspect of the scam-fest that is “web 3.0,” businesses have been desperately scrambling to profit before the whole illusion blows away on a breeze. And it seems that breeze might have shown up earlier than anyone was expecting.

The WSJ doesn’t mince words in its reporting. The opening line is simply, “The NFT market is collapsing.” Citing not only that 92 per cent fall in sales, but also the extraordinary drop of “active wallets” by 88 per cent since November.

This is partly due, it seems, to the rising interest rates that are strangling the poorest, but in turn is causing the richest to be far less risky in their speculation. And you can’t get much more speculative than betting on mass delusion of jpeg ownership.

Photo: Jim Smithson / Kotaku, Getty ImagesPhoto: Jim Smithson / Kotaku, Getty Images

That’s a delusion that’s been breaking for a lot of people of late, who have discovered the promises that NFTs would somehow gain value over time isn’t vaguely true. We recently reported on Sina Estavi’s attempt to sell the NFT of Jack Dorsey’s first tweet (linked so you can own your own copy for free), for which he’d paid $US2.9 ($4) million, expecting to see bids of, cough, $US50 ($69) million, and received nothing higher than $US3,600 ($4,998). He’s since had a bid of just shy of $US14,000 ($19,435), or less than 0.5 per cent of what he paid for it a year ago.

Hilariously, as the WSJ reported last month, his reason for not parting with it for this over-payment of $US14,000 ($19,435) is, “because I think the value of this NFT is far greater than you can imagine,” and “whoever wants to buy it, must be worthy.”

Unfortunately for us, many games publishers are betting on this one-legged horse, and the consequences could be bleak. From Square Enix to Ubisoft to Sega to Team 17 to Zombie Atari to Konami to GameStop, this industry is thigh-deep in this bullshit.

NFTs are QAnon if it were stock, if believing in a flat Earth could be bought and sold. They depend on the belief in their own existence to exist, requiring faith and religious notions of “worthiness” in order to flourish. As the planet hits the financial consequences of the last two years, it appears such faith is not so easily found.

NFTs were always going to be a bubble, and no doubt they’ll have little spikes, resurgences of interest with each new nonsensical twist, reaching nowhere near as high as 2021’s but allowing the True Believers to keep duping themselves and others for a while to come. But let’s hope that this news of a market collapse is finally enough to scare the games industry away from this ludicrous money pit. We’ve reached out to Square Enix to ask if the news has given them any pause.

If not, well, I’ve got these lovely jpegs of some bridges I could sell them.

 

Comments

  • I hope every publisher that got in on this transparent scam gets taken to the cleaners over it.

    • I don’t see how they can make money, long-term. They have to unload enough NFTs to make money, but in the process of scamming people, they’ll lose their customer base. If they hodl, then when the value inevitably evaporates, they lose out there.
      Although I suppose celebrities and influencers get away with it constantly.

  • When the worlds greatest investor Warren Buffet came out a day ago and said he would never buy Crypto because it has zero revenue/production value and is utterly worthless… the market bombed.

    “He said $25 for all the bitcoins in the world, is overpriced.”

    Musk was angry.

  • Kotaku’s absolute disdain for all things web3.0 and blockchain is rather hilarious.
    You’d think a “tech” website/blog would try and be up to date with new technologies instead of being all old man yells at cloud every time crypto is in the news.

    • So because they are a “tech” website, they can’t comment how poor actual application of that tech is producing volatile markets, or how fundamentally flawed NFT proposals in gaming have become.

      Crypto has way too much hype and is speculative bubble, yes there is a interesting technology in their, but it’s current application is aggregious on average. Web3 will crash harder than the dot com boom.

      Web3 has this marvellous technology and are using it for stupid greedy reasons.

      Even the best analysis in crypto finance are predicting 98% market failure when the bubble bursts because the nft asset flipping is eroding the market.

      Also this is not a financial website or a crypto website, it’s gaming website, and nft gaming is trash, loot boxes are trash, amd anything that manipulates players to pay more for substandard experiences are trash.

      • I don’t disagree with your overall sentiment, but your comment “Even the best analysis in crypto finance are predicting 98% market failure when the bubble bursts because the nft asset flipping is eroding the market” is a bit hyperbolic. NFTs are a very small subsection of the market… we’ve seen these massive corrections already in other crypto technologies. It’s just consumers becoming savvier and learning what actually has value. I think NFTs in general are pretty interesting, but how they are being sold currently is a scam and the market has clearly gotten wise to it.

        • I meant 98% failure of the NFT market. (Not all crypto)

          They are concerned a knock on effect especially in Etherium block chain (used to gas most NFTs) as well as market reaction will have a knock on effect into Crytpocurrency when NFTs collapse, especially since NFTs are often paid with Cryptocurrency while daily transactions are inflating crypto prices. So a cascade collapse could happen if crypto traders are not prepared for such volatility by overstreching their digital wallet.

    • Maybe it’s because they are a tech website that they’re uniquely qualified to call bullshit bullshit?

        • That fact that the article doesn’t happen to mention or agree with a particular position that you personally happen to think is important is not evidence of incompetence. You can disagree without effectively calling someone an idiot.

          That aside, the reality is that a great many tech commentators, including many very technologically literate readers of this website, have no objections whatsoever with the content of this article. The only real disagreement here is whether NFTs are 98% scams or 100% scams.

          • Oh I agree overall with the article’s position, I don’t agree that a “tech” website means automatic expert opinion on the matter.

    • “being up to date on crypto means unquestionably supporting it, I am very smart” – Erebus.

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