As NFT or non-fungible tokens’ prices go into goblin mode, brands are moving on from digital collectibles. Earlier this month, Meta announced that it would no longer support NFTs on Instagram and Facebook, despite once pitching it as part of its ‘metaverse’ future.
Most recently, the United Kingdom’s plan to launch a government-backed “NFT for Britain,” as proposed by Prime Minister Rishi Sunak, may also be shelved. The project was initially intended to be launched by the summer of 2022 but failed to meet the deadline. And now, as per the Economic Secretary of the Treasury, Andrew Griffith, the Royal Mint is not proceeding with the launch of an NFT at this time, but the proposal will be kept under review.
Harriet Baldwin, chair of the Treasury Select Committee, expressed her doubts about the project, stating that there is not enough evidence to suggest that investing in NFTs is a wise decision for constituents unless they are willing to risk losing all their money. The NFT for Britain concept was vague, with no elaboration from the Royal Mint or the Treasury on how the NFTs would function or be utilized.
When the plan was initially announced, it was stated that more details would be revealed soon. However, critics of the scheme, such as Labor MP and Shadow Chancellor Rachel Reeves, questioned Sunak’s priorities. They suggested that with the country facing a severe cost of living crisis, the government should focus on more pressing concerns instead of launching an NFT project.
Despite these setbacks, other companies are rushing into the NFT market, with Reddit continuing to promote its “digital collectible” avatars, Sesame Street announcing an NFT collaboration, and Starbucks selling out 2,000 NFTs as part of its Odyssey customer loyalty program.
But this is not all!
Sony Delves Deeper into NFTs, Files Another Patent
Sony Interactive Entertainment, the parent company of the PlayStation brand, has filed a patent for a framework that enables users to transfer and utilize NFTs across multiple game platforms.
The patent, titled “NFT Framework for Transferring and Using Digital Assets Between Game Platforms,” is intended to integrate NFTs into gameplay, allowing them to represent skins and other popular in-game functionalities.
The framework also aims to make NFT ownership transferable between different end-user entities, providing greater flexibility and interoperability across various simulations and platforms.
According to the patent abstract, the framework will determine if a first end-user entity has performed a task within a computer simulation for which an NFT will be provided. If so, the NFT is provided to the end-user entity — its ownership may also be subsequently transferred — so that the digital asset may be used across multiple different computer simulations and across multiple different computer simulation platforms.
Once implemented, the NFT framework could bring exciting new use cases to mainstream gaming titles played by PlayStation 5 users. With the total number of active users on the PlayStation Network worldwide surpassing 112 million as of December 2022, the patent could have a significant impact on the gaming industry.
Moreover, the patent also notes that the NFTs could be used cross-generationally, from PS4 to PS5, and can also be used for achievements and tournaments.
Impressively, gamers could even transfer in-game assets between devices such as smartphones, computers, tablets, headsets, and VR.
The Japanese multinational technology conglomerate’s interest in crypto has been evident through its numerous partnerships and trademark registrations over the years. The company has been making moves to grow its presence in the Web3 space, forging partnerships and testing early blockchain-based products.
For example, in November 2022, the company released motion-tracking wearables, allowing gamers to control their avatars with their bodies in real time. And in February 2023, its internet provider division, Sony Network Communications, teamed up with blockchain network Astar to create an incubation program for companies focused on building NFTs and DAO with real-world utility.
With the filing of the NFT-related patent, it appears that Sony is continuing to explore the potential of crypto and blockchain technology in gaming. If granted, the patent could pave the way for greater interoperability and flexibility across different gaming ecosystems, enabling users to enjoy a seamless NFT experience across multiple platforms.
Amazon Jumps into NFT Fray Too
Despite the waning popularity of the NFT craze, the tech giant Amazon appears to be moving ahead with NFT integration as well, with rumors suggesting the launch of its own NFT art gallery. This move could be a significant step toward the mass adoption of Web3 technology for Amazon’s millions of global users.
According to a CoinDesk report, an email sent to the managing editor appeared to confirm Amazon’s integration of NFTs. The email highlighted a digital token deposited into a gallery hosted on the official Amazon website, with resale opportunities available once the NFT is unlocked. However, the flow of information hit a snag, as the links provided in the email for the gallery and resale page were broken.
Rumors of Amazon’s NFT marketplace have been swirling for weeks, with reports suggesting a launch date of April 24. The platform is said to focus on “blockchain-based gaming and related NFT applications” and will be accessible through a tab that says “Amazon Digital Marketplace.”
Amazon CEO Andy Jassey has expressed openness to blockchain technology, stating in April 2022 that NFTs “will continue to grow very significantly.” He also mentioned the possibility of crypto integration “down the road.”
The integration of NFTs into Amazon’s platform would make sense, as it would allow users to buy and sell digital art, comics, films, music, books, and photography using tokenization. The ability to access NFT art collections on any device that supports Amazon Prime could be a breakthrough for NFT use.
A Look into NFT Slump
NFTs are a type of digital asset that represents ownership of a unique item or piece of content, such as a piece of artwork, a music album, or a tweet. And unlike fungible tokens like Bitcoin or other cryptocurrencies, each NFT is one-of-a-kind and cannot be exchanged for something else on a one-to-one basis.
One of the earliest examples of a successful NFT sale was the CryptoKitties game, which allowed users to buy, sell, and trade unique digital cats. The game became so popular that it clogged the Ethereum network and led to a surge in transaction fees.
But it hasn’t been until 2021 that NFTs gained widespread adoption, when several high-profile sales made headlines, including the $69 million sale of digital artwork by the artist Beeple at Christie’s auction house in March 2021. The NBA has also created its own NFTs, called NBA Top Shot, which allows fans to buy and trade unique moments from basketball games.
The rise of NFTs has been driven by a combination of factors, including the increasing popularity of blockchain technology, the growing interest in digital collectibles and art, and the potential for creators to monetize their work in new ways. But more importantly, the skyrocketing prices are what attracted many, which have since fallen dramatically.
During the crypto winter of 2021, NFT sales dropped to a 12-month low of about $1 billion in June 2021 after scaling a record high of $12.6 billion in January of the same year.
The cryptocurrency bear market has been harsh on both NFTs and cryptocurrencies, but some have fared better than others.
If we take a look at popular NFTs, they have been able to maintain their value without wild fluctuations. However, even these NFTs have suffered significant drops from their all-time highs (ATH). For instance, Bored Ape Yacht Club (BAYC) has dropped 77% from its peak, currently trading at $103k from a high of over $460k.
Similarly, Cryptopunks have declined 75% from an average price of around $400k to just above $100k. Meanwhile, the likes of Moonbirds and CloneX have tanked 94.6% and 94.1%, respectively, from their ATH.
Conversely, top cryptocurrencies like Bitcoin and Ethereum have performed better, with a decline of only 59.51% and 64.19%, respectively, from their peaks. Moreover, crypto assets are more liquid than NFTs, which means their trading volume is higher.
Another crucial metric, the total number of new addresses using NFTs, fell below 6,000 in late March from 81,590 in late February. Meanwhile, majors like Bitcoin and Ethereum have recorded an increase in both their trading volume and usage.
New Wave of Adoption
While NFTs have been embraced by several top global brands such as Gucci, Nike, and Adidas, as we talked about above, NFTs have been seeing a slowdown in their adoption. This is because they are still in the early stages of their life cycle, and many brands are still trying to understand the concept.
Currently, only a few “maverick brands” and individuals are adopting NFTs for the PR value, while the rest are waiting to see how the market matures before they dive into it.
Despite these challenges, NFTs have shown promising results for brand engagement. A report by software firm HubSpot revealed that 39% of marketing professionals who used NFTs for brand engagement found it to have the highest return on investment among all tools they used.
As the bear market passes, prices regain strength, and people get back into NFTs, more big brands will step into the NFT space, which will then persuade more brands to start exploring the possibilities of using NFTs for user engagement and offer exclusive experiences to customers, especially millennials who are a key target audience.
Meanwhile, the recent interest from tech giants like Sony and Amazon in the NFT market clearly indicates that this technology is here to stay. While there may have been a dip in popularity and adoption during the ongoing crypto winter, the potential for NFTs to transform how we buy, sell, and own digital assets is still significant.
With the support of these major players, we can expect to see a new wave of adoption and usage for NFTs, driving innovation and growth in the market. As we move forward, it will be exciting to see how NFTs continue to evolve and reshape the digital landscape, creating new opportunities and possibilities for creators, collectors, and investors alike.
The post With Sony and Amazon Potentially Making Plays, NFTs Look Poised to Ride the Next Market Wave Upwards appeared first on Securities.io.
