Sega Corp., the 60-year-old legendary Japanese gaming studio, is stepping away from Web3 and blockchain games, according to statements made by the firm’s Co-Chief Operating Officer Shuji Utusimi. The executive stated that current Web3 games are “boring” and plans to withhold the company’s most popular franchises from external blockchain gaming projects.

Sega to Step Away from Web3

Legendary video gaming and entertainment company Sega Corp. announced it plans to exit the blockchain gaming market, citing the persisting crypto market downturn and the lack of interest in web3 gaming. In particular, Sega intends to withhold its biggest game franchises from third-party blockchain projects as it seeks to prevent the devaluation of its content, the company’s co-COO Shuji Utsumi told Bloomberg.

Additionally, Sega will also stop developing its blockchain games for the time being, Utsumi added. The move marks a major stance shift for Sega, one of the biggest advocates of play-to-earn (P2E) blockchain-based games.

“The action in play-to-earn games is boring. What’s the point if games are no fun?”

Utsumi said in an interview with Bloomberg News.

With this change in approach, Sega will also stop letting third-party blockchain gaming projects use its Three Kingdoms and Virtua Fighter characters for non-fungible tokens (NFTs), which confirm a digital asset’s ownership. Sega first announced its plans to foray into NFTs during the crypto market bull run in 2021, which attracted criticism from its community.

Interest in Web3 and Blockchain Games is Waning

Alongside the broader crypto market, blockchain and Web3 gaming peaked during the bull market in 2021, with companies like Axie Infinity experiencing unprecedented growth. However, since then, the crypto industry has embarked on a sharp downward trajectory, highlighted by several high-profile collapses in 2022.

Sega’s decision confirms that users’ interest in Web3 and P2E games is fading as gamers do not as enthusiastic about implementing blockchain technology into games. Many see Web3 and blockchain tech as a potential cash-grab opportunity for publishers.

Last year, game development giant Ubisoft Entertainment also cooled off on NFT games, saying the market is still in “research mode.” Meanwhile, other gaming studios remain committed to the Web3 market, such as Square Enix, the developer of Final Fantasy franchises.

This article originally appeared on The Tokenist

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