With Sony and Amazon potentially playing, NFTs look set to ride the next market wave upwards
As the prices of NFTs or non-fungible tokens enter 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 being touted as part of its ‘metaverse’ future.
At the latest, Britain’s plan to launch a government-backed “NFT for Britain”, as proposed by Prime Minister Rishi Sunak, may also be shelved. The project was originally intended to be launched in the summer of 2022, but failed to meet the deadline. And now, according to Chancellor of the Exchequer 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 doubts about the project, stating that there is not enough evidence to suggest that investing in NFTs is a wise decision for voters 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 Treasury on how the NFTs would work or be used.
When the plan was first 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 rather than embarking on an NFT project.
Despite these setbacks, other companies are rushing into the NFT market, with Reddit continuing to promote its “digital collectibles,” Sesame Street announcing an NFT collaboration, and Starbucks selling 2,000 NFTs as part of its Odyssey loyalty program .
But this is not all!
Sony Delves Deeper into NFTs, Registers Another Patent
Sony Interactive Entertainment, the parent company of the PlayStation brand, has applied for a patent for a framework that enables users to transfer and use NFTs across multiple gaming 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 features.
The framework also aims to make NFT ownership transferable between different end-user entities, and provides greater flexibility and interoperability across different simulations and platforms.
According to the patent abstract, the framework will determine whether a first end-user unit has performed a task within a computer simulation for which an NFT will be issued. In that case, the NFT is given to the end-user entity – ownership can also be transferred later – so that the digital asset can be used across multiple different computer simulations and across multiple different computer simulation platforms.
Once implemented, the NFT framework can bring exciting new use cases to mainstream game titles played by PlayStation 5 users. With the total number of active users on the PlayStation Network worldwide exceeding 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 can be used across generations, from PS4 to PS5, and can also be used for achievements and tournaments.
Impressively, players can 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 many partnerships and trademark registrations over the years. The company has taken steps to increase 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 players to control their avatars with their bodies in real time. And in February 2023, their ISP division, Sony Network Communications, teamed up with blockchain network Astar to create an incubation program for companies focused on building NFTs and DAOs with real-world utilities.
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, allowing users to enjoy a seamless NFT experience across multiple platforms.
Amazon is jumping into the NFT Fray as well
Despite the waning popularity of the NFT craze, tech giant Amazon seems to be pushing 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 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 being inserted into a gallery located on the official Amazon website, with resale options available once the NFT is unlocked. However, the flow of information hit a snag, as the links in the email to the gallery and resale page were broken.
Rumors about Amazon’s NFT marketplace have been swirling for weeks, with reports suggesting an April 24th launch date. The platform is said to focus on “blockchain-based gaming and related NFT applications” and will be accessible via 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, movies, 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 usage.
A look at NFT Slump
NFTs are a type of digital asset that represents ownership of a unique item or content, such as a piece of art, a music album, or a tweet. And unlike fungible tokens like Bitcoin or other cryptocurrencies, each NFT is unique and cannot be exchanged for anything 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 an increase in transaction fees.
But it wasn’t until 2021 that NFTs gained widespread use, when several high-profile sales made headlines, including the sale of digital artwork for $69 million by artist Beeple at auction house Christie’s in March 2021. The NBA has also created its own NFT- is, 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 growing 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, it is the soaring prices that attracted many, which have since fallen dramatically.
During the 2021 crypto winter, NFT sales fell to a 12-month low of around $1 billion in June 2021 after scaling a record high of $12.6 billion in January of that 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 managed to maintain their value without wild swings. However, even these NFTs have suffered significant declines from their all-time highs (ATH). For example, Bored Ape Yacht Club (BAYC) has fallen 77% from its peak, and is currently trading at $103k from a peak of over $460k.
Similarly, Cryptopunks has dropped 75% from an average price of around $400k to just over $100k. Meanwhile, the likes of Moonbirds and CloneX have picked up 94.6% and 94.1% respectively from ATH.
Conversely, top cryptocurrencies such as Bitcoin and Ethereum have performed better, down 59.51% and 64.19% respectively from their peaks. Also, cryptoassets 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 at the end of March from 81,590 at the end of February. Meanwhile, major companies such as Bitcoin and Ethereum have seen an increase in both trading volume and usage.
New wave of adoption
While NFTs have been embraced by several global brands such as Gucci, Nike and Adidas, as we talked about above, NFTs have seen a decline in 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 diving 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 had the highest return on investment of all the tools they used.
As the bear market passes, prices regain strength and people return to NFTs, more big brands will enter 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 an important target group.
Meanwhile, the recent interest of 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 drop in popularity and adoption during the ongoing crypto winter, the potential for NFTs to transform how we buy, sell and own digital assets remains significant.
With the support of these major players, we can expect to see a new wave of adoption and use 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 possibilities and opportunities for creators, collectors and investors alike.
