If you’re like me and facepalm every time you hear the words “blockchain” and “NFT” in relation to the video game industry, you probably have a nice bruise on your forehead. The last few weeks have certainly added to it. Square Enix has led the charge on insisting blockchains are the future. So confident is Square Enix president Yosuke Matsuda’s belief in the toxic technology, two weeks ago, the publisher sold off several of their prominent franchises, including Tomb Raider and Deus Ex to Embracer Group in hopes of funding NFTs.
Most likely, this move is at best short sighted. However, Square might want to take a lesson from another company that recently lost millions in revenue to NFT scams. Bored Ape Yacht Club, the NFT collection owned by blockchain tech firm Yuga Labs, is best known for the silly ape pictures generated by AI technology. The collection made headlines last year when rapper Eminem bought his own apey likeness for an obscene amount of money. It’s been in the crosshairs of up and downs, equaling out to millions of dollars per fluctuation, as have most cryptocurrencies and NFTs.
Part of this is due to hacks and scams. Now Yuga Labs is in midst of another strange twist. A few months ago, the company announced a NFT-related gaming initiative. Players paid out thousands of dollars for Otherdeeds, “the key to claiming land in Otherside.”
Don’t go ape for ApeCoin yet
The play-to-earn game was scheduled for release in April and would have introduced a new currency- ApeCoin. Apparently, the sale of Otherdeeds began April 30th and has by and large been a disaster. The deeds could only be bought with ApeCoin, and the process created a buildup on the blockchain. To compensate, buyers were required to pay an excessive fee, in some cases over $14,000 USD in “gas fees.”
To complicate matters, many of these transactions failed because of what Yuga Labs described as a “bottle neck” of Ethereum, the material the ApeCoin is sourced from, leading to buyers losing their investments. Yuga Labs apologized for the loss and refunded the “gas fees.” Or so they said.
Reports from the NFT buyers indicate that some have still not received a refund. Others were scammed out of NFTs valued at over $16 million. When or if that will be refunded to buyers remains to be seen.
So does what Otherside is about. There aren’t many details about it, and the game trailer offers little clarity. It definitely carries a “buyer beware” feel to it. And seriously, considering the state of the economy around the world, perhaps those funds had better be spent going towards buying actual land for themselves or others.
Despite the crazy amounts lost by individual buyers, Yuga Labs still managed to rake in a cool $887,360, 860 across 37, 689 transactions. That’s an average of $23,537 USD, as of this printing. If you’re feeling a bit disgusted, you’re not alone. But hey, at least the Koda’s, sprite like creatures worth millions each, can fart. We’re saved.
