If you are a Melbournian, you will remember about nine years ago when you walked through Flinders St Station and heard a song to the tune of “set fire to your hair” and “poke a stick at a grizzly bear” along with this, you would have been inundated with humanoid looking ‘bean’ characters posted everywhere you walked. Well what you were witnessing was a commissioned public service campaign called “Dumb Ways To Die” (DWTD) for Melbourne Metro Trains, which has attracted over 229 million views on its viral video on YouTube.
Not everyone lost interest in these little beans as the years went on. PlaySide Studios (ASX: PLY) acquired the DWTD brand and the rights to their bipedal jelly bean looking characters from Metro Trains for $2.25 million, with plans to launch an NFT collection based on the characters.
What is an NFT?
An NFT, which stands for a non-fungible token, is a unique unit of coding that allows digital content – like a video, image or song – to become logged and authenticated on cryptocurrency blockchain as a unique digital asset that cannot be replicated. Once the content is logged onto the blockchain, every sale or transaction is recorded, creating an easily accessible public ledger of the history and provenance of the content. The primary purpose of NFTs is to make it easy to own and sell authenticated digital assets which are unique with traceable ownership.
The Studio adapted the characters, each displaying variable injuries and trinkets, and launched their ‘Beans NFTs’ on Thursday last week. The release saw over 7,000 NFTs sold to buyers, with fans paying 0.3 ETH or $1,280 to ‘mint’ each image into existence. The Company said it had booked $8.38 million in net revenue following the launch, and will continue to earn royalties every time the NFT’s are resold.
The release attracted the attention of many, with a total of 3,565 wallets holding 7,120 different Bean NFTs. Which included Melbourne-born NBA star Ben Simmons, a dedicated NFT collector, who acquired nine Beans for himself.
Each Bean will end up being a 3D avatar in the Studio’s upcoming metaverse game. Dubbed “Bean Land,” the game is expected to launch in late 2022, with a mobile version scheduled for next year. These NFT releases are laying the grounds for their long term goals of developing games for the metaverse.
Shortly after release, the Company also signed a 10-month fixed price work-for-hire agreement with Activision Blizzard, which Microsoft acquired just a few weeks ago for USD $68.7 billion. This agreement will see PlaySide provide production, engineering and user interface development services to the video game giant to create and distribute NFT and metaverse games.
PlaySide isn’t the only Company embarking on ambitious projects into the NFT/Metaverse space. Last Friday, iCandy Interactive (ASX: ICI) officially completed its acquisition of Lemon Sky Studios, which were the creators of games such as Call of Duty Infinite Warfare, Need for Speed Hot Pursuit and many others, with plans to launch a pipeline of NFT collections and metaverse gaming projects. The acquisition cost $44.5 million, with iCandy paying $17.8 million in cash and issuing 26.7 million shares.
Why are investors buying up NFTs?
In 2021, the NFT world quickly changed from an emerging industry into a flourishing landscape for artists. A group of roughly 30,000 cryptocurrency investors got together and paid over USD $90 million for an NFT piece called ‘The Merge’, and it officially became the most expensive NFT ever sold. Investors and traders have identified NFTs as a market where capital gains can be made. When an artist creates a limited edition piece or collection, you have the option to buy it at its original price, and with the hopes of demand going up based on the finite supply of those minted in the collection.
iCandy expects Lemon Sky to provide the ‘best-in-class’ experience and skills to develop more AAA games, intellectual property, and independent game releases. The Lemon Sky team has already begun developing three NFT projects, similar to PlaySide, and nine NFT and metaverse based game titles.
It is seemingly straightforward that interest around companies venturing into the new metaverse is picking up speed amongst retail investors. So as companies continue expanding into the metaverse, developing games that require NFTs that people actually want to play, and bringing the gaming communities together – investors will be keeping an eye out for the companies that can bring this dream to fruition.
What can NFTs be used for? Do they serve any legitimate purpose?
NFTs used to be just digital content, but the industry started becoming much more than that with real-world use cases for the application as digital assets. The growing movement for NFTs with utility creates a different value proposition for the tokens. For example, NFTs are commonly used for member-only access to events and parties where total capacity is limited to the number of those NFTs minted and you have to be the owner of a token to gain membership. Other common use cases for NFTs to get a physical version of your asset – a company called RTFKT has a collection of sneaker NFTs and allows you to receive the actual corresponding unique sneakers. NFTs are also used for voting, where an organisation will enable you to cast a vote as long as you own one of their NFTs, which is similar to having rights as a shareholder.