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Digital Memorabilia – What SEGA’s foray into the NFT market could mean for collectors

Non-fungible token (NFTs) are all the rage. Artists and collectors everywhere have been jumping onto the blockchain, pushing this new concept of digital ownership into the mainstream. SEGA has announced they too are going to be releasing NFT items this summer. So, what exactly is an NFT, and why should you care that SEGA is getting ready to launch its own line of digital memorabilia? Here’s the breakdown.

What is an NFT, and why would I want one?

When you buy a piece of art from an artist or reputable dealer, or a collector’s item from a licensed manufacturer, you get a certificate of authentication. Without the certificate, it cannot be proven that the piece was created by whom the seller claims without further confirmation by the artist or an accredited authenticator.

Using the cryptocurrency Ethereum, digital artworks can now be minted, or authenticated, through blockchain technology, equipping digital artworks with the same concepts of ownership and scarcity as physical art.

Why is this significant? Imagine an artist paints two landscapes; one with physical paint on a canvas, and one digitally on a computer using a tablet and painting program. Though the skillsets for each medium vary slightly, the talent and time needed to paint the physical canvas compared to the digital work is near identical, with perhaps the only major difference lying in cleanup and preparation time. When the artist has finished the physical canvas, they can sell the work as a one of a kind. The digital work on the other hand, despite taking just as much effort to finish, could not – up until recently – be assigned the same value. Because the digital painting could simply be exported indefinitely, there was no tangible “original” to own. NFTs fix this issue. Essentially, they are just certificates of authenticity in the digital realm.

Why would you want a minted jpeg or 3D model instead of just the raw file? Well, if you were offered Botticelli’s The Birth of Venus or a poster of Botticelli’s The Birth of Venus, which would you rather have? Both pictures are identical in composition, and you could get the same enjoyment from looking at the reproduction as you could the original. However, we all know there is something alluring, something more valuable, about the original. It was touched by the artist. Perhaps because we tend to see digital art as one step removed from the creator, this concept struggled to gain momentum prior to the introduction of NFTs. Now, collectors can proudly own a piece authenticated, original, digital art.

This all seems kind of flimsy tho…

Alright, digital artists are finally getting a cut from their hard work, but why would you want to own something digital and not physical? You can print a picture, sure, but part of what makes digital art appealing is the method by which it is consumed – through a screen, with headphones, or through a VR headset. The medium itself is partly what you’re buying into: digital art as it exists in the digital realm.

However, to really hit home what makes NFTs special, decentralization needs to be stressed. NTFs can be displayed and used on any decentralized platform. A good example is the 3D VR world Cryptovoxels. Cryptovoxels allows users to buy digital real-estate using Ethereum. Furthermore, users can display NFT products they own in the world, creating galleries or points of interactivity to showcase their collection.

Some gamers tend to think of digital assets as worthless. However, one need only look at the resell prices of MMO accounts, or the recent PS3/PS Vita store shutdown scare, to understand just how much value people truly assign to digital content.

Take a step back and think of all the digital content you “own”. Apps on your phone, DLC for video games, music from a subscription service – most of this content is tied into specific software or platforms. Your use of it is dictated by a publisher, centralized in its scope. The decentralization of art and digital items via the blockchain is not only empowering to creators, but collectors as well, as the owner can display (or hide) the works they own, keeping records of their inventory as they wish.

But what happens when the internet goes out? School of Block recently did an episode dedicated to transferring data, including, cryptocurrency without internet. Bits and bytes, it seems, could be as robust as paper and coin if given the proper infrastructure.

Obviously, digital art has its potential pitfalls, but so does physical art. Fire, water, sunlight, and even breathing can all deteriorate a work’s integrity. Displaying your fancy new digital artworks on something like a Meurel canvas on the other hand allows you to keep a whole gallery of art in one convenient place, and digital arts’ inherit duplicity means degradation is less of a worry. So, in the wastelands of the future, when the frescos of Santorini have crumbled and the pyramids of Giza have withered away, your great-great grandchildren may still be able to resell that jpeg you bought of Tyris Flare’s well-worn bikini (Your great-great grandchildren think you were kind of a pervert.)

Digital art with NFT
Can anyone spare me a couple Ethe?

So, what’s a SEGA NFT going to look like?

That’s the million Ethe question. Essentially, any piece of digital media can be minted, so sky’s the limit. Will we get landscape gifs of classic side scrollers? Original motion capture animations? Entire games? NFTs have done a lot to make digital art both more accessible and appealing, especially to Gen Y, who have used tech so heavily in their daily lives ever since childhood. I hazard to guess that most people reading this would agree technology and art have always gone hand in hand (no need to toss the ‘Are video games art?’ grenade into the room.) How much would you pay for a wire-frame animation of Sarah Bryant’s Dragon Canon? A never-before-seen video of the Saturn Shenmue prototype? The ROM itself?

Alternatively, SEGA may open their catalogue of assets, auctioning them off like movie studios sometimes do with props. How much would you pay for a minted jpeg of Sonic’s runners, Chakan’s hat, or Axe Battler’s well-worn battle underwear? (Your great-great grandchildren are starting to wonder why you spent all your Ethe collecting SEGA characters’ undergarments.)

Digital scarcity isn’t a new concept to SEGA. Last year, they released a number of prototypes for a very limited time, and people ate them up. Putting a price on this scarcity may be what they have in mind for their NFTs, and we could see prototypes like Golden Axed end up in the hands of collectors.

As mentioned, any digital item can be minted, so there’s really no limit or scope to what SEGA could sell. However, even in digital art, the concept of the artist’s hand is still relevant. So, while they could just mint a line of jpegs, I think it’s fair to say collectors are looking for something more. They want original files, used and developed by the artists and programmers, minted and sold as they were originally conceived. While the NFT market is hot right now, the question of reframed works are raising eyebrows. If the market is to thrive and instill these bits of digital history with the value they deserve, the focus will need to remain on preserving the originals.

Giving collectors a chance to curate the organization’s history is an idea several museums have begun experimenting with. Giving collectors ownership of digital versions of artefacts (or in the case of video game assets, ownership of assets themselves) is a crucial part of maintaining history. The housing, care, and curation of physical hardware is important, and there are a number of private collectors and museums dedicated to doing just that. However, the other side of this equation is housing the data itself, and how we can maintain this sort of artefact is question many are starting to ask.

Preservationist or Capitalist? What will a SEGA NFT grant you ownership of?

Gaming itself is primed for NFT implementation. Digital collectable card game developers are using NFTs for their platforms, and even big-time publishers like Wizards of the Coast are looking to adopt the technology. This, it seems, would be a win for both the consumer and manufacturer, as decentralized playing cards (for example) could be played across decentralized games, and players could feel good about buying an authenticated digital piece rather than a loot box or piece of DLC locked into a specific game.

Imagine owning a digital Daytona USA Hornet sticker and being able to put it on a car running in a decentralized racing game. Digital ownership could come to gaming in a way that doesn’t leave the consumer feeling burned. It could even lead to developers releasing limited release digital games. For those of us who missed out on Streets of Kamurocho on Steam, the only option to play it would be to adopt/buy a Steam account that has it in the library. If put on the blockchain, developers and consumers could resell their products directly (a concept still in its infancy). Furthermore, independent developers could release their products in limited numbers, giving collectors ownership of wholly original and unique games.

As NFTs expands from art to digital collectables as a whole, SEGA’s foray into the market will be telling of where it goes next. NFTs have not only given digital art the overdue recognition it deserves, it has empowered a whole new type of cyberpunk collector who deals in rarities and relics of the digital realm. How organizations are artists intend to sell their digital property, and how collectors will in turn collect it, is a question we’ll soon find the answer to.

SEGA VMU dancing
♫ Doo-da doo-da doo-doo-doo-doo doo-doo-doo…! ♫


I like my martinis dry and my shooters on-rails.

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