‘Neopets’ Cancels NFT Game After Raising Money From Polygon, Avalanche

Just some months in the past, Neopets Meta CEO Dominic Regulation publicly promoted the idea of “play-and-earn” Web3 gaming and instructed Forbes that the cutesy Neopets franchise provided “all the correct substances” for an NFT sport. However now it’s been abruptly canceled—and it’s not totally clear why.

Neopets Metaverse, a free-to-play title based mostly on the 1999 digital pet simulator internet sport, was in its alpha stage of improvement and the crew had already offered over 9,000 Solana NFTs throughout a number of collections—plus it raised tens of millions from backers together with Polygon Ventures and Avalanche’s ecosystem fund.

On Monday, the Neopets Crew—which refers to itself because the acronym TNT—revealed a weblog publish explaining the Neopets Metaverse shutdown and its pivot to a non-crypto cellular sport in improvement referred to as World of Neopets.

Neopets Metaverse Transition: A Message from The Neopets Crew

Greetings, Neopians!

Change is within the air, and Neopets is coming into a brand new period!

However what precisely does that imply?

Nicely, for one, Neopets has new management, which is working as a brand new, cohesive unit with TNT to make sure…

— Neopets Metaverse (@NeopetsMeta) July 17, 2023

“TNT has taken an in depth take a look at each nook and cranny of Neopets, and after doing so, the choice has been made to transition away from the Neopets Metaverse sport and redistribute these sources to the event of a sport that we really feel can higher mirror our values and imaginative and prescient,” the corporate stated.

“This determination was not made calmly,” TNT added, “but it surely was made for the very best motive: we wish to design a sport that’s extra in step with what the neighborhood has been asking for!”

Neopets is now additionally beneath “a model new management crew,” per the publish. Does this imply that Regulation, its Hong Kong-based Web3 advocate who beforehand labored at varied monetary companies, is out?

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It truly seems that he’s staying on the firm. Regulation’s Linkedin profile nonetheless reveals him at Neopets, and his title shifted this month from “Chief Metaverse Officer” to CEO. That stated, it’s unclear whether or not it was his determination to maneuver Neopets away from NFTs.

Regulation has not but responded to Decrypt’s request for remark.

Nevertheless, Neopets has secured a “administration buyout,” which means it’s going to turn out to be impartial for the primary time in 18 years. Neopets was purchased by Viacom in 2005, who later offered it to Jumpstart, which was then acquired by Japanese gaming agency NetDragon—who then shuttered Jumpstart final month.

“Free from the company baggage that existed previously, the newly united TNT has now been entrusted with the decision-making and total model technique of Neopets,” the weblog publish reads.

The brand new Neopets entity known as World of Neopia, Inc. and guarantees its followers month-to-month updates, AMAs, and a model ambassador program. TNT plans to launch a brand new homepage for Neopets on July 20 and can use an emulator to replace its previous Flash video games and make them playable once more.

Unfinished enterprise

In response to the information, a number of Twitter customers referred to as the now-canceled NFT sport “a rug” or rugpull—referring to a kind of rip-off during which creators promote NFTs with guarantees of future utility, solely to desert stated mission earlier than the guarantees are fulfilled with out refunding patrons.

Neopets assured one Twitter person that it “will proceed to help the Web3 neighborhood.” The corporate echoed that sentiment in its weblog publish as nicely, noting that it’s going to proceed to function a Discord server for NFT holders.

Whereas TNT stated it has “repurposed a few of the greatest property” from the canceled sport, it’s unclear whether or not NFT homeowners will be capable to declare refunds or see any advantages within the new cellular sport, which doesn’t use any type of crypto. A Neopets consultant instructed Decrypt that it plans to supply NFT homeowners “perks,” together with its digital “NC” in-game forex and digital gadgets on the platform.

“We’re so grateful for the help of the neighborhood that has sprung up across the Neopets digital collectable strains, and as an indication of our appreciation we will likely be asserting extra particulars on future perks quickly,” the consultant stated. “These might embrace bodily merch, NC gadgets, NC, entry to IRL occasions, and extra.”

We’ve repurposed a few of the greatest property from the Neopets Metaverse sport, however now we have refocused the core sport loop and total path.

We’ll proceed to help the Web3 neighborhood that has embraced possession of those collections.

— Neopets Metaverse (@NeopetsMeta) July 17, 2023

Requested if Neopets pivoted away from NFTs resulting from neighborhood backlash, an organization consultant instructed Decrypt, “Listening to the voices of the neighborhood is paramount to the success of our model. It’s necessary to our crew to hearken to the wants and desires of our followers—that is what’s greatest for Neopets total.”

Neopets’ crypto push

Neopets has a historical past of exploring NFT integrations. Again in 2018, it briefly experimented with Ethereum NFTs. However Neopets fansite JellyNeo estimates that only one,800 NFTs had been offered, resulting in a meager take of roughly $14,500 on the time.

After TNT stated it had been operating Neopets at a loss for over a decade, it raised $4 million in funding in January from plenty of enterprise capital companies, together with notable crypto-centric companies. The listing included Polygon Ventures, Avalanche’s Blizzard Ecosystem Fund, HashKey Capital, IDG Capital, and NetDragon.

A Neopets consultant instructed Decrypt that its backers stay “extraordinarily supportive” of the corporate regardless of the present pivot away from NFTs.

“Our buyers consider within the crew’s skill to execute on constructing a brighter future for Neopets,” the consultant stated. “They’re extraordinarily supportive of our imaginative and prescient for the IP and what now we have within the pipeline.”

Within the January funding announcement, HashKey Funding Director Xiao Xiao stated that Neopets had “nice potential in its NFT and P2E [play-to-earn] options,” and that “founders like Dominic [Law]” had been in a position to “all the time execute and ship.”

However Regulation himself instructed Forbes only a few months later that he believes “play-to-earn” video games resemble Ponzi schemes—and that he prefers a “Web3 gaming” mannequin that stops speculators from manipulating markets by specializing in enjoyable gameplay at the start.

Representatives at Ava Labs, IDG, and HashKey didn’t instantly reply to Decrypt’s request for remark. Polygon Ventures declined to remark.

In January, Regulation stated that the NFT sport “will seize the spirit of the Neopets neighborhood.” However now, the Neopets crew is singing a special tune—that shifting away from NFTs is in the end greatest for its neighborhood.

Huge backlash

Given the announcement remark about responding to what the neighborhood was asking for, the Neopets Metaverse sport might have been canceled partially due to the backlash from followers.

One indignant Neopets fan who began the #NoNeoNFTs marketing campaign beforehand instructed gaming publication Polygon in 2021 that he believed that NFT video games had been “low high quality and scammy.” The fan additionally accused the NFT neighborhood as a complete of being “homophobic” and “racist” as the reason why he didn’t need the Neopets model to affiliate itself with digital property.

Different publications additionally slammed Neopets for its determination to launch NFTs. The Verge referred to as Neopets NFTs “the fracking of your little one recollections.” Kotaku argued that the Neopets NFTs “appear to be rubbish.” And Sport Rant claimed that Neopets was happening a “dangerous path” by releasing NFTs.

Whereas Neopets apologized again in 2021 for the “large change” introduced on by the creation of the Neopets Metaverse sport, it continued to construct and help its NFT plans—till now, that’s.