Just a few months ago, Dominic Law, CEO of Neopets Meta, publicly promoted the concept of “play-and-earn” Web3 gaming, telling Forbes that the adorable Neopets franchise provided “all the right ingredients” for an NFT game. But now it’s been abruptly canceled – and it’s not entirely clear why.
Neopet’s Metaversea free-to-play title based on the 1999 virtual pet simulator web game, it was in the alpha stage of development and the team had already sold more than 9,000 Solana NFTs across multiple collections – plus it raised millions from backers including Polygon Ventures and Avalanche’s ecosystem fund.
On Monday, the Neopets team, which refers to itself as the acronym TNT, published a blog post explaining the closure of Neopets Metaverse and its pivot to a non-crypto mobile game in development called World of Neopets.
Neopets Metaverse transition: A message from the Neopets team
Greetings Neopians!
Change is in the air and Neopets is entering a new era!
But what exactly does that mean?
First, Neopets has new leadership, working as a new cohesive unit with TNT to ensure…
— Neopets Metaverse (@NeopetsMeta) July 17, 2023
“TNT scrutinized every nook and cranny of Neopets and then made the decision to move away from the Neopets Metaverse game and reallocate those resources into developing a game that we believe reflects our values and vision. ”said the company.
“This decision was not taken lightly,” TNT added, “but it was made for the best reason: we want to design a game that is more in line with what the community has been asking for!”
Neopets is also now under “a brand new leadership team,” the post said. Does this mean Law, the Hong Kong-based Web3 lawyer who previously worked at several financial firms, is gone?
Google allows games and apps in the Android Play Store to offer NFTs
Looks like he’s staying with the company. laws LinkedIn profile still shows him at Neopets, and his title shifted from “Chief Metaverse Officer” to CEO this month. That said, it’s unclear if it was his decision to move Neopets away from NFTs.
The law has not yet responded Decrypt‘s request for comment.
However, Neopets has secured a ‘management buyout’, meaning it becomes independent for the first time in 18 years. Neopets was purchased in 2005 by Viacom, who later sold it to Jumpstart, which was then acquired by Japanese game company NetDragon, which then closed Jumpstart last month.
“Free from the corporate baggage that existed in the past, the newly unified TNT is now charged with the decision-making and overall brand strategy of Neopets,” the blog post reads.
The new Neopets entity is called World of Neopia, Inc. and promises its fans monthly updates, AMAs, and a brand ambassador program. TNT plans to launch a new homepage for Neopets on July 20 and will use an emulator to update its old Flash games and make them playable again.
Unfinished business
In response to the news, several Twitter users called the now-cancelled NFT game “a carpet” or back pull—referring to a type of scam where makers sell NFTs with promises of future utility, only to abandon the project before the promises are fulfilled without refunding buyers.
Neopets assured a Twitter user that it “will continue to support the Web3 community.” The company also echoed that sentiment in its blog post, noting that it will continue to operate a Discord server for NFT holders.
While TNT said it has reused “some of the best assets” from the canceled game, it’s unclear whether NFT owners will be able to claim refunds or see benefits in the new mobile game, which doesn’t use any form of crypto. That’s what a representative of Neopets said Decrypt that it intends to offer NFT owners “benefits”, including the digital “NC” in-game currency and digital items on the platform.
“We are so grateful for the community support that has sprung up around Neopets digital collection lines, and as a token of our appreciation, we will be announcing more details on future benefits soon,” said the representative. “This could include physical merchandise, NC items, NC, access to IRL events, and more.”
We reused some of the best assets from the Neopets Metaverse game, but we refocused the core of the game and set the overall direction.
We will continue to support the Web3 community that has embraced ownership of these collections.
— Neopets Metaverse (@NeopetsMeta) July 17, 2023
Asked if Neopets was turning away from NFTs due to community backlash, a company representative told Decrypt“Listening to the voices of the community is critical to the success of our brand. It’s important for our team to listen to the needs and wants of our fans – this is best for Neopets in general.”
Neopets crypto push
Neopets has a history of exploring NFT integrations. In 2018, it briefly experimented with Ethereum NFTs. But Neopet’s fan site JellyNeo estimates that only 1,800 NFTs were sold, leading to meager proceeds of about $14,500 at the time.
After TNT said it had been running Neopets at a loss for more than a decade, it went up $4 million in funding in January from a number of venture capital firms, including notable cryptocurrency firms. The list included Polygon Ventures, Avalanche’s Blizzard Ecosystem Fund, HashKey Capital, IDG Capital, and NetDragon.
That’s what a representative of Neopets said Decrypt that its backers remain “extremely supportive” of the company despite the current shift away from NFTs.
“Our investors believe in the team’s ability to build a brighter future for Neopets,” said the representative. “They are very supportive of our vision for the IP and what we have in the pipeline.”
In the January funding announcement, HashKey Investment Director Xiao Xiao said Neopets had “great potential in its NFT and P2E [play-to-earn] functions’, and that ‘founders like Dominic [Law]’ were able to ‘always execute and deliver’.
But Law told it himself Forbes just a few months later, he believes that “play-to-earn” games resemble Ponzi schemes – and that he prefers a “Web3 gaming” model that deters speculators from manipulating markets by getting into the prime instead focusing on fun gameplay.
Representatives from Ava Labs, IDG and HashKey did not immediately respond Decrypt‘s request for comment. Polygon Ventures declined to comment.
In January, Law said the NFT game will “capture the spirit of the Neopets community.” But now the Neopets team is singing a different tune: that moving one away of NFTs is ultimately best for the community.
Big recoil
Given the comment on the announcement about responding to what the community asked, the Neopets Metaverse game may have been partially canceled due to fan backlash.
An angry Neopets fan who started the #NoNeoNFTs campaign previously told gaming publication Polygon in 2021 that he believed NFT games were “low quality and a scam”. The fan also accused the NFT community as a whole of being “homophobic” and “racist” as reasons why he did not want the Neopets brand to associate with digital assets.
Other publications also criticized Neopets for its decision to release NFTs. The edge called Neopets NFT’s “fracking your childhood memories.” Kotaku argued that Neopets’ NFTs “look like trash”. And Game Rant claimed that Neopets was walking a “damaging path” by releasing NFTs.
While Neopets apologized back in 2021 before the “massive change” brought about by the creation of the Neopets Metaverse game, it continued to build and support its NFT plans – until now.