On Tuesday blockchain games developer and investor Animoca Brands announced that it would be ceasing operations of play-to-earn racing and collecting game F1 Delta Time. The company had been unable to renew its license with the Formula 1 motorsport league.
Launched in 2019, the Ethereum-based game allowed its players to buy and trade collectible non-fungible tokens (NFTs) including cars, accessories, and drivers. Ethereum utility token REVV was used as in-game currency to purchase NFTs and buy entry to different game modes.
“It is with deep regret that we announce that F1 Delta Time will cease operations on 16 March 2022,” said Animoca’s motorsport games platform REVV Motorsport on Twitter. “While we have not been able to renew our license, we will ensure that current owners of F1 Delta Time assets are rewarded for their loyalty and support.”
It’s not a matter of the F1 Delta Time NFTs falling in value. We believe the associated content has ceased to exist. The website for F1 Delta Time is already offline. In May 2019, the game’s first NFT “1-1-1” sold for 415.9 Wrapped Ethereum, worth approximately $113,000 at the time. And that valuation was long before the NFT boom.
Impact on NFT license values
The shut down could have broader implications for licensed NFT games. At the commencement of any partnership, IP owners and license holders need to have a mutual plan for what happens when the license ends. If an NFT could cease to exist or won’t have the same utility in the future, its value will be less. That reduces the value of the license. For the NFT holder, the valuation difference is the equivalent of the right to hang a Van Gogh on your wall for a few months versus indefinitely.
Even better would be to articulate any plans to the community before they invest money. One Twitter user described it as a “3rd party IP rug (pull)”. While that may not be the case, the sentiment is understandable.
Animoca has announced plans to give owners of F1 Delta Time NFTs replacement NFTs in its other blockchain-based games within the REVV Motorsport ecosystem. Concerns have also been raised over compensating players for REVV tokens that were spent on unused benefits within the game that can no longer be accessed.
These are not the first F1 blockchain arrangements to disappoint fans. Fan token issuer Bitci allegedly failed to pay some sponsorship dues, and as a result, multiple sports teams ended their partnership. It’s unclear where that leaves McLaren F1 fan token holders who would expect to receive rewards in return for their payment.
Another fan token issuer, Socios, ended up in a dispute with the Argentina Football Association (AFA). It partnered and issued a fan token, and months later, the AFA entered into another fan token deal with Binance. Socios claims it blocked the deal.