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Shrapnel’s U.S. Launch Hits Regulatory Wall: A Sign of Gaming’s Uncertain Future in America?

The highly anticipated AAA first-person extraction shooter Shrapnel has hit a snag ahead of its U.S. launch. Shrapnel will limit its American players’ ability to cash out their in-game earnings to dodge potential conflicts with U.S. securities regulators. In contrast, players in Europe and Asia will enjoy an unrestricted experience, according to Francis Brankin, Shrapnel’s Head of Economy.

Significantly, U.S. players can engage in all other gaming activities; they can’t convert their in-game assets into real-world currency. “That’s what makes it a security to the U.S. player,” Brankin explained. However, the Shrapnel team remains hopeful this will be a temporary issue, aiming to enable U.S.-based players to cash out eventually.

Set in a dystopian Earth 2038, Shrapnel offers a unique gaming experience where players scavenge for loot while dodging enemies. Moreover, the game allows players to build open economies and hold intellectual property rights over in-game assets. Francis Brankin cited the success of platforms like Roblox and Minecraft as examples of how user-generated content could be significant.

The game, slated for an early-access release in December, runs on the Avalanche blockchain. According to Brankin, the decision to use Avalanche was due to its scalability. Currently, Shrapnel can process 2 million transactions per hour, a figure that could expand with Avalanche’s capabilities. Besides, after its initial paid launch, the game will transition to a free-to-play model.

Interestingly, this U.S. limitation isn’t isolated but could be part of a broader issue. According to Sandbox’s co-founder, the gaming and metaverse sectors are flourishing in Asia—particularly in Hong Kong, South Korea, and Japan—but face stagnation in the U.S.

Consequently, the decision to limit Shrapnel’s features for U.S. players could indicate a larger trend: the regulatory environment in the U.S. becoming a roadblock for blockchain-based games. It raises the question: Is the American market becoming a less hospitable place for the innovation and growth seen in blockchain gaming?

Shrapnel’s U.S. launch is a cautionary tale for game developers eyeing the American market. While Shrapnel may resolve its cash-out issues for U.S. players, the episode draws attention to the challenges and uncertainties the American regulatory landscape poses for the rapidly evolving blockchain gaming industry.


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