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Text / Li Yiqi
Source: Deep Echo (ID: deep-echo)
The digital collection industry is making waves again today.
One of the largest digital collection platforms in China, Tencent Magic Core, issued a statement today: Based on the company’s core strategy, it will make business adjustments and stop the issuance of digital collections from now on. Users can choose to continue holding digital collections or initiate refund application.
This is the first time that Magic Core has issued an official statement since news of business changes came out in late July. The announcement is not long, but from it, you can get a glimpse of the answers to the two questions that the outside world is most concerned about: what is the aftermath plan for users? What are the considerations behind the phantom core adjustment?
Phantom Core’s Decent
Before the announcement of the adjustment of the magic core, there have been many controversies in the domestic digital collection industry.
Some digital collection platforms have been shut down or even closed down, and the aftermath plan has also been criticized by users. For example, some companies cancel their registration within a month, and some companies directly issue an announcement saying that the company “has no money to refund.” On the Black Cat Complaint Platform, you can see the anger and questioning of a large number of users of digital collections. Some people try to withdraw the money but they still fail to get it, and some people can’t even withdraw the money. Many people lose thousands or even tens of thousands of dollars.
In addition, there is public opinion in the outside world, “Even the largest digital collection platform in China cannot guarantee that the digital collections purchased by users will not disappear suddenly. Those users who purchase domestic digital collections suddenly find that the digital collections they bought will not disappear from the beginning. It doesn’t belong to you in the end.”
Therefore, when the news of the adjustment of the Magic Core business first came out last month, what many users were most concerned about was where their digital collections go? Can I get a refund? Will the loss of ownership of the digital collection be accompanied by financial loss?
The announcement of Magic Core on August 16 provides multiple flexible options, which not only dispels the concerns of Magic Core users, but can also be regarded as a powerful response to the above-mentioned public opinion.
For users who still want to keep digital collections, Magic Core emphasized in the announcement that operations such as query, display, download, and sharing can still be continued through the Magic Core APP. These assets will not have any changes due to the adjustment of the Magic Core platform, because all digital collection data has been on the chain, and its ownership will always belong to the user, and there is no problem of closing and suddenly disappearing. For users who purchase digital collections for the purpose of collection and appreciation, this option protects and respects their data attribution.
For users who do not want to continue to keep digital collections, Magic Core has also opened a refund channel: After Android users initiate a refund, it is expected to complete the review within 7 working days and return the corresponding funds to the payment account; Due to the store’s refund process and rules, the refund time will be longer. According to industry insiders who understand the application channel rules, this refund arrangement should be accelerated by Tencent, otherwise it may take longer to process according to the regular process. For those buyers who buy digital collections for the purpose of “appreciating the value of money”, the hope of “getting rich overnight” is shattered, but they can finally save their money.
It can be said that Tencent’s adjustment plan for Magic Core fully respects the user’s right to data ownership and choice, and achieves the transfer of interests to the user to the greatest extent, which makes people have to say “decent”.
Phantom’s Restraint
For a project that has only been online for one year, the adjustment of the magic core is somewhat beyond market expectations.
Magic Core had a pretty good start, backed by well-known manufacturers, and gained a lot of market attention as soon as it went online. Since its launch, Magic Core has jointly released digital collections with a number of well-known IPs, including the character dialogue program “Thirteen Invitations”, the super-popular Chinese comic “Inhuman”, art celebrities Zhang Daqian and Qi Baishi, etc. Baozhai, Shenyang Palace Museum and many other well-known institutions; many projects also involve 3D modeling, AR gameplay, digital twin and other technologies, with exquisite production quality. Judging from the phenomenon that many digital collections are “lighted in seconds” when they go online, Magic Core is quite influential in the industry.
So, the development of the magic core is good, why did Tencent adjust it out of the consideration of “focusing on the core strategy”? Looking back at the “restraint” style of Magic Core’s consistent compliance-first approach, it may be possible to answer the reasons behind it.
Shortly after the launch of Magic Core, the name of NFT in the product was renamed “digital collection”, restricting the transaction and circulation on the platform, emphasizing its collection attribute, and emphasizing the business logic of its digital collection and the inherent nature of overseas unregulated NFT business Logic and extension are completely different. More importantly, Magic Core is a rare platform in the industry that does not open any transfer channels, and has always insisted on platform management in accordance with national regulations. The digital collection business on the Magic Nucleus platform adopts the full-process real-name review of users and full-link review of content, and does not open the transfer of digital collections between users, and resolutely resists violations of laws and regulations related to virtual currency.
This is why Magic Core is recognized as one of the more professional and standardized platforms in terms of full-chain operations such as the underlying technology, product design, legal compliance, and market operations.
Although Magic Core maintains a restrained development strategy, the key issue is that digital collections are an emerging field after all, and NFT is also a controversial industry with various risks and uncertainties.
On the one hand, the domestic digital collection industry still has the risk of tokenization. Although many domestic enterprises choose to issue digital collections on the alliance chain in order to distinguish them from foreign NFTs, many domestic digital collection platforms still use public chains.
On the other hand, the country’s regulation on virtual currency is becoming stricter. After the state promulgated a series of policies to rectify virtual currency mining, prevent and deal with the risks of virtual currency trading speculation, in April this year, the China Internet Finance Association, China Banking Association, and China Securities Association jointly issued “On Preventing NFT-related Financial Services” Risk Initiative”, which stated that it is necessary to resolutely curb the tendency of NFT financialization and securitization, and strictly prevent the risks of illegal financial activities. However, there are still a certain proportion of digital collection platforms in China that have opened up secondary market transactions and achieved liquidity by linking with OTC platforms with good liquidity. This is likely to lead to the risk of financial activities with high uncertainty, and the entire digital collection industry will also be affected.
It can be seen that, whether it is industry risk or regulatory risk, the development of digital collections is facing greater uncertainty. For Tencent, which is “seeking stability first” at this stage, taking the initiative to list risky businesses as non-strategic businesses and resolutely abandoning them, and focusing more pragmatically and restrained on its own core business is also a choice made in accordance with the development trend of the industry.
Of course, Tencent’s adjustment to the magic core does not mean that Tencent is not optimistic about the application of blockchain technology or the prospect of the metaverse. According to sources close to Tencent, although Tencent’s focus on digital collections and related technical applications is no longer on To C business, it will continue to explore the underlying and To B applications of blockchain technology.
It is a strategic choice for Tencent to give up the magic core for stability. Sometimes choosing not to do something better reflects its strategic considerations.
For the entire digital collection industry, the departure of a core player will undoubtedly bring a certain blow, and even usher in a major reshuffle. After washing away the foam, the whole industry may return to rationality and return to the discussion of artistic value and connotation.
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