NFT Gaming: A $3 Trillion industry that hasn't started yet
NFT Gaming: A $3 Trillion industry that hasn't started yet
by Josh Bobrowsky Edition 13
“The Infinite Game is still going and there is still much work to be done.” - Simon Sinek
*Mobile games alone generated $170 Billion in revenue just last year (2021)1
*The entire history of all NFT sales on ETH is $30 Billion and all NFT sales combined is under $50 Billion2
How gaming market grows 1,500%
In 1 year mobile games alone generated 300% the revenue of every NFT ever sold. But this is just the tip of the iceberg. I believe when done correctly NFT gaming will create a 15x or greater in the total addressable market in the gaming industry.
The math is fairly simple when you factor in human psychology and economics. People are willing to spend substantially more money on things that they can re-sell for a profit (or small loss) than things that are a full sunk cost.
Example:
If I buy a power up item in a SuperCell game like Clash of Clans and I spend $500 on it that money is gone. In exchange for the $500 I get to enjoy 100 hours of gameplay and to be honest by spending it I might even feel a bit silly to tell a friend about the money I “wasted” on a “silly game.”
Contrast this with me spending $500 on an NFT game where I was able to enjoy playing the game and when I was finished I sell my NFT for $600 (because I invested 100 hours into gameplay to enhance my power-up for resale).
This is not designed to be a play to earn ecosystem, but rather realizing that ownership of digital assets doesn’t need to be ephemeral or a sunk cost.
Assets vs Expenses
When gaming items start to hold value, their value increases. This sounds insanely simple but its a concept most people miss.
I would rather spend $5,000 on an in game item I can resell in a year for $5,000 than $500 on the same item with no ability to resell.
No one brags about spending $500 on in game items, most people are embarrassed. Contrast this with the pride someone has when they make a profit on an in game item.
2 Scenerios
Scenario 1 = Shame for wasting money on a game
Scenario 2 = Pride in earning a positive ROI
People share their victories when they are proud. This is the start of how NFT gaming begins to go viral… Its when people are profitable, in the same way Bored Ape Yacht Club go loud, NFT gaming will reach new levels.
Gaming that actually matters
If you are good at a game it might feel good, but being in the top 1% of gamers has little to no financial upside (except esports or streaming gamers which represent far less than 1%).
But once gaming has financial rewards that extend into the real world, we will find in-game economies that will have real value in and outside the game.
At this point people will start earning livings by creating in game items or services.
Once people no longer need to leave the game to earn a living the flywheel or network effects of the game get even greater.
There will be high stakes wagers made on the outcome of everything from battles to street races.
Skin in the game
Once real money is at stake games will get more serious, the market expands and I would be nearly certain that the top game or two will have a GDP greater than many countries around the world.
This is where things get really interesting, literally. When money is on the line people pay more attention to everything, and the dopamine hits harder as well.
This is also likely to create higher levels of satisfaction with gaming, as now that new NFT you just won for taking first place in that race will be enough money to take your family on vacation next week.
What is next
What is next is likely the fiercest competition for a large gaming ecosystem that will likely be referred to as the Metaverse. Many large brands will spend billions of dollars to unsuccessfully flop and a few dominate players will build fortunes beyond most of our wildest dreams.
Are you ready Player One?
Cheers
Josh Bobrowsky
https://www.gamespot.com/articles/116-billion-was-spent-on-mobile-games-in-2021/1100-6499568/#:~:text=As%20the%20State%20of%20Mobile,increase%20of%2019%25%20since%202020.
CryptoSlam.io is the source