Annual revenues for in-game items have reached $15 billion according to Venturebeat and this makes clear that consumers are continuing to demand digital assets to make their gaming experience more aesthetic or fun.
Statista says there are 3.24 billion gamers in the world so this is a market ripe for expansion, self-evident by the fact many in developing countries are flocking to play-and-earn games for the chance to make money on a par with their daily minimum wage.
In a world where only a minority can afford to spend considerable amounts on microtransactions, NFTs and play-and-earn can revolutionize the paradigm of how we understand gaming and digital asset ownership.
Cryptocurrencies are global in the sense they facilitate seamless transactions across any border. All of a sudden, there is potential for a worldwide community to meet on a platform from the hardcore gamers to the speculative traders and any other type of participant.
Finder’s NFT adoption report at the tail-end of last year shows staggering results: in the US, only 2.8% of internet users owned an NFT but in the Philippines it was 32%, with Thailand, Malaysia and the UAE not far behind.
Rapid expansion in the player base for game developers could result from extensive scholarship programs where those without the capital to acquire an NFT can simply borrow one and enter into a profit-split agreement.
The landscape is changing fast and so far most major gaming companies have been slow to respond. Market forces could well drive them to adapt to the possibilities widespread NFT adoption could bring, namely the ability to acquire a massive user base from around the globe.
An inexorable rise of NFTs in gaming will see the industry shift from a reliance on whales who regularly sink large amounts into in-game items or currencies. Instead, the same amount of profit for the game developer can be distributed across a worldwide community through NFT commissions, marketplace fees or any other small amounts that can be gained from a thriving and active gaming economy.
Huge corporations such as Activision and Epic Games are locked in when it comes to their current business model: any shift in approach would make executives nervous as there already exists a very reliable revenue stream with centralized microtransactions.
But these companies could keep NFT transactions on their platforms and instead shave off small amounts of a digital currency in the trading of digital assets. The future doesn’t have to be completely DeFi, not right away, and the glacial pace such large entities commit to change might mean this is the most plausible, palatable way for them to change gears and go for an NFT-heavy approach.
A true DeFi solution is tricky to make work. But that’s what you get with Crypto Fight Club, in a game which provides ample incentives for users to burn tokens and keep the economy ticking over.
Revolutionizing the gaming sphere and digital asset ownership will not happen overnight. But slowly, the allure of bringing these assets on-chain into a well-substantiated game economy will prove too irresistible for developers to ignore. The change begins with the players, and indeed across the developing world it has already begun in a big way.
Another look at what's going on behind the scenes... with a huge surprise in store at the end of the year.
Join the fun in our huge giveaway series with Koakuma.