How Web3 & NFT creates New Opportunities in Esports & Gaming
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Gaming is amassing more fans than the movies and music industry combined.
In the new realm of Web3, blockchain unlocks a new way to make money from hobbies. People earn cryptos thorough play-to-earn games like Axie Infinity, Gods Unchained and The Sandbox. Gaming enthusiasts participate in the creator economy by monetizing from Twitch livestreams playing Call of Duty & CS:GO.
Let’s unpack the future of Web3 gaming and esports!
Section 1: Key Market Trends
(1) Esports memorabilia is going crypto-driven:
Companies are using blockchain to turn esports moments, players' personalities, and video highlights into NFT collectibles. Fans can buy, sell, and trade these NFT cards, unlock access to limited edition merchandise, participate in a competition and earn rewards.
Ikonic allows esports fans to create highlights, mint into NFTs, and earn from in-game moments.
Kolex cards are a series of streamers, teams, players, and events from esports and gaming
WePlay Collectibles is a platform for buying esports NFT collectibles, including digital and physical memorabilia, rewards related to tournaments, and artwork.
Epics launched hybrid trading cards that consist of physical and digital NFT twins.
(2) APAC, the biggest esports market:
The Asian gaming market made up 57% of the global esports revenue ($1.1 billion). China, Japan, and South Korea have over 1 billion gamers. India is following suit, with 373 million players in 2022. Asia also has the strongest esports viewership growth, up by 21% from 2019 to 2020.
Gaming powerhouse, Tencent has poured money into League of Legends by Riot Games ($400 million), Epic Games ($330 million), Versus Programming Network ($100 million), and Clash of Clan by Supercell (84.3% major shares).
Southeast Asia alone made $4.4 billion in gaming revenue in 2019, at 16% YoY growth rate. Taiwan, Indonesia, Malaysia, Philippines, and Singapore are the major gaming markets. More than 80% of the players are mobile gamers. PUBG Mobile and Mobile Legends: Bang Bang is the most regularly watched esports.
Singapore-based Ampverse is following Axie Infinity’s play-to-earn business model. The company recently raised $12 million in Series A from Falcon Capital.
Thailand-based Infofed offers content management, hosting, and analytics for online esports and tournament events.
Ethlas is a blockchain-based, free-to-play game based in Singapore. Using Ethlas currency, players can buy, trade, attend tournaments, earn cryptos and cash out.
(4) Creator economy of esports:
Gaming live-streamers are making a full-time living from platforms like Twitch and YouTube gaming. In fact, top live-streamers are making millions of dollars. As the creator economy of esports explodes, a new wave of startups is building the “alternative to Twitch” to help creators monetize their streaming content.
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Section 3: Problems & Market Needs
(1) Players aren’t getting compensated:
Game players spend more than 8 hours/week and US$61 Billion each year on virtual goods purchases (e.g. skins, weapons, avatars, characters, etc.). Yet, they don’t own anything they purchased after spending real money.
New platforms exist to democratize access to game monetization for both players and creators through asset creation and blockchain games.
Decentraland allows creators to create and sell NFTs wearables including eyewear, helmet, mask, upper body, lower body, etc.
The Sandbox allows players to own, rent and sell virtual lands for profits.
(🔒 MEMBERS-ONLY) +4 more market problems and how top players fill the gap:
🔑 (2/5) Create new business models for gaming creators (3 company examples)
🔑 (3/5) How to build the future of gaming communities (3 company examples)
🔑 (4/5) Solutions to navigate the complexity in crypto games (3 company examples)
🔑 (5/5) How to create economic opportunities for fans (3 company examples)
Section 4: Next Big Things & Untapped Opportunities
(1) Netflix for gaming:
It costs $600-$3000 for a high-performance PC and $550-$1250 for consoles. Many players invest in hardware for gaming speed. Gaming on-demand or cloud gaming presents massive opportunities to solve gaming speed problems. Users can stream video games from online servers instead of downloading the games on the computer.
New solutions like monthly game subscriptions can be built to cater to specific compatibility, technical performance, and scalability.
Amazon Luna, a cloud gaming service that allows you to play games across Windows PC, Mac, Fire TV, Fire tablets, Chromebook, iPhone, iPad, Android phones, and Samsung Smart TVs.
PlayStationPlus allows users to stream gaming content on PS5, PS4 or Windows PC.
(2) NFT game assets resale economy:
Gamers are already buying and selling in-game skins, weapons, and characters to boost their gameplay and move up their rank faster.
At the moment, it’s easy to find places for trading non-blockchain game items such as CS:GO, DOTA 2, Clash of Clans, and League of Legends. Platforms like PlayerAuctions, G2G, Buy Clash and CS:GO Stash are serving this market.
As blockchain-based gaming is on the rise, there could be new asset marketplaces focusing on trading crypto games assets. DMarket is a great example. The platform has offered an NFT game section to sell Decentraland wearables on top of non-blockchain game items.
Similarly, Fractal is a game asset marketplace focusing on NFT games and play-to-earn games.
(3) Cross-chain games will emerge:
There are more than 10 blockchains on which NFT-based play-to-earn games are built. Right now, these chains are isolated. There is no easy way for players to trade assets on one chain with another without going through a centralized exchange.
The future of Web3 gaming is interoperable, meaning users will be able to traverse digital identities and in-game assets to other users on another blockchain as freely as possible. Therefore, more cross-chain or multi-chain gaming solutions are required to reduce isolation and improve compatibility.
Blockchain Monster Hunt offers a multi-chain metaverse game that connects people from different blockchain communities.
Splinterlands has cross-compatibility with other blockchains such as Ethereum, Tron, and WAX.
Duelist King, a multi-chain trading card game supported by Polygon, Fantom, and Cronos.
Klaymeta is integrating with the BNB Chain ecosystem to connect players in various game worlds.
(🔒 MEMBERS-ONLY) +5 more new market opportunities:
🔑 (4/8)Niche e-commerce platforms you can start (5 company examples)
🔑 (5/8)Niche e-sports games to tap into a wider customer base (6 company examples)
🔑 (6/8) The future of SaaS is “metaverse SaaS” (4 company examples)
🔑 (7/8) Create additional revenue streams for NFT holders (4 company examples)
🔑 (8/8)Metaverse commerce opportunities in gaming (3 company examples)
Section 5: Strategy & Recommendation
(1) Find revenue streams:
Sponsorship. Brands sponsorship made up more than 50% of the esports market's total revenue. Influential brands include: Coca-Cola entered an esports deal with Riot Games; a $100 million esports deal between Intel and ESL; and Red Bull with T1.
Merchandise sales. Most common in league-branded items (ESL Shop) and esports e-commerce. Media brands like ONE Esports has built an authority around trusted sources of esports news and offer branded merchandise for gamers.
NFT & tokens. G2 esports launched @SamuraiArmyNFT, i.e. a lifetime pass to social clubs where gamers can access rewards, discounts, game nights, watch parties, and more.
Platform commissions. Most common in the creator monetization platforms. YouTube takes a 30% revenue cut from Super Chat and channel membership features. Twitch takes 50% of subscription revenue from Tier 1 streamers (made more than $100K in revenue).
(🔒 MEMBERS-ONLY) 4 more action ideas and recommendations:
🔑 (2/5) 6 ways to narrow down target audience in esports/Web3 gaming
🔑 (3/5) 6 ideas to differentiate your Web3 product offerings
🔑 (4/5) 6 no-code tools to use for implementing Web3 gaming elements
🔑 (5/5) 4 types of MVP (minimum viable product) ideas to get started
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