Industry Research

the gaming industry has become a $196 billion dollar behemoth that’s now bigger than the global film and north american sports industries combined https //www marketwatch com/story/videogames are a bigger industry than sports and movies combined thanks to the pandemic 11608654990 mobile gaming generated over https //newzoo com/resources/trend reports/newzoo global games market report 2022 free version $100 billion in 2020, making up 52% of all game related revenue garena free fire, a popular battle royale game, had over https //dotesports com/mobile/news/free fire reaches new record number of 100 million daily users in 2020 100 million peak daily active users in 2021 it was the highest grossing mobile game in emerging gaming markets like latin america and southeast asia, while also generating https //media pocketgamer biz/2021/4/109933/top grossing mobile battle royale shooters us q1 2021 r471x jpg $100 million in revenue in the first three months of 2020 in the united states alone this massive growth in mobile gaming can be attributed to the proliferation of affordable smartphones and the rise of the free to play model over 5 3 billion https //investorsking com/2021/09/01/total number of mobile phone users hit nearly 5 3b in july 67 of the worlds population/ mobile phone users will be active in 2024, representing 67% of the world's population most mobile games are free to play, meaning the game's core experience is provided at no charge, and players can choose to spend money on in app purchases to do things like acquire skins and speed up character progression this traditional free to play model employs a closed loop ownership system in which your in game digital assets cannot be resold or traded to other players while this more accessible model has greatly expanded the market’s total addressable audience, it has evolved to become increasingly predatory in nature in order to drive more microtransaction volume as a result, the global online microtransaction market is expected to grow from $76 66 billion in 2023 to $117 95 billion https //www researchandmarkets com/report/online microtransaction in 2027 at a cagr of 11 4% among the 3 24 billion https //playtoday co/blog/stats/gamer demographics/ gamers in the world, a small percentage contribute a significant share of the in game microtransaction revenue in gaming it’s called the whale phenomenon using elements like dynamic pricing and non transparent loot boxes drop rates, has become increasingly common to appeal to affluent players who statistically spend the most a 2023 research & market report https //www researchandmarkets com/report/online microtransaction shows that only 3 5% of gamers spend money in app, but those users are big spenders, spending 30 times more than the average gamer (paying and non paying) with $9 39 vs $0 32 a month per gaming app a new model for creating game economies has emerged from the advances in web3 tech that aims to address this spending disparity and democratize digital worlds in this model, open market dynamics allow game assets to retain value, creating new incentives for players of all types savvy game developers are using web3 tech to empower players to trade their assets, giving them a superior sense of ownership and control addressing inequitable payouts & player salaries events like dota’s the international keep 75% of their crowdfunded prize pools, categorized as costs for running the tournament and creating the additional in game content the 2022 prize pool topped $40 million, thanks to the crowdfunding mechanism which allocated 25% of the proceeds from purchasing of the game’s battle pass to the event’s prize pool such a large prize pool going towards just 1 tournament benefits only top players, ignoring the thousands of semi pro and pro players who were not the top 16 teams in the world we believe esports leagues can become easier to bootstrap through onchain crowdfunding that enables radical transparency through its decentralized nature, enabling all financial transactions to be documented and auditable through using a block explorer this will in turn allow for cheaper operational costs by facilitating automated payouts and achieve a wider distribution of payments to more players overall addressing player salaries in most traditional sports, player salaries are public with that information, players can construct their own worth when negotiating and deciding which organization to sign multi year agreements with for players who are part of a larger org, their prize money is first sent from the game developer to their team’s owner the entire payment processing time from game dev to org to player can then take weeks or months to complete for larger leagues where there can be an extensive web of different types of payments, it’s especially crucial to be able to properly and transparently manage league funds as seen in the past with examples of centralized leagues like the h1z1 league, it was alleged that significant amounts of league funds were spent on lavish parties with content creators the league did not progress to a second split and ultimately shut down, failing to pay organizations promised money from the full contract rise & fall of play2earn as the mainstream use cases in the web3 industry accelerated in the post covid world, a phenomenon in web3 gaming called ‘play2earn’ gained popularity that saw millions of gamers earning supplemental income while playing web3 games in theory, the enhanced ownership, liquidity, and tracking capabilities of blockchain gaming tech is intended to empower the player however, the first iteration of this model came with many flaws, focusing predominantly on the financial aspects while lacking the high quality gameplay experiences that are needed to sustain a game’s community and economy for the long term in its purest form, the p2e philosophy aimed to put players' digital property rights at the center of the game's economy these enhanced ownership features and open game economics have gained traction amongst gamers in emerging economies where the rewards, in some cases, have been significant summarizing the good and bad that came from the previous cycle of web3 gaming the good players experienced enhanced ownership of their digital assets, allowing for more autonomy with how they trade and spend them game assets demonstrated provable scarcity and provenance by being programmatic in nature the ability to participate in a digital economy with goods and services that have real world value and utility provided the gaming industry with a foundational base of knowledge of how digital economies can enhance ownership of assets and create unique fundraising mechanisms for independent game development the bad “playing” felt more like a task than a game due to the lack of quality gameplay barrier to entry was too high for most players, both financially and ux wise some games focused on extracting value from communities rather than creating a long term sustainable economy tokenomics designs were fundamentally flawed this is proven by the fact we haven’t seen a hit game at scale (1m+ daus) the challenges faced by playing a web3 game are still higher than those of web2 games that comparatively are “ready to play” and require no prior knowledge of complementary technologies such as a wallet in web3 games the future of onchain gaming in reflecting on the lessons from the early challenges in web3 gaming, we are poised to move forward into a new era with a refined approach here are three fundamental principles that the open economy philosophy of onchain gaming upholds 1\) digital property rights players own and control their in game digital which make them freely tradable with others player accounts, hard earned achievements, and the associated in game assets cannot fully be stripped away from their wallets, and they may even accrue value over time web3 gaming business models are focused on creating user centric ecosystems where players have digital property rights and can build experiences on top of the game’s foundation we finally have the opportunity to empower the player 2\) open game economies game developers foster an open ecosystem where item supplies and most commerce transactions are fully transparent composability https //learn bybit com/blockchain/what is composability crypto/ refers to the ability to combine existing blockchain components in multiple ways and create something new if a blockchain is composable, developers who work with it can easily design things like decentralized apps and cross chain protocols the ethos of composability means communities are encouraged to build additional tools on top of the game’s base experience that provide value to the overall community 3\) productive leisure time most importantly, these games must be inherently fun web3 enabled games that are both enjoyable and have sustainables economies open up a new category of productive leisure time players can opt in to monetize their time spent gaming, transcending what it means to ‘play’ and offering universal earnings opportunities market opportunity global esports market in 2022, the global esports audience will grow +8 7% year on year to reach 532 million https //newzoo com/resources/trend reports/newzoo global esports live streaming market report 2022 free version esports enthusiasts, those who watch esports content more than once a month, will account for over 261 million https //newzoo com/resources/trend reports/newzoo global esports live streaming market report 2022 free version globally according to a bain & company report https //www bain com/insights/level up the future of video games is bright/ , it’s expected that the global gaming market will grow to a $307 billion market in the next 5 years blockchain gaming was a $4 82 billion market in 2022 https //www grandviewresearch com/industry analysis/blockchain gaming market report and, according to a report from bitkraft, is poised to grow to a $50 billion market by 2025 https //www bitkraft vc/gaming industry market size/ another report by research & markets estimates the industry growing to $65 7 billion by 2027 https //www researchandmarkets com/report/blockchain gaming# text=the%20global%20blockchain%20gaming%20market,rising%20funding%20for%20blockchain%20games the global market for gambling estimated at $773 7 billion https //www globenewswire com/en/news release/2024/04/09/2860160/28124/en/global gambling market to reach 1 trillion by 2030 new table games expand the consumer base at casinos html in the year 2023, is projected to reach$1 trillion by 2030 look at the us specifically, americans wagered a record $119 84 billion https //www spglobal com/marketintelligence/en/news insights/latest news headlines/american gaming association legal sports betting hits record revenue in 2023 80522087# text=adopting%20the%20practice ,americans%20wagered%20a%20record%20%24119 84%20billion%20on%20sports%20betting%20in,jump%20from%20the%20prior%20year on sports betting in 2023, up 27 5% from 2022 those bets translated into $10 92 billion in revenue in 2023, a 44 5% jump from the prior year this figure was tied to a 9 1% national hold percentage (settlement fee) that the sportsbook/bookmakers takes digital asset sales and streaming are the two fastest growing revenue streams for competitive gaming, with 2020 2025 cagrs of +27 2% and +24 8% https //newzoo com/resources/trend reports/newzoo global esports live streaming market report 2022 free version , respectively growing awareness around digital assets and nfts has boosted investment in gaming to $4 49 billion in 2022 https //cryptoslate com/web3 startups raised 7b funding in 2022 with gaming accounting for 62/ and accounts for 62 5% of all investment into web3 startups forkast prediction market docid\ mo5r7as69y3z7fpbtkxyw quests & payments docid\ duwrlx6ycsdq7 ykhph9m gamerid docid\ uuivybs3rmsdgqe6zo2f0 market opportunity docid\ m218kh8mmn3pcxn ogbv leadership team docid\ hyqhibtdkzadvwbd5wsqz cgx token overview docid\ d5ukwzua61adsckgzbbnz