Dr. Jeppe R. Stokholm
Why NFT’s in Esports & Gaming is Big Business
Did you know that the global gaming industry is more than twice the combined size of the worldwide film industry and the recorded music industry?
NFT’s in eSports & gaming is big business and here is why.
The global gaming industry is expected to generate more than $219 billion in annual revenue in 2022. With the metaverse it’s estimated that video game content and services will grow at a 15% compound annual growth rate from roughly USD 200 billion in 2021 to more than USD 400 billion by 2026.
At the same time, the global NFT market is expected to reach a value of USD 122.43 billion by 2028, at a CAGR of 34.10% over the forecast period (2022–2028).
Strong growth profile
eSports and gaming have a strong growth profile and are considered as “the next big thing” within investing in social infrastructure. Games are the new social media. The next big movie franchise, theme park or toy line will most likely come from games related to eSports.
There are around 2,8 billion active gamers in the world. As example, more than 500 million people played the game “Among Us” during the pandemic in November 2020. That’s 2.5 times the number of Netflix subscribers, and that’s only the stats for this single game.
Powered by all these active players, gaming is at the forefront of consumer engagement across all sectors. And then there is the audience.
eSports organizers have long called for the growing activity to be added to the Olympics. Those aspirations got a boost when the 2022 Asian Games in Hangzhou, China, decided to name eSports as a full medal event. The eSport tournaments at the Asian Games will begin in September, 2022.
In October 2020, 45 million people turned in online to watch the League of Legends world championship. In comparison, this is about the same number of people that watched the six games of the 2020 NBA Finals on TV.
Why NFT’s in eSports & Gaming?
NFT’s are becoming increasingly popular in eSports to allow players to sell their digital assets or trade them for other items. It can be tickets to eSport games and venues, but it can also be collectibles from these games and venues.
NFT’s can unlock access to VIP spaces, clubs, and channel hosted by eSports teams in the metaverse. They can be a digital tool for membership, rewards and access.
As example, last year the NBA started offering interested users NFTs representing limited-edition ownership of various art and videos of selected league moments. The market for these offerings has increased exponentially, with the total valuation of these collectibles currently estimated to be worth more than $7.5 billion.
What drives the market?
The eSports market is not driven only by supply and demand of digital opportunities, it is also driven by significant investments by key market players:
Content providers are monetising IPR over longer time horizons with new “games-as-a-service” models driving new income streams via micro-payments and in-game sales (no paywall).
Established tech players are entering the scene with strategic investments. Amazon has acquired Twitch, a game-streaming company, and Facebook has launched its own cloud gaming service.
New media channels are facilitating access to a wide range of eSports tournaments and related entertainment. Now content can be viewed and played anytime and anywhere.
Consumers are demanding new entertainment solutions as the world is entering a new digital reality. 5G networks, VR gear and IoT will accelerate the consumer “pull-effect”.
Commercial ecosystems are being created across the space. Any commercial opportunity generated in the physical sports world, can be replicated in the eSports environment with the addition of big data enabling greater targeting and offering customisation to the fans, consumers and participants.
They are the digital keys, that can unlock entertainment in the metaverse or represent a right to use specific content as digital contracts. The use cases in eSports and gaming are unlimited.
That’s why NFT’s in eSports & gaming is big business and an area to follow closely.