Axie Infinity has shown that the gaming industry is only a small part of what blockchain-based gaming can achieve and will explode in the near future.
Everyone knows that the gaming industry is on the verge of absolute growth, one of the industries that have benefited greatly from the Covid-19 pandemic.
However, the following growth metrics may not be known to the average investor:
Sales in the global games market | Source: Bloomberg, Pelham Smithers, GamingScan.com
US esports viewers | Source: MBA @ Syracuse
The main reason is likely to be in technological development and the exponential growth rate. Technology continues to transform the way we communicate, meet, create and consume information, deliver value, and form online communities.
Howard Shultz, former CEO of Starbucks, popularized the idea of a “third physical room” with his coffee shop concept. He believes people need a “third room” to meet outside of the office and at home. Starbucks is the answer.
Today we see that this concept is popular with the younger generation. Apart from the fact that the new shared space is the digital space and is called the metaverse. Here children want to meet friends, listen to music or play games. This could be seen as the next iteration of digital communities: the AOL chat room, then Myspace, Facebook, and finally the Metaverse.
Now we have the concerts in the Metaverse. Burning Man has been digitized. And we’re just getting started.
The first video games were born in the late 1950s – a simple tennis game similar to pong (table tennis themed). Then Atari was invented in 1977. Nintendo started releasing popular games with Mario Bros, The Legend of Zelda, Donkey Kong, etc. in the early 80’s.
It’s important to note that the business model has changed dramatically over the years. We used to pay $ 60 for a game like GameStop. It’s a one-time fee with unlimited games. The game was released in a similar way to how Hollywood movies are advertised and released, with 90% of the revenue coming in the first two weeks.
This freemium model (which offers customers both a free service and a paid service) is now live. Users can play for free and are encouraged to make in-game purchases to upgrade skills, buy avatar skins, buy weapons, upgrade animations, etc. and can be found on Roblox, Fortnite, and other popular games.
This is a more profitable model for manufacturers as it keeps users busy and constantly updated to compete with their friends. We’re moving into a world where social cues occur among the younger generations in the metaverse through the avatars in the game, the weapons they use, and the skin color they possess. Welcome in the future.
Today games are provided in closed data networks. This means that users cannot own their in-game content (skin color, avatar, skills, etc.). The platform owns them. Axie Infinity disrupts this model because users own their assets, like NFTs on Axie, and can sell them for a profit in the free market / gaming economy. Here’s a look at the revenue Axie Infinity users have made since May of this year:
Entire Axie Infinity | Source: Token Terminal
Annual revenue per token terminal is up to $ 2.7 billion for open and permissionless blockchain games. Important note: Blockchain technology is the medium through which users can own their in-game assets. This is not possible with the technology used today.
The gaming economy is the future and everything happens on the blockchain.
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