Blockchain and Free-to-play Games to Drive Gaming Market Growth Worth $90 Billion
The integration of blockchain technology into the gaming market and the emergence of new blockchain based games, as well as free-to-play gaming models, is set to drive massive industry growth over the next five years.
A Technavio research report on the potential of the global gaming market between 2019 and 2023 has collated some very promising statistics for the industry.
Statistics already available put the value of the games market at $70 billion in 2012, $106 billion by 2016, and over $150 billion for 2019. Technavio believes the year-over-year growth rate for 2019 to be nearly 10% and that incremental gaming industry revenue growth will be a whopping $90.13 billion between 2019 and 2023.
37% of gaming market growth to come from Asia
The technology research company also says that 37% of the gaming market’s growth will come from the Asia Pacific (APAC) region. Much of Asia is a mobile-first market, as per Newzoo, over two-thirds of gaming revenue comes from mobile gaming in Southeast Asia (SEA). Only 48% of the area’s population has smartphones but this number is rapidly increasing driving further mobile gaming growth.
In 2019, SEA is only 3.1% of the global games market but the rate of growth between 2018 and 2019 was 22%, further indicating the potential for the region. The gaming market as a whole in the Greater South East Asia (GSEA) area is expected to rise from $4.6 billion in 2019 to $7.5 billion in 2022. And, the yearly value of the mobile gaming segment across the whole of Asia is expected to be $12 billion.
A recent IQPC publication points to growing ownership of smartphones as well as 5G technologies and the use of cloud gaming services like Google Stadia and Apple Arcade to be instrumental in the region’s mobile gaming market growth.
Blockchain offers new opportunities for monetization and for player engagement and reward
Technavio believes that increased integration of blockchain technologies into gaming and more free-to-play, or freemium, games will positively impact the entire global gaming market in the next few years. It says:
“Vendors in the market are integrating blockchain technology in their gaming solutions to offer a secure transaction platform for their users.”
And, blockchain “enables players to trade in-game virtual assets with other competing players and peers.” Technavio adds:
“Blockchain also provides a decentralized asset exchange and enables game service providers and developers to effectively monetize their services.”
Blockchain allows in-game assets to be tokenized and these non-fungible tokens (NFTs) can be ported outside of games, collected, traded, and sold.
Animoca Brands is launching a Formula 1 licensed racing game, F1 Delta Time. Though the racing game won’t be available until next year it’s auctioning a set of Formula 1 branded race cars. These vehicles are NFTs and blockchain game collectibles much like CryptoKitties, with their own identity and evidence of ownership. The F1 Delta time game car collectibles have an auction starting price of $4,400 each.
One of the world’s top ten game publishers, Ubisoft, just demonstrated serious commitment to blockchain technology in gaming by getting directly involved in the technology and governance of new blockchain-based gaming platform Ultra.
Blockchain technologies offer new features and security for gaming microtransactions, prevalent in free-to-play models. Technavio says these freemium models, where a game can be played for free but further content or game items can be bought, help game publishers “convert many free users into paid users.” A trend expected to drive revenue and boost gaming market growth in the near future period.
Esports is also a significant and fast-growing part of the global gaming market. The sector has a $1 billion valuation for 2019, an increase of 26% year-on-year. The esports market is expected to reach a value of $3 billion by 2020 according to Goldman Sachs.