NFTs Market Size Research: The gaming market will grow more than $180 billion in 2021
The blockchain ecosystem is growing at a fast pace, impacting more and more people every day. While the technology is mostly used in cryptocurrency networks, it also allows for innovative solutions in a wide range of industries.
But did you know that blockchain technology is changing the gaming industry as well?
The gaming industry today
Today, the vast majority of online games follow a centralized model. This means that all related data is stored on a server that is fully controlled by the game administrators.
Typically, the data includes account information and the server history — which records and stores all events and in-game assets collected by the players (such as collectibles, items, and virtual money).
As the database is owned by a single company, players don’t have real ownership of their accounts and items. Also, centralized servers present many limitations and vulnerabilities, which may include:
- Server malfunction due to technical issues
- System infiltration by hackers
- Game shut down
- Undeserved ban of accounts
- Lack of transparency regarding game mechanics and rates
- Manipulation of the game economy by developers and administrators
- In other words, the power is in the hands of the games companies. But fortunately, blockchain technology is able to eliminate or mitigate most of these problems.
Blockchain Game Categories
How may blockchain impact the gaming world?
This section introduces some of the most common ways in which blockchain technology may impact the gaming industry.
As mentioned, blockchain-based games allow players to have permanent ownership and full control over their in-game assets. Typically, each asset is represented by a unique, non-fungible token (NFT), such as the ERC-721 tokens.
The assets may include in-game cards, skins, equipment, and characters. But regardless of the asset type, they can all be linked to blockchain tokens, which are maintained by a distributed network.
Gaming companies have the power to manipulate the drop rate and the economy of their games. They can also lock or bind in-game items, making them untradable.
In contrast, games built on top of blockchain networks enable the creation of decentralized marketplaces. This removes the need for trust between players, while also providing censorship resistance. All players are able to freely buy, sell, and trade their in-game assets on a peer-to-peer basis.
Blockchain and smart contracts have the power to reduce fees and speed up financial transactions. They can facilitate all sorts of payments, not only for trades between players (peer-to-peer) but also between players and developers.
By linking in-game data and items to blockchain tokens, gamers are able to trade assets between different games. This may allow players to recycle their digital assets while experimenting with different games.
Since gaming items are represented using digital tokens, players can trade these tokens on other gaming markets, hosted on the same blockchain.
Fair playing ground
Depending on the implementation, blockchain enables the creation of open-source, distributed, and transparent gaming servers. In such cases, the gaming mechanics can only be changed if the majority of the network vote in favor of it.
In addition, the distributed nature of blockchains prevents hackers and cheaters from disrupting the game because there is no single point of failure.
When a game exists on a centralized server, the developers can abandon the project or shut the game down anytime. With blockchain, players can continue playing a game even if the developers move away. As long as the blockchain network keeps running, the game remains alive. In some cases, new developers take over to continue improving the project.
Proof without words
Asia has proven to be a potential market for online games, most notably the Asia Pacific region, according to analytical data, research experts say the Asia Pacific market. accounting for 52% of the pie market Game Online
The growth of this market is not only about revenue, but also the age and the number of people playing games on the rise.
The global games market reached $138 billion in 2018 and is expected to grow more than $180 billion in 2021. According to the market researcher Newzoo, last year’s numbers represented a growth of 13% compared to 2017.
Only three years ago, the revenue was at $93 billion. This exponential growth of the industry is a reflection of the constant growth of platforms, with mobile games representing 51% of 2018’s market. It is followed by the second-largest segment, console gaming, generating $34.6 billion, with PC games right behind bringing in $32.9 billion.
The progressive attitude of the gaming industry towards new technologies has led to the integration of blockchain into the world of games. Driven by high levels of consumption and the community’s engagement, blockchain technology can be seen as the next logical step. In 2017, the blockchain market generated $340 million and is expected to generate $2.3 billion by 2021.
The esports market has also grown really strong. In 2020, the global eSports market was valued at just over 495 million U.S. dollars. According to the source’s estimates, global eSports market revenue will reach almost 646 billion U.S. dollars in 2023. The eSports industry is expected to grow rapidly in the coming years.
So how about NFTs Market Size?
Unlike DeFi, where user interest and demand are driven by the practical applications and the promise of returns, the NFT market is driven by deep psychological patterns. As the world becomes more and more digital, many objects emerge as digital-native only, and the solution to the ownership question is already here in the form of NFTs.
With a major milestone about to be reached in total all-time volume, non-fungible tokens (NFTs) have the potential to become a trillion-dollar market one day.
NFT is at the verge of hitting a major milestone — USD 100 million NFTs sold (you can check it here), noted Ryan Sean Adams, founder of crypto investment company Mythos Capital and creator of the Bankless program.
We live in “the earliest of early days,” said Adams in a recent Bankless post.
“NFTs will be a trillion-dollar market someday. That means USD 999.9 billion in future opportunity. We’re just .01% of the way in,” he added.
We’ve learned about NFTs across gaming, art, culture, collectibles, and domains. But we’ve never zoomed out to look at the market as a whole.
What are the categories? Collectibles, Gaming, Worlds, Art, Culture
Which categories are winning? Volumes, Value, Projects
Andrew is one of my favorite pioneers and investors to help us with this. Today he’s sharing a breakdown of the first $100m NFTs. There’s likely billion dollar opportunities in each of these categories.
Assets to own. Startups to start. Worlds to build.
According to a recent year-end report by NonFungible.com, the leading data provider for the NFT industry, the total market capitalization of all NFTs stood at roughly $210 million in 2019. The report suggests this number could grow by as much as 50% in 2020 to $315 million. By 2021, it is predicted that the NFTs market will reach $710 million.
Non-fungible tokens join the yield farming hype
Non-fungible tokens are now being used by yield farmers looking for new ways to leverage digital assets through available DeFi and exchange protocols.
Yield farming is nothing more than putting cryptocurrency assets into use by earning a return on the capital invested. There are numerous money markets. Such as Compound, Curve, and Aave, and these provide the most straightforward road to earning a yield.
The term is widely used within the DeFi ecosystem but now the first mentions are occurring within the non-fungible token sector as collectibles meet DeFi.
The Future of NFTs
It is clear that blockchain technology has great potential in the gaming industry. It provides significant improvements for gamers and developers, especially in regard to decentralization, transparency, and interoperability.
As a spin-off from the commonly known collectibles in the real world, NFTs can be a gateway means to bring millions of new users to the world of crypto and blockchain technology. Players in gaming economies can become potential new blockchain users as collectible in-game items are turned into NFTs. In addition to the virtual world of gaming, real-world assets such as real estate and artworks can also be tokenized and traded on the blockchain. NFTs are likely to offer the much-needed liquidity to these markets and bring in previously untapped revenue streams.
While the market size of NFTs is still quite small as the secondary trading volume is at 2–3 million USD, the technology used in NFTs is expected to bring about new changes to not only the collectibles industry, but also the blockchain world in upcoming years. Until then, NFTs will undergo many drastic improvements in infrastructure and user interface in order to penetrate better into mainstream markets for curious new users of blockchain.
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