'Amplify $200B game industry with Web3 financialization'
On this page, the co-founders of Oneness Labs share their insights into the global gaming market and how financialization brought by Web3 can greatly amplify that value.
The Rapid Growth of the Gaming Industry
By 2023, the number of gamers worldwide has reached an astounding 3.831 billion, with the global gaming market generating over $200 billion in revenue, all of which is steadily increasing. These figures not only highlight the vast scale of the traditional gaming market but also showcase its enormous economic value and opportunities.
Background of the Gaming Industry
The gaming industry is not just an entertainment sector; it has become a vital component of the global economy. Games are now part of many people's daily lives, whether on mobile devices, PCs, and consoles. With the continuous emergence of new technologies and the constant enhancement of gaming experiences, the market size of the gaming industry is expanding and deepening. This massive growth also brings new challenges to game companies, though, such as rapidly increasing development and user acquisition costs and the sharp need to explore new ways and new audiences to monetize, as well as continuously deliver richer and more engaging gaming content to achieve greater profitability and user satisfaction.
Characteristics of the Gaming Industry
The gaming industry has several unique characteristics that make it naturally compatible with Web3 technology and financialization:
Lack of Financialization: Despite being a major global industry, gaming has undergone a level of financialization close to zero today. This is due to the lack of valuation mechanisms for the traditional financial markets, such as the Stock Exchange, to understand and measure the performances of game companies, given their unique nature in a 100% digital user-activity-and-transaction economy. However, this digital nature perfectly incorporates the on-chain nature of Web3 financialization, making it possible to unlock the potential to financialize this massive industry.
User Spending Habits: In recent decades, gamers have developed clear spending habits and are willing to spend money to enhance their gaming experience and own digital collectibles. From purchasing skins and characters to acquiring additional content, players' acceptance of virtual goods is already well-embedded. This phenomenon provides a solid foundation for Web3, making users more receptive to new forms of digital currency, payment methods, and investment options.
Deep Emotional Connection and Consensus: The emotional bond between players and games is a significant feature of the gaming industry. Games provide entertainment and build communities among players, enhancing their sense of belonging and identity. This deep emotional connection offers fertile ground for Web3 to fuel community-driven ecosystems with economic value.
Socially Driven: Gaming is inherently a social activity. Players actively interact and trade with one another, whether in multiplayer online games or on social media outside the game. Gaming communities' powerful social attributes align perfectly with the decentralized ethos of Web3 and can also be significantly amplified by financial incentives.
Leveraging Web3 to Address Gaming Industry Challenges
Applying Web3 technology and financialization to the gaming industry can unlock the potential of this giant industry and empower the birth of new monetization models, as well as new relationships among game companies, players, and communities. It also brings significant breakthroughs to Web3 itself, expanding its user base and integrating billions of users and trillions of assets engaging the Web3 ecosystem.
Amplifying the RWA (real-world asset) Value: The financial superiority of cryptocurrencies and the viability of blockchain technology to lower financial barriers have been well-proven in the last decade. Similarly, Web2 games have demonstrated their strength with large player bases and stable, continuous cash flow. Combining the best of both worlds and leveraging the innovative solutions of Web3 financialization will enhance the RWA attributes of gaming, which are their players, revenue, and IP value. It will not only double the size of the gaming industry, but also create endless growth opportunities for game companies, platforms, investors, players, communities, and all stakeholders involved.
Solving Asset Ownership Issues: Web3 technology and financialization can provide players with true digital asset ownership, allowing them to freely transfer and trade these assets and also invest in ownership of the games they play. This ownership-based engagement, compared to the traditional gaming environment, will enhance users' in-game activities and investment activities.
Enhancing Security and Transparency: Blockchain technology's immutability and transparency can significantly reduce fraud risks in in-game transactions, creating a safer gaming environment for players and a transparent environment for evaluating and tracking investment portfolios.
New Economic Models: Using Web3, the gaming industry can create business models integrating in-game and out-of-game features. Game achievements can directly translate into economic benefits, encouraging more user participation and economic value.
Community-Driven Governance: Web3 technology and financialization allow players and investors to participate directly in game development decisions through voting and feedback, enhancing their sense of involvement and belonging, as well as ensuring better access to information and return on investment. Additionally, leveraging game characters and IP through Web3 can build a more vibrant community with a longer lifecycle.
Conclusion
As decentralized financialization and technology continue to develop and integrate with the gaming industry. With its scale and growth, the integration will expand the value chain and attract more capital and users. This will fundamentally change how the game is developed, published, operated, monetized, funded, and profit-distributed. Through deep integration, future games will become important platforms for user experience and economic benefits, truly realizing the upgrade and transformation of digital society and economy.
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