It’s a $220 billion industry…

Every day millions of people around the world immerse themselves in virtual gaming worlds.

And they spend billions on in-game items and experiences:

A football player for their favourite team… a magic sword for their fantasy adventure… a house for their virtual world…

According to SuperData Research, the gaming industry now makes more money than the film and music industry combined.

The potential for innovation and disruption in gaming is enormous.

And I believe THE most exciting developments on the horizon will be the integration of crypto into gaming.

Today I want to take a look at the size of the gaming market and the potential of crypto to turn things upside down.

Let’s start with the size of this market. It’s vast, both in user numbers and the amount spent on in-game content.

To put things in perspective, let’s look at the wildly popular game Fortnite.

Since its release in 2017, Fortnite has attracted over 350 million registered users.

Millions of these players log in daily to compete in virtual battles.

And this massive user base has translated into enormous revenues for the game’s developer, Epic Games…

They’ve reportedly made over $9 billion in revenue from Fortnite in its first two years alone.

But despite the vast sums of money spent on in-game content there’s a problem.

Players often do not truly own the digital assets they purchase

The items they buy typically remain locked within the game’s ecosystem.

That’s because these games, and the content users can buy within them, are created and ring-fenced by the companies that built them.

In the real world if you buy a cup in a shop you can still use that cup at home.

But if you buy a virtual cup in the virtual world, the chances are that you can’t use it anywhere else.

If you’re not into gaming this might not seem like a big deal.

But if you’re one of the hundreds of millions of gamers who spend their hard earned pounds and dollars in these virtual worlds, it’s a major problem.

They invest real money and real time in these experiences and in buying this content, only to have the rug pulled.

Players can’t use the items they buy in other games, nor can they sell or trade them in most cases.

Why crypto offers the solution

Crypto makes digital asset ownership easy.

By integrating crypto into gaming ecosystems, developers can create more transparent and decentralised in-game economies.

(Don’t worry, I’ll unpack what I mean by that).

It means players could truly own the assets they purchase or earn.

Using crypto technology, those in-game items – such as your magic sword or virtual home – can be represented as something called non-fungible tokens (or NFTs, which you may have heard of).

These NFTs are unique digital assets that can be bought, sold, and traded outside the game’s ecosystem.

This would allow players to enjoy true ownership of their digital assets.

They could transfer them between games, sell them on decentralised marketplaces and more…

In fact – and this is where things get really out there – they could potentially use them as collateral for loans in the growing world of decentralised finance (DeFi).

It also paves the way for a raft of innovative revenue models and monetisation strategies…

4 ways crypto could disrupt the $220 billion gaming industry

1. True ownership

We’ve covered the issue of ownership but to summarise, using this technology gamers would truly own the assets they bought during game play.
They could transfer their high scores, they could buy, sell and swap items they owned. They could even port items across (in value terms) to the real world. There are VAST applications here.

2. Valuable in game currencies

Developers could create in-game currencies that are tied to real-world value, allowing players to earn income from their in-game activities or investments.

This could lead to entirely new forms of gameplay, where players can participate in virtual economies that have tangible value outside the game.

3. Exponentially better security and transparency

Beyond ownership and monetisation, the integration of crypto in gaming could also lead to some fantastic ‘under the hood’ advances in security.
Crypto technology can provide a transparent and tamper-proof record of in-game transactions and ownership.

It could help combat issues such as fraud, hacking, and account theft. This are issues which have plagued the gaming industry for years. Crypto could help solve them.

4. Thriving digital communities, hubs and tribes

Last but not least there’s the harness of the community aspect of gaming.

The use of crypto could enable new forms of social interaction and cooperation within games.

Decentralised Autonomous Organisations (known as DAOs), for example, are organisations governed by smart contracts on the blockchain.

They allow members to vote on decisions and allocate resources collectively.

These DAOs could be integrated into games, allowing players to form self-governing communities, guilds, or teams that can make decisions and allocate resources collectively.

Imagine the new possibilities for collaboration and social dynamics within virtual worlds.

What does this mean for us as crypto investors?

It’s good news.

This part of the crypto landscape is ripe for an explosion in development and adoption.

And as the gaming industry continues to boom, it is likely that more and more developers will integrate crypto into their games.

It offers new opportunities for players to engage with virtual worlds and benefit from in-game activities.

In turn, this could help drive further mainstream adoption of crypto and blockchain technology, as millions of gamers worldwide become familiar with and excited by the possibilities these technologies offer.

All of this is great news for crypto holders who are exposed to the right assets.

As ever, that’s the kind of thing we closely monitor in the Academy.

If you’re not a member yet you can get a risk-free trial here.

The Key Takeaway

The integration of crypto in gaming is a thrilling prospect.

It could also be a MAJOR catalyst for crypto adoption…

The gaming world already has a user base of hundreds of millions of users. These are tech savvy individuals who embrace digital innovation… and they have problems they want solving.

By addressing current limitations in in-game economies and unlocking new possibilities for gameplay, monetisation, and collaboration, crypto could totally reshape the $220 billion gaming world.

And all of this is great news for those of thus who are invested in the right crypto assets.

Until next time.