📖Market analysis
Last updated
Last updated
Web3 games currently represent a minor segment of the gaming industry. However, there is immense potential for exponential expansion as blockchain-based gaming gains prominence and becomes the new paradigm. We believe that there is presently a “race” among market leaders to establish Web3 gaming as the new standard for the gaming industry. This enthusiastic investment by major players serves as a powerful affirmation of our vision, indicating that we are headed in the right direction.
In the current market landscape, the emphasis is on the importance of executing ideas correctly rather than the sheer quantity of projects pursuing similar solutions. We believe that establishing a distinct project with distinct value propositions, such as the ones mentioned earlier, is essential to establish Web3 gaming as the new paradigm.
The gaming industry has gained immense popularity worldwide. Currently, an astounding 3.26 billion individuals, accounting for about 41% of the global population, is actively engaged in gaming. Moreover, the gaming industry generated yearly revenue of $200 billion in 2022, and it is projected to reach $300 billion per year in 2028. Online multiplayer games also have a huge audience, with around 22% of gamers spending 61-80% of their time playing.
Web3 gaming is essentially gaming elevated by blockchain technology. Gaming has the potential to become one of the primary factors driving the widespread adoption of cryptocurrencies, and Web3 gaming will soon become integrated into the larger gaming industry rather than being a niche market. According to a report by Polaris Market Research, the Web3 gaming industry is expected to become the new standard in gaming, with an estimated market size of $1,020 billion by 2032. This shows that we are witnessing the initial phases of an exponential expansion.
This adoption is due to the several advantages of Web3 gaming over traditional games, such as decentralization that allows for greater transparency, security, and immutability of game assets and transactions. The ability for players to have real ownership of their in-game assets allows them to trade or sell them for real value and also brings a new level of gaming experience, where players can participate in real-time economic systems with tangible value. This creates a new level of immersion, giving players the opportunity to participate in in-game economies and earn rewards while enjoying addictive gameplay.
Despite being in its "early" stage, Web3 gaming, specifically P2E/GameFi, accounts for nearly 46% of all blockchain activity in terms of unique active wallets, according to DappRadar. Based on multiple sources, we found that the Web3 gaming market size is valued at $4.6 billion in 2022 and is expected to reach $65.7 billion in 2027 with a CAGR of 70.3%.
In 2022, gamers spent an average of $76-86 per month ($912-$1,032 per year) in games, leading to in-game purchases contributing 85% of the total revenue, amounting to a substantial $60.4 billion in the United States alone. This highlights the substantial revenue-generating potential of blockchain-enhanced games, underscoring their widespread appeal and significant financial contributions within the blockchain industry. Lately, established studios and some of the largest investment firms are beginning to recognize this reality with Web3 gaming raising $156 million in January and $148 million in February of this year, emphasizing that Web3 games are gaining significant traction and attracting substantial investment from key industry players.
Many NFT collections and tokens face the following issues:
a. Lack of utility and use cases, which limits their potential value and utility for their holders.
b. Limited engagement from their users, struggling to keep their community engaged and interested in their projects.
c. Adoption is also a significant challenge, as most projects struggle to reach a few thousand daily active users.
2. Play2Earn games need to have a community in order to grow and stay on the market. Also, most Play2Earn games have poor gameplay and are heavily dependent on token farming/mining with high inflation affecting the token value. The entry-level price of most games is still too high, and this is one of the causes for players dumping earned items and tokens in the market to recover the investment.
3. Little collaboration between different projects, with Web3 platforms competing to capture the attention of investors and audiences, diluting the attention of expert Web3/crypto users.
4. Complex onboarding to Web3 games, with a steep learning curve where it is mandatory for users' safety to learn about non-custodial wallets, contracts, etc… Additionally, these systems are not interoperable with legacy login/account management options. These obstacles make Web3 a de facto niche market isolated from the major gaming industry.
Elevated cost of conventional marketing due to stablished competitors having a high marketing budget.
Low conversion rate of web2 gamers to active users of web3 gaming projects due to steep learning curve and stigma surrounding NFTs, crypto and web3 overall related with irresponsible investment or gambling.
Web3 users tend to give more weight to the speculation on NFTs and tokens rather than focusing on the real utility provided by these digital assets. There is a prevalence of investor's behavior rather than users of a product.
Our project aims to solve the problem of limited utility and engagement in NFT collections and crypto tokens by providing a new platform for their communities to interact and benefit. By integrating with our video game, these communities can offer their members new ways to use their tokens, such as in-game rewards and virtual goods. This enhances the value of the tokens and increases engagement and activity within communities. Additionally, our partners have the opportunity to create their own in-game economies, further expanding the potential use cases and adoption of their tokens and creating new opportunities for their communities.
To overcome the high entry price barrier, we will establish a token reward system at FusyFox based on tournament performance and individual player skills. These rewards are hard to obtain and scarce, and include several in-game utilities, making them more valuable to players. A combination of Free-to-Play parallel with Play2Earn will be used to remove any barriers to entry.
To promote collaborations in the Web3 environment, we will establish B2B partnerships with other Web3 projects as part of our goal to become the leading platform for collaborative games. Any Web3 project can participate in our video game not only as another civilization with its in-game characters but also through various initiatives, such as the delivery of special items, in-game advertising, tournament or team funding, etc... In the near future, SDKs and APIs will be released and could be used for seamless integration of third-party NFT collections/items, tournaments, and ad management.
We will improve onboarding and user experience by enabling seamless interaction with blockchain technology. This will allow users to enjoy the benefits of Web3 technology (ownership and interoperability) while focusing on the game’s main goal: enjoying addictive and competitive gameplay. Our goal is to make Web3 games more accessible to mainstream web2 gamers in an easy and intuitive way. After all, Web3 games are just games enhanced with blockchain technology.