Research Summary
The report by Colleen Sullivan, Co-Head of Venture at Brevan Howard Digital, explores the intersection of Web3 technologies and the gaming industry. It discusses the potential of Web3 in transforming the gaming industry, which is expected to generate $184 billion in revenue by 2023. The report also highlights the increasing demand for ownership of virtual gaming items among younger gamers and predicts that most games will incorporate Web3 technologies over the next decade.
Key Takeaways
Web3’s Potential Impact on the Gaming Industry
- Web3’s Role in Gaming: The report suggests that Web3 technologies will become a dominant business model in the gaming industry over the next decade. This is due to the increasing demand for ownership of virtual gaming items among younger gamers, which Web3 can facilitate.
- Size and Scope of the Gaming Industry: The gaming industry is thriving, with 3.38 billion gamers globally and expected revenue of $184 billion in 2023. The report suggests that the integration of Web3 technologies could further boost this growth.
- Paradigm Shifts in Gaming: The report notes that gaming goes through paradigm shifts approximately every 10 years. The rise of Web3 gaming is likened to the rise of free-to-play (F2P) gaming, indicating a significant shift in the industry’s business model.
- Web3’s Unique Offerings to Games: Web3 provides unique features to games, including ownership of assets, programmability/composability of game assets, community involvement, royalties for developers and gamers, and democratization/User-Generated Content (UGC).
- Impact on Mobile Games: Mobile games, which generate 50% of gaming revenues, could be particularly impacted by the addition of Web3. The report discusses the disproportionate influence Apple and Google have on the industry and how Web3 could disrupt this.
Actionable Insights
- Exploring Web3’s Potential in Gaming: Stakeholders in the gaming industry should explore the potential of Web3 technologies in enhancing gaming experiences, particularly in terms of asset ownership and monetization.
- Understanding the Shift in Gaming Paradigms: Industry players should understand the paradigm shifts in gaming, such as the rise of F2P and Web3 gaming, to stay ahead of trends and adapt their strategies accordingly.
- Considering the Impact on Mobile Gaming: Given the significant revenue generated by mobile games, stakeholders should consider the potential impact of integrating Web3 technologies into mobile gaming platforms.
- Embracing Community Involvement and UGC: With Web3’s potential to enhance community involvement and democratize UGC, game developers should consider ways to incorporate these elements into their games.
