After diving into trends across games, Esports, live streaming and cloud gaming, it was time for gaming specialist group Newzoo to look at two newer segments of the games market. That’s why this company decided to present a top 5 list of developments to watch in the Metaverse and Blockchain gaming.
Trend #1: Many consumers will begin to accept Blockchain gaming as the market addresses pain points
Growing pains aside, titles like Axie Infinity have catalyzed a new wave of Blockchain game development. These success stories have shifted Blockchain games from an unproven concept to a reality that other companies can iterate on. Despite some backlash from gamers, even huge AAA publishers like Ubisoft are getting involved.
Building on the lessons of prior titles, upcoming Blockchain games will have deeper gameplay and high-fidelity graphics, likely attracting even more curious players to the ecosystem. At the same time, large publishers’ Blockchain experiments are blurring the lines between traditional and Blockchain games, acting as an entry point for many players.
Trend #2: Metaverse investment and M&A activity will accelerate in 2022
The Metaverse is young, and its growth potential appeals to investors. This means venture capital is flowing into the Metaverse market, with more investments happening seemingly every week. This year, there will be bigger investments and even outright acquisitions. Naturally, companies already active in the Metaverse will seek strategic acquisitions to strengthen their leading positions, following a trend of consolidation seen in the broader games market.
At the same time, M&A transactions are one of the fastest ways for companies without expertise in Web3.0 to catch up with the competition. As the Metaverse is already a massive part of many big tech companies’ strategies, many will turn to M&A to grow (or form) their footprint. As the Metaverse is such a young market, Web3.0 developers are cheaper to invest in now than in the future.
Trend #3: NFT companies will become luxury and lifestyle brands
Some NFT collections (like Bored Ape NFTs) are already popular among celebrities. These high-profile people are eager to show their expensive NFT collections to vast followings. Exposure from influencers can increase consumer demand for NFTs among the extremely wealthy and the wider public, echoing the traditional luxury-fashion market. These exclusive NFTs will serve as status symbols to the broader public.
Social media platforms are also embracing the technology. For example, Twitter Blue subscribers can now display their NFTs on their profiles. The move makes sense, as Twitter is the go-to platform for many crypto and NFT enthusiasts. Twitter can monetize these fans, all while exposing NFTs to a wider audience. Huge brands are also buying NFTs.
Trend #4: Fashion brands will be early winners in the Metaverse rush
Clothing brands are playing a huge role in shaping the early stages of digital identity. After all, digital expression via avatars is an important part of a player’s virtual identity. Branded skins are nothing new, but fashion brands are best positioned to capitalize on the trend as the Metaverse continues to grow. Fashion appeals to most consumers in the real world, translating well into the digital world.
For example, luxury-fashion house Balenciaga teamed up with Fortnite to launch digital skins alongside a physical clothing line. While the real-world clothing is out of reach for many fans, Balenciaga’s digital Fortnite cosmetics are just a fraction of the cost. Also recognizing the opportunity early, Nike acquired NFT maker RTFKT, specializing in digital sneakers, in December 2021. Likewise, Adidas partnered with Bored Ape Yacht Club, and created their own custom NFT wearing Adidas clothing. The company is also investing in virtual land in the Metaverse.
Trend #5: Metaverse growth and FOMO (Fear of Missing Out) will result in brands buying virtual real estate
Virtual land allows companies to build interactive experiences in the Metaverse for consumers. Meanwhile, brick-and-mortar retail stores have struggled during the pandemic and are expensive for brands to maintain. In growing Metaverses like Decentraland and The Sandbox, virtual land can provide an attractive (and cheaper) alternative for brands re-evaluating their physical footprint. These virtual locations can act as venues for events or highly realistic virtual shopping experiences for digital or real-world goods.
A single location in the Metaverse has the potential to reach a larger share of customers than most physical locations. To that end, early Metaverses like Decentraland and The Sandbox have attracted major investors seeking to build virtual shopping malls. Some examples are the following: a) Tokens.com (via its subsidiary Metaverse Group) purchased digital property in downtown Decentraland‘s Fashion District for USD 2.4 million; b) Virtual real-estate developer Republic Realm acquired land in The Sandbox for USD 4.3 million to build a virtual mall dubbed Metajuku, a digital rendition of Tokyo’s famous Harajuku; and c) Adidas also bought land in The Sandbox, which it will populate with branded content and experiences.