How GameTech is the Next Big Market

https://thefintechtimes.com/gametech-big-market/
//?#

By Gina Clarke

Gaming is the new growth industry, driven by lucrative loot
boxes and in-game items that players are paying over the odds to be
seen with.

While the retail industry is worth over $3.5 trillion worldwide,
the video game market hopes to carve out a small slice, around $300
billion by 2025. Instead of games with finite endings – virtual,
multiplayer games such as Apex Legends are becoming more
popular.

A virtual identity is beginning to hold more sway, and brands
such as Louis Vuitton are already capitalizing on how merchandise
and accessories are in demand. A partnership with Riot Games has
already widened their audience to millions of 18-24 years old, and
the brand has announced that it will be launching a unique capsule
creation alongside Riot later this year.

While the model behind free-to-play games may seem to miss the
mark, it has instead been a big hit for players wanting to improve
their look, sound and identity within the game. Moreover, they are
happy to pay to do so. Games such as Fortnite and Apex Legends have
proved popular with a younger audience who are spend their
disposable income on such items. Fortnite on its own generated
$2.4bn of revenue in 2018, while experts predict that they will
make more this year through in-game items, season passes and
subscriptions. 

Interestingly the most popular in-game items appear to be
weapons, cars or character outfits and other skins. It’s perhaps
no surprise that a whole industry of tech is now supporting this
passion, including new-gen marketplaces. Like eBay for gaming,
trading outlets such as DMarket are helping match player wants for
trades or swaps. The players can instantly exchange items across
the games and even make bids for skins that haven’t been put on
sale yet. With no pressure to sell, the platform allows the seller
to negotiate with a potential buyer to produce a sale on their
terms.

It’s perhaps no surprise that a whole industry of tech is now
supporting this passion, including new-gen marketplaces.

However, there are some problems in the technology lagging
behind. “FinTech has coupled with gaming to produce a new cost
effective industry. Indeed, a skins-based game economy is the
gaming industry’s most lucrative model, but 88% of developers
can’t access this multi-billion-dollar market because they lack
the tools to build an in-game item economy.” says Vlad Panchenko,
CEO and Founder of DMarket. 

While only a handful of games at the moment are built on
platforms that allow users to swap their inventory, with the onset
of cloud-based items this could increase. 

New subscription services such as Google Stadia and Apple Arcade
will support a huge boom in this technology where access to titles
will become much smoother. With gamers spending on average 7.1
hours a week playing their titles, this figure is set to double by
2021 with the development of cloud gaming. It’s no wonder why
cloud gaming is eager to erase the borders between games. 

The market for rare in-game items is growing, DMarket has
already seen a sale of $61,000 for a sniper rifle skin and a unique
Formula 1 race car trade for $113,000. Once named brands like Louis
Vuitton, Moschino and Nike jump on board for apparel, soon users
could be spending more on a virtual outfit than what they do in the
real world, stimulating the birth of the third party apps and
outlets for gamers. 

Another quirk of the GameTech industry is the ability for
players to monetize their games. From the well-known Twitch live
stream to FirstBlood, a leading gaming platform that allows amateur
esports players to earn rewards for playing video games. Both types
of models conform to the view that the more invested a player is,
the more rewards they can reap.

Joe Zhou, Co-Founder and CEO of FirstBlood, believes that the
future of GameTech is in this in-game item and subscription model.
He compared it to the same leaps that Spotify took with music
streaming, allowing for more consistent a non-seasonal revenue for
the industry. He added, “The way to drive continued industry
growth is to provide gamers with a game-agnostic way to transfer
points, in-game currencies, and in-game items among the titles they
play, either through a secondary market or by allowing them to
consume these digital items in competitive matches or tournaments,
similarly to what we are doing at FirstBlood.

“I think cloud gaming will inevitably revolutionize how game
IPs will be distributed, deployed or even built. In the near
future, we will probably see one of the cloud platforms releasing
tools that would empower game developers to build on with one-click
deployment into the cloud infrastructure without having to worry
about the latency, optimization and DevOps problems related to it.
It will probably also further cut costs and time before a game is
ready for the public.”

And with the foundations of this industry underpinned by cloud
technology, AI and the blockchain, GameTech could quickly become
the next big market for cloud based and FinTech applications.

The post How GameTech is
the Next Big Market
appeared first on The Fintech Times.

https://thefintechtimes.com/gametech-big-market/