Something @cdixon and I have been discussing: how NFTs can completely reshape mobile gaming.
Most arcade-style mobile games monetize through in-game purchases or in-game ads, which primarily function to extend gameplay. This is of course disruptive for players, but on an even more ironic level, it’s actually bad for developers.
The way the current ad ecosystem works: a game will use a platform like Unity or Applovin to connect it with potential advertisers (other games) who pay to display those ads at predetermined moments.
In other words: it’s a carousel economy, where unpopular games pay for attention at opportune moments, and hope to skim off players from a more popular game. Retention for mobile games is notoriously low (~60-80% of users churn after a day). This is one reason why.
The mobile in-game ad industry does roughly $40bn of revenue every year. And even unlikely parties rely on it: Unity, the game engine, makes only 40% of its revenue from charging for game creation tools. The remaining 60% comes largely from charging studios for monetization plans
We think NFTs can help solve this (are you surprised, anon?).
In the future, instead of monetizing via attention, web and mobile games might issue NFTs with rare or unique features that reward players. These tokens could be exchangeable between users, and create gameplay that’s far more robust than the form that exists currently.
An early starting point are NFTs with varying degrees of rarity that can be earned and traded by players. We’re also seeing founders experiment with ownable NPCs that can be programmed by users, allowing them to compose the in-game economy.
We agree with @Psycheout86: if there is enough liquidity for a trade, anything can be a currency. Axie Infinity was an early illustration of this, and other games like League of Kingdoms and Zed Run are beginning to exemplify this concept as well.
On distribution, we’re beginning to see studios explore distribution via HTML links & peer-to-peer messaging; we’re excited to see how studios and distributors solve ways to circumvent centralized app stores entirely, avoiding onerous take rates that starve in-game economies.
Between marketplaces like Opensea that make any NFT series easily tradeable, DEXs like Uniswap that create liquidity for a long tail of tokens, and immersive games that give players ownership through tokens & NFTs, we think an entirely new gaming economy can and will be built.
