In 1996, when the Nintendo 64 was first released in the United States, it sold 1.6 million units (worth $200 each) in the first quarter. Her closest competitor during the holidays was the $30 Tickle Me Elmo doll, which sold nearly a million items in a single window. More than 20 years later, when the $300 Nintendo Switch sold 1.5 million units in its first week, the competition was much higher, and not just during the holidays.
The gaming industry has changed a lot since the beginning. From generating core revenue by selling physical and digital copies of games to generating in-game revenue through microtransactions, the advent of the internet has significantly changed the gaming landscape. While video game studios in the last millennium relied on revenue from the sale of games and gaming equipment, today’s giants don’t expect to buy their games at all.
gaming business
Nintendo is a relatively rare example of a large game studio that hasn’t gotten very deep into the water for microtransactions. Fortnite makes about $5 billion annually for Epic Games, and with those numbers, you can bet most game companies are at least exploring the free-to-play model. However, this shift in consumer thinking from deep aversion to moderate acceptance of microtransactions has been a long and difficult process.
Fortnite wasn’t the first game to feature microtransactions, but it was one of the first popular examples of a live service game that relied solely on in-app purchases. It came at a time when the concept of microtransactions has sparked images of a toxic economy with loot boxes and luck-based shopping, when games have become pay-to-win ecosystems, and consumers are increasingly frustrated with game publishers.
Fortnite has reversed the script by promoting microtransactions as a way to stand out in the game while supporting the developers side by side. They didn’t affect the game, prevented players with deep pockets from dominating the games, and served as a great way to show those with money and gratitude – a kind of vanity-driven kind of charity. Sound familiar?
Fortnite treasure chest. Source: Fortnite Wiki
Will you intervene?
Indispensable tokens (NFTs) must find their place in gaming ecosystems. From early applications like CryptoKitties to today’s Axie Infinity, digital tokens seem designed to be used in games.
Some of the biggest names in the video game industry use NFT, which is not surprising. Accessing games has never been easier than it is today, as it has gone from being a niche consumer base to setting global pop culture trends. For decades, collectibles have been selling at outrageous prices – why should their digital counterparts be any different?
From Ubisoft to Square Enix, what really fascinates the industry is finding the best approach. Some have simply started selling digital goods like NFTs, so that buyers can resell them to other, more active enthusiasts. Others are trying to implement the “play to win” (P2E) model used by Axie Infinity.
Earlier this year, US video game retailer GameStop announced plans to partner with an Australian crypto company to create a $100 million fund for NFT creators, content and technology. In his New Year message, Square Enix President Yosuke Matsuda indicated that the company wants to include blockchain/NFT in its future releases, but did not elaborate.
Ubisoft recently tried to release a limited set of NFTs along with Ghost Recon Breakpoint games. In an ideal world, it would be a celebratory moment – one of the world’s largest and most expensive gaming giants has announced the introduction of blockchain technology. As you already know, this announcement did not go exactly according to plan.
fantasy capitalism
According to a DappRadar report, gaming-related NFTs generated nearly $5 billion in revenue last year and accounted for about a fifth of all NFT sales in 2021. Ubisoft revealed Project NFT on December 7, a move that was met with 96% of hate in the YouTube video ad, and after Two weeks ago, only 15 NFTs were reported to be sold, totaling just under $1,800.
“The traditional game industry will not accept NFT as it is,” Wade Rosen, CEO of legendary video game company Atari, told Cointelegraph. Rosen said that while blockchain games will continue to evolve, there is currently not enough tangible benefit for players to consider using them.
“NFTs – how they are made, what value they bring to individual players, the communities of players formed around single-player games – have to evolve a lot before they can expect widespread use in the [traditional games] industry.
