Three billion. That’s how many gamers there are globally who spend US$200bn a year on consoles and in-app purchases such as NFTs — let that sink in!
Spurred on by a flourishing community of users, gaming today is far from isolating. Gaming has become a social experience, with a new breed of creators transforming how games are made, played, and monetized.
Growth in the gaming market
The gaming industry is riding a growth wave. According to Newzoo, an international game industry research organization, this year global revenues from consumer spending are likely to reach US$203.1 billion, a 5.4 percent rise over the previous year. Player numbers are seeing an uptick and could breach the three-billion mark by year-end.
Moreover, gaming is no longer a solitary pursuit. Users today are not only playing video games but also interacting with each other. Although the socialization possibilities have been around for a while, the pandemic lockdowns and the new working-from-home reality gave them a timely nudge.
By spending more time at home, people discovered they could connect with like-minded through their favorite video games. The virtual interactions became a habit that stuck.
Engaged users drive the creator economy
Gamers do more than just play games: Users participate in or follow game streams.
They converse with other gaming enthusiasts on forums. They also create games, avatars, gifts, and entire virtual worlds. User-generated content (UGC) is a space worth watching and is gaining traction among enthusiasts.
In the traditional business model, gaming companies exercised full control over new game releases, from content and production to the final distribution phase. But the rise of UGC has opened up the creative process, and big legacy publishers are no longer holding the reins.
Consider the case of indie games. Developed by smaller game studios and individual creators, indie games have no major funding from big publishers and hardly any marketing outlays.
Yet, despite their low budgets, indies are having a moment. According to VG Insights, a games industry market research organization, the year 2020 witnessed the release of 9,722 indie games, marking a 25.6 percent increase over the 7,740 games announced in 2019.
Professional game designers and developers are just one part of the creator economy. Also in the mix are regular users who play and share games, sell virtual products like avatars and skins, host and moderate gaming tournaments, and develop vibrant creator communities.
All of this engagement goes above and beyond the mere passive consumption of a video game. And game publishers and platforms are rewarding these users by offering monetization opportunities.
No more platform monopolies
Gaming platforms are where enthusiasts go to play. Furthermore, these platforms provide creation tools whereby users can build themes, games, and game elements for sale. Any revenues are shared among the developer, creator, and gaming platform.
Fans have been creating games and game elements for many years, usually with no expectation of financial gain. But in recent times, game publishers have realized the value of rewarding UGC with cash.
With the advent of Web3 and blockchain games, the definition of creator is changing as power dynamics shift from the platforms to the creators and their communities.
Today, the creator economy is no longer just about providing value to the platforms, it’s about new forms of direct creator-community relationships. Creators generate content that creates value for their followers. There is an opportunity not only to offer more to their fans (including financial upside) but for both creators and their communities to finally be able to participate in the collective value that they help platforms create.
Web3 is enabling creators to build and own communities while bringing their creativity to broader groups of people, and really involving their community as part of the creation process in unique ways. And this community angle is going to be the most interesting over the next little while and really brings a new lens to the creator economy.
Blockchain propels the creator economy to a new level
Creators in gaming perform many essential functions, such as: They compile listings of popular games, recommend new releases, review and share their experiences, make it easier for users to discover and play more games, create cool compelling content about the game they’re passionate about, among others.
Blockchain technology allows creators to gain true ownership and control of their content, allowing for a fair and transparent environment for players and creators to connect and collaborate on projects. This shifts the balance of power and profits from platform operators and developers to users, rewarding creators for their NFT creations and gameplay efforts in cryptocurrency. This incentivizes users to be more engaged and invested in the game’s metaverse, leading to more unique and innovative content.
Beyond revenue, NFTs also unlock another key value driver for creators: loyalty. Loyalty is critical as creators look to build and sustain their communities in Web3 and bolster authentic participation. In addition to leveraging NFTs to engage audiences in new ways that strengthen fan relationships, the new creator economy is full of rich opportunities for networking and relationship building that can further foster loyalty among the broader community.
Who wins here? Everybody does. Creators and user-generated content are a powerful force in games. Gaming companies and creators get a new revenue stream when the creator economy expands. And this also works out perfectly for players, who gain access to a much wider selection of games.
Thanks for reading!
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