How Web3 & NFT creates new opportunities in Esports and Gaming

Gaming is amassing more fans than the movies and music industries combined.

In the new realm of Web3, blockchain unlocks a new way to make money from hobbies. People earn cryptos through play-to-earn games like Axie Infinity, Gods Unchained, and The Sandbox. Gaming enthusiasts participate in the creator economy by monetizing from Twitch livestreams playing Call of Duty & CS:GO.

Today, we will unpack the Web3 gaming and esports startup opportunities.

Below is a preview of the full report. ๐Ÿ”ฅ Join my Pro Membership to unlock 24+ reports & 1,726+ company databases covering Internet trends like these:

Section 1: Key Market Trends

(1) Esports memorabilia is going crypto-driven:

  • Companies are using blockchain to turn esports moments, playersโ€™ personalities, and video highlights into NFT collectibles. Fans can buy, sell, and trade these NFT cards, unlock access to limited edition merchandise, participate in a competition and earn rewards.
  • Ikonic allows esports fans to create highlights, mint into NFTs, and earn from in-game moments.
  • Kolex cards are a series of streamers, teams, players, and events from esports and gaming
  • WePlay Collectibles is a platform for buying esports NFT collectibles, including digital and physical memorabilia, rewards related to tournaments, and artwork.
  • Epics launched hybrid trading cards that consist of physical and digital NFT twins.

(2) APAC, the biggest esports market:

  • The Asian gaming market made up 57% of the global esports revenue ($1.1 billion). China, Japan, and South Korea have over 1 billion gamers. India is following suit, with 373 million players in 2022. Asia also has the strongest esports viewership growth, up by 21% from 2019 to 2020.
  • Gaming powerhouse, Tencent has poured money into โ€‹โ€‹League of Legends by Riot Games ($400 million), Epic Games ($330 million), Versus Programming Network ($100 million), and Clash of Clan by Supercell (84.3% major shares).
  • TikTokโ€™s owner, ByteDance recently invested US$15 million in Reworld. The company also bought Mobile Legends by Moonton for $4 billion.

(3) Southeast Asiaโ€™s esports are booming:

  • Southeast Asia alone made $4.4 billion in gaming revenue in 2019, at 16% YoY growth rate. Taiwan, Indonesia, Malaysia, Philippines, and Singapore are the major gaming markets. More than 80% of the players are mobile gamers. PUBG Mobile and Mobile Legends: Bang Bang is the most regularly watched esports.
  • Singapore-based Ampverse is following Axie Infinityโ€™s play-to-earn business model. The company recently raised $12 million in Series A from Falcon Capital.
  • Thailand-based Infofed offers content management, hosting, and analytics for online esports and tournament events.
  • Ethlas is a blockchain-based, free-to-play game based in Singapore. Using Ethlas currency, players can buy, trade, attend tournaments, earn cryptos and cash out.

(4) Creator economy of esports:

moreโ€ฆ !

(๐Ÿ”’ MEMBERS-ONLY) +7 more key trends, backed by real company examples:

๐Ÿ”‘ (5/10) Tokenizing the esports ecosystem (4 company examples)

๐Ÿ”‘ (6/10) How brands are capturing the metaverse esports opportunities (3 company examples)

๐Ÿ”‘ (7/10) How do esports fans benefit from the financial upside in cryptos (3 company examples)

๐Ÿ”‘ (8/10) How to monetize the โ€œfandomโ€ economy (3 company examples)

๐Ÿ”‘ (9/10) Why NFT gaming is booming? (4 company examples)

๐Ÿ”‘ (10/10) How to use Web3/blockchain to build the future of gaming communities? (3 company examples)

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Section 2: Market Players & Company Databases

  • ๐Ÿข Total 91 market players
  • ๐Ÿ”– Total 8 market categories or segments
  • ๐Ÿ—ƒ Company databases: value proposition, website, stage, total funding raised, year founded, company size, location, and LinkedIn
  • ๐Ÿ‘Œ Easily filter, sort, and customize the display

(๐Ÿ”’ MEMBERS-ONLY) Access the full database:

Section 3: Problems & Market Needs

(1) Players arenโ€™t getting compensated:

  • Game players spend more than 8 hours/week and US$61 Billion each year on virtual goods purchases (e.g. skins, weapons, avatars, characters, etc.). Yet, they donโ€™t own anything they purchased after spending real money.
  • New platforms exist to democratize access to game monetization for both players and creators through asset creation and blockchain games.
  • Decentraland allows creators to create and sell NFTs wearables including eyewear, helmet, mask, upper body, lower body, etc.
  • The Sandbox allows players to own, rent and sell virtual lands for profits.
  • Blankos Block Party allows players to collect blankos and sell them on the NFT marketplace for profits.

(๐Ÿ”’ MEMBERS-ONLY) +4 more market problems and how top players fill the gap:

๐Ÿ”‘ (2/5) Create new business models for gaming creators (3 company examples)

๐Ÿ”‘ (3/5) How to build the future of gaming communities (3 company examples)

๐Ÿ”‘ (4/5) Solutions to navigate the complexity in crypto games (3 company examples)

๐Ÿ”‘ (5/5) How to create economic opportunities for fans (3 company examples)

Section 4: Next Big Things & Untapped Opportunities

(1) Netflix for gaming:

  • It costs $600-$3000 for a high-performance PC and $550-$1250 for consoles. Many players invest in hardware for gaming speed. Gaming on-demand or cloud gaming presents massive opportunities to solve gaming speed problems. Users can stream video games from online servers instead of downloading the games on the computer.
  • New solutions like monthly game subscriptions can be built to cater to specific compatibility, technical performance, and scalability.
  • Amazon Luna, a cloud gaming service that allows you to play games across Windows PC, Mac, Fire TV, Fire tablets, Chromebook, iPhone, iPad, Android phones, and Samsung Smart TVs.
  • PlayStationPlus allows users to stream gaming content on PS5, PS4 or Windows PC.

(2) NFT game assets resale economy:

  • Gamers are already buying and selling in-game skins, weapons, and characters to boost their gameplay and move up their rank faster.
  • At the moment, itโ€™s easy to find places for trading non-blockchain game items such as CS:GO, DOTA 2, Clash of Clans, and League of Legends. Platforms like PlayerAuctions, G2G, Buy Clash and CS:GO Stash are serving this market.
  • As blockchain-based gaming is on the rise, there could be new asset marketplaces focusing on trading crypto games assets. DMarket is a great example. The platform has offered an NFT game section to sell Decentraland wearables on top of non-blockchain game items.
  • Similarly, Fractal is a game asset marketplace focusing on NFT games and play-to-earn games.

(3) Cross-chain games will emerge:

  • There are more than 10 blockchains on which NFT-based play-to-earn games are built. Right now, these chains are isolated. There is no easy way for players to trade assets on one chain with another without going through a centralized exchange.
  • The future of Web3 gaming is interoperable, meaning users will be able to traverse digital identities and in-game assets to other users on another blockchain as freely as possible. Therefore, more cross-chain or multi-chain gaming solutions are required to reduce isolation and improve compatibility.
  • Blockchain Monster Hunt offers a multi-chain metaverse game that connects people from different blockchain communities.
  • Splinterlands has cross-compatibility with other blockchains such as Ethereum, Tron, and WAX.
  • Duelist King, a multi-chain trading card game supported by Polygon, Fantom, and Cronos.
  • Klaymeta is integrating with the BNB Chain ecosystem to connect players in various game worlds.

(๐Ÿ”’ MEMBERS-ONLY) +5 more new market opportunities:

๐Ÿ”‘ (4/8) Niche e-commerce platforms you can start (5 company examples)

๐Ÿ”‘ (5/8) Niche e-sports games to tap into a wider customer base (6 company examples)

๐Ÿ”‘ (6/8) The future of SaaS is โ€œmetaverse SaaSโ€ (4 company examples)

๐Ÿ”‘ (7/8) Create additional revenue streams for NFT holders (4 company examples)

๐Ÿ”‘ (8/8) Metaverse commerce opportunities in gaming (3 company examples)

Section 5: Strategy & Recommendation

(1) Find revenue streams:

  • Sponsorship. Brands sponsorship made up more than 50% of the esports marketโ€™s total revenue. Influential brands include: Coca-Cola entered an esports deal with Riot Games; a $100 million esports deal between Intel and ESL; and Red Bull with T1.
  • Merchandise sales. Most common in league-branded items (ESL Shop) and esports e-commerce. Media brands like ONE Esports has built an authority around trusted sources of esports news and offer branded merchandise for gamers.
  • Event tickets. Hosting physical tournaments and local fans events such as Fortnite World Cup, ESL One, and VALORANT championships.
  • NFT & tokens. G2 esports launched @SamuraiArmyNFT, i.e. a lifetime pass to social clubs where gamers can access rewards, discounts, game nights, watch parties, and more.
  • Platform commissions. Most common in the creator monetization platforms. YouTube takes a 30% revenue cut from Super Chat and channel membership features. Twitch takes 50% of subscription revenue from Tier 1 streamers (made more than $100K in revenue).

(๐Ÿ”’ MEMBERS-ONLY) 4 more action ideas and recommendations:

๐Ÿ”‘ (2/5) 6 ways to narrow down target audience in esports/Web3 gaming

๐Ÿ”‘ (3/5) 6 ideas to differentiate your Web3 product offerings

๐Ÿ”‘ (4/5) 6 no-code tools to use for implementing Web3 gaming elements

๐Ÿ”‘ (5/5) 4 types of MVP (minimum viable product) ideas to get started

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More Startup Trends & Ideas:

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Built 11+ MVPs. Founder: Analyzing Consumer Tech & Platforms. On Deck ODF10. Product advisor US/APAC ๐Ÿ‘‰About me:

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Zoe Chew

Built 11+ MVPs. Founder: Analyzing Consumer Tech & Platforms. On Deck ODF10. Product advisor US/APAC ๐Ÿ‘‰About me: