This post series is about investing in gaming cryptocurrencies

Yesterday's post is required reading for anyone not au fait with the history of video gaming. You can find it here: https://mentormarket.io/cryptocurrency/@bitbrain/how-to-win-the-game-of-cryptocurrencies-part-1

I ended off yesterday with the topic of "Microtransactions" (and a video which I hope you at least partially watched - if you didn't; it's your loss).

I'll be picking up the discussion from where we left off yesterday:

From https://pixabay.com/en/pacman-pac-man-computer-game-148906/ ; Modified by Bit Brain

How to: Win the game of cryptocurrencies - Part 2

Gaming economics

As you saw yesterday, microtransactions are taking place constantly. It's a very common gaming payment solution, made all the more possible by the rise of phone-based games.

In Part 1 I made the statement that:

I dabble in the odd Android game on my phone; but really I don't count that as gaming. I've used consoles too, but I don't like them. I know there is fierce debate on this topic, but I consider PCs to be far superior

I stand by this statement. But I am a classic gamer, one of the more "hard core" / "old school" types. I'm a dinosaur, one of a dying breed. The majority of modern "gamers" (whether I cringe when extending the term that far or not) are now mobile phone gamers. And you had better believe that the game developers know it! The landscape is changing, and being of the more "geeky" persuasion, game developers have always done a rather good job of moving with the times. Their successes speak for themselves.

Facts and figures

$137.9 Billion

No I'm not talking about the market cap of Bitcoin (although that figure is almost exactly the same). 137.9 Billion US Dollars is what the 2018 video games industry is worth according to newzoo.com. To put it another way, that's almost half of the entire market cap of all cryptocurrencies combined. And it's growing rapidly. Last year it was over $16 Bn (13%) less. It is projected (by newzoo) that the industry will reach $180.1 Bn by 2021 (a 10.3% annual growth rate). If you had any doubts about the value and growth of the video games industry, I hope that you have changed your mind.

There are three major trends which I have identified to be sweeping the gaming world:

Trend 1: Mobile Gaming

$70.3 Billion

That is how much of the market is attributable to Mobile Gaming alone. Mobile gaming (smart phones and tablets) is now the dominant form of gaming, with PC gaming and console gaming splitting the remaining just-less-than-half fairly evenly between the two of them.

Of this $70.3 Bn, 80% ($56.4 Bn) is from phones, with the remaining 20% coming from tablets.

Crazy fact: The telephone (you know, that thing Alexander Graham Bell invented for people to talk to one another over long distances) is now the world's premier gaming device!

It also makes a pretty decent cryptocurrency device. What a fortuitous coincidence!

I mentioned the growth of the industry by 2021. Most of this growth will be in the mobile sector. As recently as 2012, mobile was still the smallest sector in gaming. By 2021 it should be worth over $100 Bn!

This does not mean that PCs and consoles have been forgotten. Their projected growth rate is 4.2% per annum, but that could grow faster thanks to...

Trend 2: eSports

Have you heard of Twitch.tv? Twitch.tv is a video streaming platform used mainly for eSports. For those of you who may not know, eSports means Gaming - as a spectator sport. It may sound silly until you see large facilities packed with excited spectators watching professional gamers (that's right - people who play games for a living) in competition. See the video clip I posted yesterday for such examples.

eSports is firmly on the rise. Twitch.tv is a spin-off platform that was launched in 2011. Already it has over 2.2 million monthly broadcasters and 15 million active daily users every day! There has been a 95.5% increase in Twitch viewership of major eSports events during the first four months of 2018 compared to the same period for 2017.

Are you now starting to see why I'm excited about any crypto that could successfully tap into this industry?

I'm not the only one that can see the potential of eSports. Google has just acquired Twitch at a cost of $1 Bn! I guess that they want to merge it with their YouTube Gaming channel.

Every year there is a gaming conference called "E3". These days it is televised on Twitch. E3 2018 ran from 12 to 14 June at the Los Angeles Convention Centre, with 70 000 people attending the event. More importantly: 16 million hours of the conference were watched on Twitch! And that's just a conference!

Newzoo estimates that the eSports economy will grow by $906.5 Million, or 38%, in the coming year and will be worth $1.4 Bn by 2020.

Trend 3: Enter the Dragon

China is growing in the world of gaming. Fast! 28% of all gaming revenue spent this year will be from China. The USA is in second place, but Chinese year on year growth is far higher. Japan is in third position. This is not to say that the rest of the world isn't playing too. Europe has many gamers, and the emerging phone markets of the Middle East, Africa and Central and South America are fast catching up.

As a rapidly emerging global economy with a population approaching 1 500 000 000 people, China is set to remain the market leader of gaming consumption for many years to come. As adoption continues to rise and popularity grows in China, so will gaming revenue worldwide. Of course the same could be said of the Chinese adoption of cryptocurrencies, especially those which have been developed locally, with government regulations in mind, by someone who has consulted on the matter for the Chinese government. (*cough cough cough* buy NEO *cough* - don't say I didn't tell you while you were too busy buying BTC/EOS/LTC/Monero/TRX to listen!)

A few game examples:

Let's see what I'm talking about by means of a few examples. And can crypto really be used with these games?

Clash of Clans (CoC)

Was the number one Google Play app in 2013. In 2015 it was the highest earning app on both App Store and Google Play, pulling in estimated earnings of $1.5 Mil per day! CoC has a premium in-game currency called "gems" that is bought with fiat currencies through microtransactions. Current revenue is about $400 000 daily.

World of Tanks (WoT)

Oldest of the "World of..." family, WoT holds the Guinness Record for the most players online simultaneously on one server: 305 000. Sadly I don't have newer statistics; but it passed World of Warcraft in microtransactions revenue in 2013, by earning $370 Mil. In 2013 WoT had 75 000 000 registered players globally! That number must have grown significantly since. That's the population size of a fairly well populated country! WoT also has a premium in-game currency called "Gold" which can be bought with fiat money through microtransactions. It's used for funding things like new tanks, improved ammunition, camouflage paint, equipment upgrades etc.

Defence of the Ancients (DOTA/DOTA 2)

Developed from Warcraft III - DOTA became a very popular online game. As early as 2014, a tournament took place with a prize fund of $9 323 980! It is a popular game for live streaming.

League of Legends (LoL)

This is one of the largest and most popular eSports games. It is estimated to have over 100 million players monthly. According to Wikipedia:

The 2017 World Championship had 60 million unique viewers and a total prize pool of over 4 million USD. The 2018 Mid-Season Invitational had a overall peak concurrent viewership of 19.8 million, while the finals had an average concurrent viewership of 11 million.

LoL also uses microtransactions to purchase the in-game currency called Riot Points.

I could go on

There are so many more examples that I haven't even touched. But my objective here is not to list every example in detail, it's just to press home the point that there are big money spinning games out there. Games which already have their own currencies... The games I have mentioned above are not necessarily the most popular ones right now. Games like Counter-Strike: Global Offensive (CS:GO), Hearthstone: Legends of Warcraft, Heroes of the Storm, Overwatch and Fortnight are a few additional relevant examples in current gaming. Feel free to look up how much each of them makes!

You get the picture. Millions of players are playing these games every day. And they are paying millions of dollars to do so through microtransactions. Better still, thanks to eSports, those who don't play watch the games streamed online instead of playing them themselves.

The potential for a cryptocurrency in this market sector is ENORMOUS! Don't you think that investing now would be a good idea?

Changes in society

Back when I was young, trying to sneak a quick game of "Alley Cat" or "Frogger" in on an old XT was invariably frowned upon. Children were not indoor creatures. They belonged outside. Even too much reading often got me into trouble. It would inevitably be met with comments such as: "Have you been outside today?", or more commonly: "Go play outside!". Being the '80's such things were not open to debate, debate rewarded you with a swift flat-hand across the backside in a manner now considered to be "child abuse" and a qualification for jail time for the parent! But things were different back then, in many ways better, in many ways not. Nowadays children are encouraged to stay inside. In many places it is not even safe for kids to be outside on their own!

I grew up before mobile phones had even been invented and personal computers were:

1. a novelty,
2. only owned by the rich,
3. ...who could usually hardly use them, (remember we had to use DOS, Microsoft Windows also didn't exist yet!)
4. and were almost always reserved for the exclusive use of "Dad" for his "work".

Children today are therefore growing up very differently to what previous generations did. This means that as the younger generations grow older and start to earn money of their own, they are far more likely to follow the likes of eSports rather than football or hockey or tennis or the many other sports I was reluctantly forced into as a youngster. This will certainly sustain the growth and continued adoption of gaming and eSports into the future.

Cryptocurrencies

By now you probably want to know about how you could potentially get into this market. You want to know the best places to invest. You want the hot tips from Bit Brain... Well hard luck, I'm not going to tell you! That's my secret and I'm keeping it to myself. You can join my paid channel for 1000 SBD/month for the answers you seek 😜

On a more serious note: that will be the subject of Part 3 of this series. I still need to tell you about the different types of gaming cryptos in existence and how the economic models for each will work. Thanks to today's post you should now be able to understand what I will be talking about if I refer to something like premium in-game currencies or eSports or DOTA 2.

I'll also tell you where I've put my money and why. As usual; Mr Diversification himself has spread it out a bit. As you will see, the choice of cryptos is rather large and bewildering. Luckily for you, you know someone who is both a cryptohead and a gamer. I've got your back, but never forget to DYOR.

More about that tomorrow!

Yours in crypto,
Bit Pac Brain Man

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Published on

by Bit Brain

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