The esports market relies heavily on sponsorship, which accounted for close to 60 percent of esport revenue, organisations are looking to other revenue streams like blockchain and NFTs to support their growth.
A new report released by Newzoo noted while NFT and blockchain based sponsorship will grow, gamers are still hesitant to introducing these new technologies into gaming.
The difference is that NFTs can impact the games while esports NFTs innovation are all about the fandoms rather than the games.
“For example, organizations are innovating loyalty and reward programs by putting them on the blockchain. Many programs now allow users to trade digital goods with other fans, increasing engagement and personal investment in an esports brand,” the report authors write.
Fans can also earn digital rewards when they engage with an organisation’s content, including commenting on an Instagram post, watching a YouTube video, or chatting on a Twitch stream, the report explains.
“Fan participation builds reach and engagement for esports teams and organisations. It can also open the door to more sponsorship revenues,” the report explained.
“Esports’s relationship with blockchain and NFT is already beginning to flourish, and we expect to see even more developments throughout the year.”
Growing pains aside, titles like Axie Infinity, an NFT-based online video game have kickstarted a new wave of blockchain game creation.
The report notes that these success stories have shifted blockchain games from an unproven concept to a reality that other companies can iterate on.
Building on the lessons of prior titles, upcoming blockchain games will have deeper gameplay and high-fidelity graphics, likely attracting even more curious players to the ecosystem (especially those on the fence initially).
At the same time, large publishers’ blockchain experiments are blurring the lines between traditional and blockchain games, acting as an entry point for many players.
The current barrier to entry for many existing blockchain games is simply too high for undecided gamers, the antithesis of what draws so many gamers to free-to-play experiences. Anyone looking to start playing Axie Infinity right now has to pay hundreds of dollars in up-front costs.
These barriers will lower in 2022 as developers will continue to improve the first-time user experience of their blockchain games.
In another report, Newzoo detailed the top 25 public companies by gaming revenue, naming Tencent, Sony, Apple, Microsoft and Google leading the pack.
Activation Blizzard, Nintendo and Electronic Arts were ranked seventh, eighth and ninth respectively.
According to the report, the ranking is based on an analysis of annual and quarterly financial reports published by a number of relevant publicly listed game companies.