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NFT creates new gaming business model

Ines Lin, Taipei; Jack Wu, DIGITIMES Asia

Credit: DIGITIMES

A Taiwan-based data analysis service provider has released a non-fungible token (NFT) market report for 2021-2022, showing that NFTs combined with games have become a new business model. However, as the global crypto market declines, NFT transactions have also slowed down.

Big Data Company used its public opinion analysis system of KEYPO to conduct a research from January 1, 2021 to April 30, 2022 covering posts and Internet volumes on Facebook, YouTube, Instagram, news media, forums, and more.

Using data from Nonfungible.com, the report shows that for global NFT sales in 2021, games accounted for the highest percentage (77%), followed by collectibles (16%), art (3%), utility NFTs (2%), and metaverse related (2%). The percentage for games grew from 44% in 2020 to 77% in 2021. In terms of the total transaction values, collectibles accounted for the highest percentage (48%), followed by games (30%), art (16%), utility NFTs (3%), and metaverse related (3%).

Source: Nonfungible.com, compiled by DIGITIMES Asia, August 2022

Source: Nonfungible.com, compiled by DIGITIMES Asia, August 2022

Discussion about NFTs in Taiwan began to surge in November 2021 and reached its peak in January 2022. This surge was aided by influencers and celebrities joining the NFT circle, plus the popularity of "The Bored Ape Yacht Club" (BAYC or Bored Ape) in the crypto world. After January, the popularity of NFTs declined slightly but the monthly averages are still higher than in 2021.

Before this surge (January 2021 to October 2021), NFT topics on the Taiwanese Internet featured keywords such as blockchain, virtual currency, or encryption. Most discussions were about the technical side and focused on the art category. As discussions heated up, keywords like purchase, collect, and trade began to appear. Among them, the "game" category of NFTs emerged as one of the popular keywords. Many companies released mobile games that claimed to allow players to play to earn. This showed that NFTs and games have combined to form a new business model.

The three major marketing approaches of NFTs include increasing exposure, maintaining loyal customers, and expanding the existing groups. Adding metaverse elements and gaming experiences is one of the methods to retain customers. Combining NFTs with brand stories and crossing over to different fields can also provide access to different demographics.

However, the recent downturn of the global crypto market has affected NFT transactions as well. A report by Asia Financial in July pointed out that on OpenSEa, the largest NFT trading platform in the world, the monthly transaction value went from US$2.6 billion in May to US$700 million in June, a far cry from the US$5 billion recorded in early January. The average unit prices of NFTs also fell from US$1,754 at the end of April to US$412 at the end of June. Quoting Nonfungible.com co-founder Gauthier Zuppinger, the report noted that the bear market for crypto has clearly affected the NFT market.