Crypto and Mobile in 2022 Series Part 3: NFTs, metaverse, and blockchain-based gaming
Fintech isn’t the only app vertical to see the impacts of blockchain in 2021 – gaming and entertainment are also primed to be shaken up by crypto and digital currencies. From $91.8 million NFT sales, to Facebook’s new direction as Meta, NFTs and the metaverse have become hot (and controversial) topics in mobile, tech, art, and gaming.
While in Part 2 of our series, we covered the basics of blockchain and crypto exchange apps, in this blog post we explore what NFTs, blockchain gaming, play-to-earn (P2E) gaming, and the ‘metaverse’ mean for mobile app developers in 2022.
What are NFTs and what do they mean for mobile?
While NFTs have existed in some form since 2014 and in a standardized form since 2017, 2020-2021 saw a huge rise in cultural awareness and adoption. As we discussed in part one of this series, record-setting auctions of digital art NFTs by Sotheby’s and Christie’s, a wide range of celebrity endorsements, and the popularity of NFT collections such as CryptoPunks and Bored Ape Yacht Club drove a mania for these tokens in 2021.
NFTs are unique units of data stored on a blockchain that can be used to represent digital ownership. Unlike a cryptocurrency, they are non-interchangeable; each NFT is unique and can only exist in one wallet at a time. However, they can be transferred and traded, making them akin to a digital deed of ownership or certificate of authenticity.
In addition to art, NFTs have huge implications for music, gaming, events and other entertainment verticals, as they enable new monetization models for creators, interoperability of digital items, and digital ownership for fans. Gaming NFTs and blockchain gaming attracted almost $4 billion in investment in 2021, making it the largest investment category in the industry. Major studios from Electronic Arts to Take-Two Interactive also came out in favor of the potential of NFTs in gaming.
However, NFTs have proven to be a polarizing topic, with many gamers pushing back against studios’ plans to adopt the technology. Ubisoft’s announcement to release NFTs for its Ghost Recon franchise led to criticism by fans, and some studios have abandoned plans to adopt NFTs in response to the backlash. The success of NFTs in gaming remains to be seen, but with major investments from brands of all sizes, 2022 is bound to see NFT adoption continue to grow. Coinbase and Gamestop are releasing NFT marketplaces in 2022, and Samsung has announced it is adding an NFT platform to its Smart TVs beginning with its 2022 lineup.
On mobile, popular NFT marketplaces such as OpenSea are mostly currently view-only, allowing users to display their NFTs on their mobile devices. Minting (creating) NFTs on a blockchain comes with a cost, as all blockchain transactions require a network usage fee (“gas”), so apps such as Rarible have introduced the ‘lazy mint’ feature, which allows users to create an NFT for free within the mobile app, with on-chain minting not taking place until an NFT is purchased. For apps using in-app NFTs, working with an MMP such as Adjust means seamless tracking of in-app events associated with NFT creation, as well as the ability to connect and attribute these events to UA campaigns, and measure the users acquired from them.
What is the metaverse?
Off the back of the NFT trend has also come the explosion into public awareness regarding the metaverse, thanks in large part to Facebook renaming as Meta and defining their direction as a metaverse company. The metaverse is a concept from science fiction usually attributed to the 1992 novel Snow Crash by Neal Stephenson and explored in popular movies such as “Ready Player One.” It refers to a hypothetical network of 3D virtual worlds, interacted with using AR and VR technology. Many companies see the metaverse as the evolution of the internet and mobile, where users interact with immersive virtual and mixed reality realms.
While the concept of virtual worlds isn’t a new one, crypto-economic inventions such as distributed ledgers and NFTs allow for the creation of a universal state layer that could provide the property rights, identity, and digital ownership backbone required for an interoperable and open metaverse. New interest in NFTs and crypto, combined with Meta’s announcement and the popularity of immersive, multi-user games such as Roblox, has driven a wave of speculative interest in metaverse projects and cryptocurrencies, including a ‘land boom’ for virtual real estate, as well as announcements and investments from companies such as Microsoft, Nvidia, Disney, and Epic Games.
While a functional metaverse is still a ways out, that hasn’t stopped mobile apps, especially games, from capitalizing on the hype. According to data from Sensor Tower, over 500 apps have added the term ‘metaverse’ to their title or description in hopes of capturing user interest, with mobile games leading the way and finance apps following closely behind.
Blockchain gaming, play-to-earn, and mobile
Pioneered by the massive growth and popularity of Axie Infinity, blockchain-based games, which allow players to earn digital currencies, have grown as a popular crypto application. These games are commonly known as Play-to-Earn (P2E) games, as users are rewarded for their achievements in the game (typically with a token which can then be sold into other cryptocurrencies). Typically, these games have an in-game currency, a marketplace, and a token economy (usually governed by the community of token holders). Some games are incorporating decentralized finance (DeFi) functionality with gaming, in a development sometimes called GameFi.
While P2E games are growing in popularity among crypto users, surpassing DeFi as the leading dApp use case, they are still primarily browser-based. However, P2E-featured mobile games are beginning to gain traction. Thetan Arena, a multiplayer online battle arena (MOBA) game with P2E features released in November 2021, has garnered 10 million downloads in less than 3 months and became the #1 Action > Brawl game in December 2021. And January saw the launch of Apes vs. Mutants, a role-playing mobile game competition based on the popular NFT collection Bored Ape Yacht Club, with special functionality available for holders of the NFTs.
NFTs and P2E models provide new opportunities for mobile game developers, but they also face numerous challenges, including sustainability of P2E business models, successful combinations of game mechanics and financial incentives, incorporating new blockchain infrastructure, regulatory challenges, and more. The degree to which these models will find success in mobile gaming remains to be seen, but there will certainly be a wave of new entrants into the space in 2022 and beyond.
As blockchain-based games and NFT functionality grow on mobile, competition for users in this new vertical will grow with it – making solid user acquisition practices crucial for success in this new space. MMPs such as Adjust are critical in helping mobile marketers track and attribute conversions, optimize ad spend, utilize deep links, and more.
Make sure to download our upcoming “Fintech Deep Dive: Digital Currencies 2022 Playbook” to learn how crypto apps performed in 2021, how user engagement compares to stock trading apps, and what crypto apps can do to attract and keep high-LTV users.