Crypto gaming distinguishes itself from traditional gaming by providing gamers with a level of transparency that enables them to own the assets they earn and purchase within the crypto gaming world. In comparison, traditional gaming usually does not offer such ownership rights to gamers, and the assets owned by players in traditional games tend to hold little value outside of the game.
Although traditional gaming is still successful and enjoyable, it limits owners' ability to own and monetize their assets. However, Crypto gaming, while offering great potential, may not be accessible to everyone due to issues such as knowledge or high entry costs. The solution to this accessibility issue could lie in a mass migration to the blockchain and NFTs in the near future.
At the end of 2022 the esports industry took a big hit due to the collapse of FTX, a popular cryptocurrency exchange. FTX declared bankruptcy after a report revealed that the company lacked the funds to back customers’ withdrawals. The collapse of FTX has left the cryptocurrency industry spiraling, and the esports industry found itself caught in the crossfire. The situation has made it clear that esports is over-reliant on brand partnership revenue, specifically from riskier industries such as crypto and gambling. FTX was particularly prominent in the esports scene, with Bankman-Fried personally negotiating a 10-year, $210 million naming rights deal with esports org TSM in June 2021. FTX is also a title sponsor of Riot Games’ League of Legends Championship Series and a major partner of the leading Brazilian esports team FURIA.
The connections between FTX and the esports industry have already begun to unravel. FURIA discontinued its partnership with the crypto company, and TSM announced that it would be suspending its partnership with FTX as well. Despite multiple setbacks, TSM’s partnership arm is still chugging along, even in the cryptocurrency sector. The esports org still plans to announce another, relatively smaller, crypto partnership next month, perhaps banking on the pre-existing connections between esports fans and the crypto space to avoid any negative effects from the FTX collapse. TSM is one of the largest esports organizations, and one of few that claims to be profitable. However, other esports companies reliant on crypto-industry dollars might not be as well-prepared to weather the coming storm. The collapse of FTX is only the beginning of a difficult period for companies across the crypto space
There is a significant difference in career opportunities between developing nations and developed westernized countries due to various societal and structural factors. However, the advent of the internet and its application has opened up new avenues for people to earn a living as long as they have an internet connection and relevant software. Interestingly, countries such as the United States, Canada, and the United Kingdom have low engagement rates, but people are open to trying out crypto gaming. On the other hand, developing nations like India, Hong Kong, and the United Arab Emirates have the highest rates of engagement. Countries like Nigeria, the Philippines, Vietnam, and Brazil also have large numbers of users engaging in crypto gaming. The negative press surrounding cryptocurrencies in the US and UK has contributed to lower readings compared to other countries. Moreover, financial regulations in developed nations are more stringent, making access and publicity another factor that many may struggle with.
It is fascinating to witness how crypto gaming has created opportunities for developing countries, temporarily putting the economic downturn on hold as people open up new doors to create income with little or no barriers to entry. As we move more into 2023, it will be interesting to see how crypto gaming continues to develop. As the esports industry reorganizes to avoid shutdowns like FTX, it will be imperative for esports companies to diversify both their revenue streams and brand partnerships to be able to react more decisively to such controversies. The esports industry should take cues from the traditional sports industry’s response to controversies such as this. Consumer brands are the lifeblood of sports because they are stable, low risk, and generally responsive to controversy.