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🎮 One trend you can't miss

🎮 One trend you can't miss

PLUS: what do Deutsche Bank & Mastercard have in common?

Alex M.
June 20, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: Crypto gaming could bring the next billion users into crypto. It’s a huge opportunity. Today we’ll break down the easiest ways to invest in this trend.

Let’s dig in.

🥔 Today’s meat and potatoes

Get smarter on crypto in 2 minutes

There are an estimated 3 billion gamers in the world today. Gaming is a $300 BILLION industry - much bigger than the film industry.

For reference, the most successful Harry Potter film brought in $295 million in its first two weeks.

But the recent Harry Potter video game Hogwarts Legacy racked in $850 million in the same time period.

Not bad

Of all time, the most valuable IP in the world is Pokémon, nearly twice as valuable as Star Wars.

Top 10 Highest-Grossing IP in History:
1. Pokemon, $110B
2. Hello Kitty, $89B
3. Mickey Mouse, $83B
4. Winnie the Pooh, $81B
5. Star Wars, $70B
6. Mario, $48B
7. Disney Princess, $46B
7. Anpanman, $45B
8. Marvel, $38B
9. Harry Potter, $33B
10. Spider-Man, $32B
— Rex Woodbury (@rex_woodbury)
6:01 PM • Jun 9, 2022

You get the gist. Yet non-gamers consistently underestimate the importance of gaming.

But for the first time ever, crypto games allow:

gamers to own their in-game assets (in the form of NFTs) and earn an income from playing
investors to speculate on the next big IP (like Pokémon, Mario, World of Warcraft, etc.)
game developers to reward their best players with financial incentives

So what do you think happens when billions of users realize they can make money playing actually fun games?

That’s why a lot of crypto folks - including Chris Dixon, crypto OG and partner at the world’s largest VC firm a16z - believe a great game will bring the next billion users into crypto.

(they also raised a $600 million fund for that very purpose)

So how do you get exposure to this trend?

Crypto games exploded onto the scene in 2021. Most have crashed and died. But the industry’s not going anywhere.

Here are 4 ways to get involved…

Method 1: Invest in the games themselves.

This means buying the NFTs and tokens of existing or upcoming games, like Wildcard, Axie Infinity, Illuvium, Deadrop, etc.

This carries risk because no one has yet figured out how to make NFTs and tokens entirely sustainable in an in-game economy.

But it gives you the chance to own the next Pokémon before it takes off.

Method 2: Buy the tokens of the blockchains and platforms that power the games.

This is a classic pick-and-shovel play. There are lots of companies building infrastructure to support the eventual explosion in crypto gaming, including -

Avalanche ($AVAX)
ImmutableX ($IMX)
Polygon ($MATIC)
Ronin ($RON)
GALA ($GALA)
Sandbox ($SAND)
TreasureDAO ($MAGIC)
Decentraland ($MANA)

… and a lot more.

These carry less game-specific risk (and less upside) but could be good ways to capture the ecosystem-wide growth.

Method 3: Buy the tokens of launchpads that launch games.

Some crypto games raise tens of millions of $$ upfront and launch directly to the public.

Others grow slowly and incrementally raise small amounts of money to fund different stages of their development.

In crypto, some of these go through launchpads. They’re places to get exposure and $$ from existing communities.

There are a lot of famous launchpads, like Fractal, Magic Eden, Seedify, Polkastarter, DAOmaker, etc.

Some of these have tokens; others don’t.

They probably carry greater operational risks than platforms and blockchains from Method #2 - but in a crypto gaming bull market, a rising tide lifts all boats.

We recently gave a class to Coinbase employees on crypto gaming.

In future newsletters, we’ll give you the rundown of what we said, along with our favorite games and platforms in the space.

So stay tuned 👀