Let’s first take a look at the market scale of several popular business models that are currently combined with NFT in traditional fields.
In the “Art Market Report 2021" written by economist Clare McAndrew, he mentioned that the art market has shrunk by 22% in 2020 due to the pandemic, from $64.4 billion in 2019 to $50.1 billion in 2020.
According to Newzoo’s “Global Games Market Report 2020", the global games market revenue in 2020 will reach $174.9 billion, and the total number of players has reached 2.68 billion in 2020. By 2023, this figure will increase to $217.9 billion and $3.05 billion respectively. The 2020 revenue of console games is estimated to be $51.2, a YoY increase of 21.0%, more than twice the previous figure estimated by Newzoo.
The combined market size of the two has exceeded one trillion Chinese Yuan. However, such a calculation method seems too simple and rough to accept. What is the actual current situation of the NFT then?
According to Dapp Radar’s February industry report, the NFT market transaction volume has exceeded 340 million U.S. dollars, setting a new record. Among them, NBA Top Shot has the largest share, with transaction volume exceeding 225 million U.S. dollars.
At first glance, it seems that it is way too early to say NFT is the next a trillion market, but it is worth noticing that the current number of users of the global NFT platform is only less than 400,000, which contributed $340 million to the market market, with per capita consumption at $850, far exceeding that of traditional game market which is $65.
Therefore, the traditional business model combined with NFT will bring very considerable benefits. With the popularity of NFT in the future, if the number of people participating in NFT reaches 10% of the current number of global players, then the market brought by NFT will exceed the current game market, and we have every reason to believe that the NFT market can reach trillions.
(The search volume of the term “NFT” on Google has reached the highest point)
So, why can NFT be so powerful? It is because some of the features of NFT itself may bring changes to the business world.
First, when combined with NFTs, traditional business models can greatly affect the entry barriers and attract more people and funds to participate. For example, in traditional art auctions, only a small number of people can participate. In contrast, the result of NFT+ artworks is that anyone in the world can participate in the auction of NFT artworks, and the increase in number of participants can help the auction price reach a higher level. At the same time, NFT is not limited to master-level works, anyone can combine NFT with your own works and put it on auction. Although they are not comparable to master works, still, they will not only bring numerous auction objects to the market, but also provide a great number of small auction markets.
Second, NFT can capitalize virtual items that are not tangible, and bring a huge market – virtual item trading market. For example, gold coins and other items of online games are often traded in the in-game market, and they can hardly be monetized. However, if it is an NFT game, the virtual assets obtained, such as equipment or gold coins, can be cashed out. It will grow into a huge market that explores a new way to generate revenue.
Third, combining with offline entities can quickly achieve monetization. NBA Top Shot is a way to monetize NBA’s official influence. An officially authorized digital asset can be naturally added with scarcity value due to a certain mechanism, such as a card opening mechanism (similar to a mystery box, with a lower probability of rare cards). Scarce assets, coupled with an open trading platform that anyone in the world can participate in, can reach a sky-rocketing price. Not only companies but also individuals can realize their influence in a timely manner. The aforementioned encryption artist Beeple is an excellent example. After all, the total amount of his works has been sold for more than 100 million US dollars.
The above are just some of the features of the current NFT, but the existing NFT business model is still in its early stages, and there are even opinions saying that “everything can be NFTized” in the future. If it can be achieved in reality, more markets will be explored. Then, the estimated market size of NFT will no longer be limited to a trillion-level market.
