There is no shortage of writing these days about the emergence and disruptive powers of blockchain technology, bitcoin and cryptocurrencies. My apologies for adding to that growing mass, but hopefully this piece will make a point or two that adds to the broader story of why media companies should watch the crypto space very carefully. I believe they will be watching their own future.
Just like noted venture capitalists Fred Wilson, Brad Burnham, Albert Wenger at Union Square Ventures (early backers of Coinbase and Dapper Labs), I subscribe to the notion that crypto will usher in a next phase of enormous technological disruption and advancement in society and business that will eclipse what we have seen from the Internet over the past 25 years.
I believe that thesis will very much apply to the world of media. Just look at the South Vietnamese-created video game Axie Infinity, a free-to-play Pokemon-style multiplayer game where gamers’ “Axies" monsters battle each other as they evolve and grow. Each Axie is unique and represented by its own NFT (non-fungible token) and gamers buy tokens to transact, to buy land and Axie breeding rights, to buy and sell Axies, and to vote in game governance.
The game has 10 million-plus players today, with almost one-half of them in the Philippines, and now generates more than $200 million of transactions per month. Yes, it’s that big.
Not only can players “play-to-earn” tradable points, but many tens of thousands of them are now “playing to work,” building and selling their unique Axies to others players and fellow breeders for thousands of dollars, and significantly supplementing their incomes as farmers and laborers.
For sure, Axies may end up as another flash in the plan. We’ve seen that before. However, regardless of its fate, what Axie Infinity represents cannot be put back in the bottle, and should cause all in the media ecosystem to think long and hard about what their businesses look like in a world that is increasingly driven by crypto markets.
Just think, with less than $10 million of capital, Axie Infinity built a very efficient platform for creators to make, sell and buy unique intellectual property at a scale and speed that we have never seen before. Its economy and governance are decentralized, which means it doesn’t depend nearly as much on big third-party distributors to reach users and build customer relationships with them, compared to most app businesses.
Finally, the network effect in attracting and retaining tens of millions of gamers and audiences that can be built and supported on a platform like Axie -- or other gaming platforms with their own proprietary currencies like Fortnite and Roblox and their hundreds of millions of players -- cannot be ignored if you are in the business of provisioning consumer contact, the fundamental core of being a media business.
I’m not saying that you need to be buying and selling bitcoin, but I am saying that you should go build an Axie or buy a Top Shot -- and imagine what it could mean for your business.