February 7, 2023
Despite the chronic bear market, developing countries in Latin America (LATAM) and Asia have emerged as the new major markets for cryptocurrencies and especially web3 games. Based on their high crypto adoption rates and the strong foundation of the user community, talent, and/or regulation foundation, these are the countries with high potential to be the leading markets for GameFi adoption:
1. Vietnam
2. The Philippines
3. India
4. Brazil
5. Thailand
Vietnam has the foundation needed to facilitate a strong gaming economy. It is home to 68 million smartphone users and has become a key market for mobile gaming growth.
Investing in cryptocurrency is also something many people in Vietnam show positive sentiment toward and use in parallel to other investment options. This has resulted in Vietnam being a leader in crypto usage. In 2021, Vietnam held the top spot for the second year in a row, showing very high purchasing power and population-adjusted adoption.
The market also hosted the development of many successful gaming projects in web3, most noticeably Thetan Arena, Faraland, Axie Infinity, etc.
The Philippines’ dynamic gaming community has contributed significantly to the growth of web3 games. The country’s GameFi community is so robust that Axie Infinity founders even credited most of the game’s success story to Filipino gamers. For most gamers in this country, GameFi models, such as Play-To-Earn (P2E), offer an alternative way to make a living, especially when Covid-19 peaked.
Since the P2E phenomenon blew up in 2021, many web3-related events have been held in the Philippines to encourage innovation and growth. Noticeably, the recent Philippine Web3 Festival, where global leaders in the web3 gaming space come together, indicated how important the Philippines market is to the growth of the industry.
India is currently home to half a billion gamers, with nearly one-fourth of them being paying customers. Many Indian entrepreneurs have seen this opportunity and jumped on it. According to research firm Tracxn, web3 games in India have been able to raise a total of US$620.5M in 2022 across 32 deals. One of the most noticeable cases is of the NFT gaming startup Rario, raising $120M in Series A funding.
The country also offers a hub of game development talents. The majority of western AAA games are predominantly developed by Indian developers, which makes it one of the best places to start a gaming company.
Brazil is one of the most promising countries in LATAM for crypto and NFT game development. Brazilian users see investment in crypto as a way to secure and expand their earnings (a view shared by Thomaz Fortes, the crypto lead at Nubank). It is not a surprise that Brazil is considered the highest-ranking crypto market in the region and the seventh-largest worldwide.
Recently, the President of Brazil has also signed a bill to legalize and regulate the use of cryptocurrencies as a payment option. This move will promise greater crypto adoption in the country and in LATAM at large.
In Thailand, the existence of regulations for crypto paves the way for GameFi development. According to the Bank of Thailand’s report, the country witnessed the volume of domestic crypto trade increase 17-fold (from US$143 million in 2018 to US$2,589 million in 2020). This is thanks to growing regulatory clarity brought about by the government, with the country being one of the world’s first to regulate digital asset offerings.
Thailand has witnessed the development of many web3 game firms, most noticeably GuildFi, a web3 platform that supports game onboarding and connecting with new players. Upon its partnership with global game creators, the company received US$6 million in funding from Animoca Brands in 2021.
Serving markets in LATAM and Asia better requires web3 games to offer the local payment methods popularly used in these regions. Credit card penetration rates are low (less than 30%) while transaction success rates are high (over 70%) in these countries, which makes it hard for games to monetize from gamers in these regions. With the right local payments solution, web3 games can grow their revenue by 5x and their crypto community exponentially.
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