Big tech giants such as Microsoft, Tencent, Sony, Nintendo, and others joined the Web3 space in the past two years. A new report from crypto analytics firm Coingecko dives into the sector and the projects backed by these major companies to answer a question: how are they investing in the nascent industry?
How Microsoft And Nintendo Are Investing In Web3?
According to the report, Microsoft and other big tech companies employ different strategies to inject capital into the Web3 space. The data reveals that most companies, or 75.9%, chose a “measured and indirect approach.”
In that way, the investors can cover themselves in case of “adverse headlines” or if the project faces any particular challenges while keeping the benefit of backing blockchain-based companies. In other words, Nintendo and others can leverage the technology without exposing themselves to bad press.
Other major tech companies, such as the China-based Tencent and Unity Software, are pouring money into developing the infrastructure to run blockchain-based projects. The report highlights that their effort goes from developing tools to supporting blockchain developers to build on them.
Some of the projects these companies support include WeMade, a blockchain game producer; a metaverse company called Morpheus Labs; Startale Labs, a Web3 incubator; a joint venture between Game Freak and Nintendo; and much more.
Overall, over a dozen projects are receiving support from some of the top tech companies in the world in some capacity. The report also highlights some of these projects’ obstacles, including ambiguous regulations, developing a compelling product, and moving into mainstream adoption.
Gaming Sector Embraces Web3
While the Web3 space has grown, the sector is still relatively small. The report shows that the entire market cap of gaming tokens is around $5 billion, while the top 10 video game companies launching a project in the nascent sector have a combined market cap of $3,219 billion.
29 out of 40 big videogame companies, or around 72% of the sector, have ventured into the Web3 space, underscoring its relevance despite the persistent downtrend in the crypto market. Take-Two Interactive, Ubisoft, Bandai, Square Enix, and others are developing their blockchain gaming projects, as seen in the chart below.
However, only a handful of these are ready to launch this year, while others are set to debut as soon as 2024 and beyond. The report stated:
On the flipside, the adoption of blockchain technology by established video game companies has been relatively slow, attributed to concerns such as scalability, market acceptance, regulatory uncertainty, and past security breaches in previous blockchain games.
As of this writing, ETH’s price trades at $1,630 with sideways movement in the last 24 hours.
Cover image from Unsplash, chart from Tradingview