Blockchain Gaming Booms in Japan Amid $663M Web3 Fund Launch
In Japan, SBI Holdings has launched a $663 million fund to support startups in Web3, AI, and the Metaverse, with investments from major financial institutions like Sumitomo Mitsui Banking Corporation and Mizuho Bank. This initiative aligns with the Japanese government's plan to establish Japan as a leading startup hub in Asia, promoting the development of 100 unicorns and 100,000 startup companies.
Japanese game developers, including Sega and Square Enix, are actively engaging in blockchain projects. However, Sega has recently cooled off on further blockchain projects following its acquisition of Rovio, while Square Enix continues to move towards Web3 and blockchain technology.
In light of Japan's evolving landscape for Web3 and AI startups, regulatory challenges and tax reforms are becoming key considerations. The Japanese government is working on revising the tax system for Web3 companies, and SBI Digital Asset Holdings is involved in the Monetary Authority of Singapore’s Project Guardian, highlighting Japan's role in shaping crypto regulations. The global blockchain gaming market, valued at over $4.6 billion in 2022, is forecasted to reach around $65.7 billion by 2027, growing at a CAGR of 70.3% from 2022 to 2027.
This surge is driven by the transition from traditional to blockchain-based games, providing players with real ownership of in-game assets and opportunities to earn real-world money, as exemplified by popular Play-To-Earn (P2E) games like Axie Infinity.
However, the industry faces challenges like regulatory constraints, especially concerning cryptocurrencies and NFTs, which could impede growth. For instance, India's 30% tax on virtual digital assets impacts players' earnings in crypto gaming. Another challenge is the limited awareness of blockchain and NFT technologies, which hinders mainstream adoption despite the technology's benefits.
Opportunities in the blockchain gaming sector are evident in the rise of unique active wallets (UAWs) interacting with games' smart contracts. In Q3 2022, blockchain games accounted for 48% of all blockchain-industry UAWs, with in-game NFTs generating sales of $2.32 billion, representing 22% of the total NFT trading industry-wide.
The Ethereum (ETH) platform dominates the blockchain gaming market, but developers are exploring other platforms due to scalability and processing power issues.
Regionally, the Asia Pacific region, particularly Japan, is emerging as a significant market. The Asia Blockchain Gaming Alliance (ABGA) and supportive government regulations are fostering this growth.
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Blockchain Gaming Market
SBI Holdings launches a $663 million fund in Japan for Web3, AI, and Metaverse startups, backed by major financial institutions.
