Winner from accelerating structural growth
We see Decentral Games as well positioned to capitalize on three compelling structural growth themes (1) rising online gambling penetration globally, (2) play-to-earn gaming, (3) and the metaverse. We believe that blockchain solutions will capture a growing share of the online iGaming market, with a potential GGR (gross gaming revenue) of $15b, and believe that DG will be one of the top operators in the space. More immediately, we see DG benefiting from growing interest in P2E gaming and the metaverse.Rising penetration of online gaming
Globally, online penetration in gambling stands at only 16% (45% in sports betting; 8% in gaming), having doubled over the last decade. Online penetration has historically been increasing by around 2pp per annum over the last five years underpinned by technology, product development and mobile proliferation. COVID-19 has further shifted players online. We assume that iGaming GGR will eventually account for around 30% of total GGR and that blockchain games will conservatively take around 10% of the iGaming addressable market, a $15b opportunity.Play-to-earn
The video game industry has moved from pay-to-play, to free-to-play, and now we have play-to-earn (P2E). DG players earn $DG rewards for playing games in proportion to their wager amount (paid in MANA or DAI). While most online iGaming companies provide free bets, DG rewards users in $DG, in effect a share of the company’s Treasury. With players “owning the house” DG should enjoy a competitive advantage in customer acquisition and retention. Moreover, DG’s ICE Poker, allows the NFT-owning players to delegate their chips to other players, in exchange for a share of the winnings. Much like the success that Axie saw in attracting players, ICE Poker is allowing players to earn an income from playing the game. Metaverse
The Metaverse is a virtual world where people can socialise in real-time and develop a user-owned, sustainable digital economy. One of the leading blockchain-based virtual worlds, Decentraland, is a metaverse where users can play games, earn Mana, purchase LAND or other collectibles and, in short, generate value for their time spent in-game. Decentral Games owns over 1,000 LAND parcels within Decentraland and operates several casinos on its land. Decentral Games benefits from rising user growth within the Metaverse, in addition to asset price appreciation on its land holdings, which are held in the DaoTreasury. Catalysts
- Growth in Decentraland user base
- New Casino openings and new games leading to rising GGR
- Adjacent cross-sell opportunities into live events, sports betting etc.
- P2E driving income generating opportunities, player acquisition and retention
- Regulation around gaming rights, taxation etc.
- Decentraland - DG currently only operates within Dencentraland