How can Web3 NFT projects penetrate the market and consumers in 2023 in a situation of particularly aggravated global inflation and economic recession crisis?
After COVID-19, the liquidity party is over and the price of Bored Aped Yacht Club NFTs has dropped by more than 90% compared to a year ago. The price of many altcoins, as well as Bitcoin, has fallen by more than 60%-95% on average compared to a year ago.
Nevertheless, many companies and global brands are participating in the NFT projects. What is the reason?
As of the third quarter of 2022, the following global brands have jumped into the Web3 NFT project.
- Louis Vuitton
- Reddit Inc
- TAG Heuer
- Tiffany & Co.
- National Football League (NFL)
- Hello Kitty
- PUMA Group
- Zara SA
- Balmain And more
South Korean brands are
- SINSEGAE department store
- Emart 24
- NH security
- Amore Pacific ( Cosmetics)
- LG U Plus ( Telecommunication)
- ShinHan Bank
- Kakao Brain
- Lotte Department Store
etc. are preparing or have already announced their own corporate NFT programs.
A notable success story is that Nike generated sales of $185M this year with only NFT alone, of which $92M is said to be royalty sales through resale.
Starbucks, which is the most advanced among them, has officially launched the NFT loyalty program “Odyssey”. The program appears to be one of the pioneering brands of the web3 initiative combined with various gaming experiences for users. These brands seem to be aware that marketing that bundles NFTs and games and applies them to loyalty programs is innovative and cool marketing to invite the MZ generation.
The Starbucks Odyssey program consists of four major components, and it is still in beta.
1. Provide entertainment and additional points through mini-games
2. Provide physical-based rewards such as discount coupons
3. Develop a user community based on common interests and topics related to Starbucks coffee
4. Integration with blockchain-based marketplaces where NFT memberships can be bought and sold (Polygon and OpenSea)
Starbucks Odyssey Program
This NFT membership programs by Emart 24, which is one of the fastest growing convenient store chains in South Korea has been also announced by the SinSeGae Group which combines with gamification and Metaverse as below.
Emart 24 NFT membership programme in South Korea.
However, will brands’ NFT projects continue in 2023, whilst the global recession is seriously kicking in and possibly getting worse?
From a SME (Small Medium Sized Enterprise)’s point of view, the biggest problems in pursuing such an innovative project are cost and ROI (Return on Investment). The problem is that innovation projects have yet to prove ROI returns, which is why more companies are still hesitant about NFT projects.
For example, the cost of building a high-quality branded game (app-native game) is around 50K-100K USD per game on an outsourcing basis. Hiring Web 3 experts and engineers can be very time consuming and costly. For example, a blockchain engineer with 3 years of experience earns an average salary of around 7–10K USD per month, and building a full team of 3–4 people for a Web3 project can easily cost a company $100,000 per month including other ancillary costs for the headcounts.
If you are a marketing boss of a multinational company with strong global brands, global chains and global users such as Starbucks or Nike, having the such budget and trying various marketing attempts could be worth doing it. It improves your brand image as an innovative company and brings these NFT projects at scale, but what about Small Medium Sized Enterprises (SME)?
Due to the high costs and the difficulty of the web3 technology itself, this kind of NFT projects like the Odyssey of Starbucks must be quite difficult for SMEs to initiate.
Lately, we’ve been hearing that many startups and even big tech companies are laying off employees and struggling to survive. No one knows how long this recession could go and how bad it could go in 2023.
However, the following fields of industry could become more vigorous during a recession.
- Branded casual games which are entertaining and educational, free of charge yet giving rewards to end users;
- Royalty program with real benefits that will ease the burden on consumers’ pockets even a little;
- A Metaverse space that allows these consumers to virtually meet with a common theme;
- A safe e-commerce marketplace that allows users to transparently trade memberships & vouchers ( based on NFT) and cash them out.
What if you are able to create an NFT community and loyalty program such as Starbucks Odyssey with just spending a few hundred dollars and achieve your desired marketing goals, and add additional turnover related to your brand’s NFT ? This could be fantastic news for any brand.
Community building based on NFTs, games, and metaverses can be particularly useful not only for digital marketing purposes targeting consumers, but also for internal training by various companies and training for B2B partners. In the current educational environment of corporate training, the conventional training method can be highly costly not only boring to the audience. NOT COST EFFICIENT.
But these innovative ingredients of games, Metaverses, NFTs and most importantly real rewards on NFT can work very effective for corporate training fields.
Since 2016, Emoji Games has been providing Branded Mini-Games, a SaaS platform for gamification used by more than 200 well-known worldwide brands for digital marketing & corporate training. Currently, this Web2-based SaaS is being upgraded into Web3 version powered by Pocket Arena.
On top of the current gamification studio, a Web3-based 2.5D metaverse, NFT mining and loyalty program integration SaaS for brands will be launched in Q1 2023. Then any brand can implement and maintain a web3 loyalty program like Starbucks Odyssey at a very reasonable price with easy UI.
Subsequently, Ethereum & BNB Chain supported layer 2 chain solution (called “Falk”) by Pocket Arena will be offered for free to connect this corporate brand NFT with external marketplaces like OpenSea or so.
Blockchain Web3 technology alone is difficult to stay as a sustainable product/service in the market. Based on the existing service where various contents and technologies are converged, also when a small innovation of Web3 technology is positively experienced by users without them even knowing that it was blockchain technology, then we are already in the Web3 era. I believe the demands for brands will be enormous in 2–3 years time.
Written by Hyong S. Kim, CEO of Emoji Games