As mobile gaming grew its share of the global games industry, the free-to-play business was booming. Following a model of onboarding first and monetization later via in-app purchases, F2P quickly carried the industry to new all-time highs. To put things into perspective, in 2022, Game of The Year winner Elden Ring amassed approximately $790.6M in primary sales revenue (not including deluxe editions, IAPs, and discounts). Genshin Impact, on the other hand, a completely F2P game, made roughly $1.8B during the same period.

It is for this reason that the number of F2P games released each year is increasing. Not only are the days when disgruntled gamers protested the release of horse skins far behind us, but today’s players have embraced certain IAPs, such as in-game cosmetics, to such an extent that they generate more revenue per month than some of the highest-rated games make in a year. NewZoo states that 85% of US gamers between the ages of 13 and 45 are aware of in-game cosmetics, with just under half claiming they use them.

There is relatively little professional data on the total size of the skins market. However, consumers spent an estimated $67.9B on digital in-game purchases in 2022. DMarket, a blockchain-based skins marketplace acquired by Mythical Games in 2023, estimates the cosmetics market to generate $40B annually. 81% of US gamers want to get real-world money for their cosmetic items, and 75% of those interested in real money trade stated that they would spend more on skins if they had real-world monetary value.

This report will analyze the current market trends, explore the potential for future growth, and pose the question: Are NFTs needed to drive increased value back to both players and developers?