To understand where Passage is headed, we can look at two major economic shifts driving the concept of the Metaverse forward: the creator economy and the rise of social gaming.
The "creator economy" is a business model in which individuals create and sell content, products, or services on the internet. It encompasses a wide range of activities, from blogging, podcasting, and vlogging, to music production and software development.
The creator economy is also defined by the cycle of creators getting noticed on platforms like YouTube, Twitter, Instagram, and TikTok, then building a business around their audience with Lego-like infrastructure (think Stripe for payment processing, Shopify for hosting an online store, etc.).
At least 50 million people worldwide consider themselves creators; of those, 46.7 million consider themselves amateurs. After investment in the creator economy topped $5 billion in 2021, the industry is now estimated to be worth over $100 billion.
From Linktree’s 2022 Annual Creator Report
The platforms available for creators to launch on are crowded and predominantly focused on similar features: video, audio, image, and text posting.
We believe there is a significant demand in the marketplace for platforms that are meeting unmet audiences, and there is one audience in particular that is poised for explosive growth.
Access to mobile devices has created explosive growth in the games market in recent years. In 2020, mobile gaming generated the highest revenue in the global gaming market, which amounted to $77.2 billion. (Wijman, 2020)
While playing games has become more accessible, creating them has remained complex. It takes years of development experience with complicated game engines and other 3D software to create games.
This is not too different from the film industry. In 2006, you still needed knowledge of complicated software and cameras in order to make video content like films and commercials. Today, everything from filming, editing, and distribution can be done with one device and one application like TikTok.
Consider this example that was recently shared with our team:
“Two close friends were contracted to work with Coca-Cola to produce commercials. One was a creator on TikTok who filmed with a couple friends and an iPhone. This filmmaker edited hers directly on her phone, while the other filmmaker used a full crew, production kit, and camera package and spent several days with an editor. Both filmmakers received the same five-figure pay for their projects. Video production has been democratized, and gaming is likely next.”
There are many game engines that are focused on trying to make creating games easier, such as Unreal Engine, Unity, and Godot. Unity in particular launched with the stated mission of democratizing game development. While all of these platforms have made huge strides, they still take a considerable amount of time to learn, and the process of getting your game published holds many hurdles.
The top mobile game by consumer spending is Roblox, a game whose revenue model depends on user generated content. This is the creator economy at work. Roblox is a game that makes it easy for players to create games inside of it. As of January 2023, Roblox has a market cap of 18.83 billion dollars, and its revenue for the twelve months ending September 30, 2022, was $2.215 billion, a 33.39% increase year-over-year. Roblox annual revenue for 2021 was $1.919B, a 107.73% increase from 2020.
According to NPD, of U.S. children ages 2–17 (64 million) play video games, and 73% of Americans ages 2 and older play video games like Roblox. The next generation will not only be native to the creator economy, but they will also be native to online games like Roblox that allow them to participate as creators.
As more creators enter the market and artificial intelligence (AI) tools begin to simplify the process of creating assets, the demand for a “game creator"-focused social platform will explode.
But this isn’t just a young person’s trend. People aged 45–54 account for 63.3% of in-app purchases up to $10. Those aged 55–64, while making up the smallest audience, purchase at a rate of 77.8%.
There is a significant and growing demand for games, and the creator market is primed to be able to meet it—but they will need easy-to-use tools, similar to what creators enjoy on TikTok.