Last updated on March 19th, 2023 at 04:42 pm
Generation Z is the name colloquially ascribed to the cohort of people born after 1996 that are next in line to be the dominant cultural and economic driving force globally. In many ways distinct from the Millennials, who came of age during the economic hardships of the great recession, Generation Z are unique due to the fact they are the first generation to have grown up in a world fully permeated by the internet. This means that Generation Z are far more computer literate than older generations, and have their expectations defined by this fact. As of 2020, 98% of Gen-Z members own a smartphone, compared with 92% for Millennials, 79% for Generation X and just 55% for the Post-War Baby Boomers. Generation Z are most likely to access entertainment through online means, and spend the majority of their discretionary money on such services, including subscription platforms like Spotify and Netflix.
E-commerce is feeling the impact of this generation entering the workforce, with the cohort accounting for over 40% of US consumers. 2020 was the biggest year ever for online commerce, with 4.2 trillion dollars in online retail sales recorded. Organizations at the forefront of this sector, such as commercial giants Amazon and China’s Alibaba, are making concessions specific to the demands and expectations of the “always online” generation. This includes increasingly streamlined payment and delivery processes, and support of mobile payment structures and digital wallets which are the most common means of transactions among this demographic, especially in developing markets.
Another sector that is experiencing the impact of this new consumer force is the global gaming segment. Activision’s Call of Duty franchise is cumulatively the most successful game series of all time, earning the company nearly $10 billion globally, with $3 billion made in 2020 alone. The blend of familiar FPS arena game play and regular serialized yearly editions have secured its place as a major force in modern gaming. Part of the franchise’s enormous success is in identifying the type of digital products it can sell on to players, such as character customization and upgraded in-game features. In terms of the Call of Duty titles Modern Warfare and Warzone, Activision has sold over $500 million of such micro-transactions to its customers to date.
Other game sectors that have been more traditionally associated with brick-and-mortar enterprises, such as casino gaming, have also adapted to the shift in consumer demands. Online casinos are afforded greater promotional flexibility over physical locations due to the nature of their medium. They can offer a variety of features that appeal to professionals used to accessing mobile services, which can range from daily jackpots, to free spins or one-time bonuses for new players. The online segment of the worldwide casino market is growing rapidly, and now accounts for over 25% of total worldwide casino revenue. Projections point to this particular market growing at 11% year on year towards the end of the decade, which matches similar trends in digital and streaming iterations of traditional sectors like film and television.
All of this points to an emerging trend that will truly set apart the digital consumer of the future from those who came before. As life is increasingly oriented towards online interaction, with Gen Z spending on average 3 hours a day on social media, fully digital products are becoming valuable in their own right. The challenge until recently has been in overcoming the ease of replication in digital mediums that has hitherto hampered attempts to monetize such products. Non-Fungible Tokens, more commonly known by the abbreviated term NFT, offer the solution to this challenge. Built upon blockchain technology, they enable digital property to retain a unique signature that can be traded while maintaining its scarcity. This translates to them being able to retain and even gain value.
Recent high profile examples of NFTs in action include Twitter CEO Jack Dorsey’s sale of his (and Twitter’s) very first tweet for $2.9 million. Digital artist Beeple, known for creating unique artwork every day, rocketed to the top of the most valuable artist list in March 2021 when he sold his entire digital oeuvre as an NFT for $69 million to a collector. More down to earth, Kings of Leon released their latest album as an NFT, the first of its kind. The purchase of their NFT includes limited edition vinyls and front row seats at future Kings of Leon shows. In a world where recording artists stand to make only $00.06 in royalties from individual song plays on Spotify, NFTs represent a tantalizing glimpse at the revitalization of media that has been struggling to adapt to the new digital paradigm, and holds out promise for a better experience for the Gen-Z fans and creators alike who will be at the forefront of utilizing this technology.
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