Can Google's major policy update Web3 usher in a large number of Android users?

Author: Meta Era, Kaishek

1. Google Play Policy Introduction

As the largest Android app store, Google Play has billions of users and offers more than 2 million mobile apps and games. However, as of July 12, 2023, Google has updated its Google Play Store policy regarding NFTs and blockchain games, making some important changes:

• Google announced an update to the Play Store policy to allow apps and games containing NFTs to enter the platform.

• New regulations require games that use tokenized assets to clearly state that they use blockchain elements.

• In order to protect the reasonable rights and interests of users, Google will prevent developers from exaggerating the potential benefits brought by NFT.

• The new policy also prohibits any "loot box" mechanics that violate the Gambling Eligibility Requirment.

• Reddit partnered with Google to create this policy, which aims to create a level playing field that promotes user trust and responsible use of blockchain technology.

It’s important to note that Google has taken a tough stance on blockchain-based applications in the past. In 2018, Google banned cryptocurrency mining apps and has upheld the ban. Recently, however, Google has allowed decentralized data storage app ArDrive Mobile, and has included blockchain game Axie Infinity Origins in some markets in 2022. In addition, Google Cloud also announced in April 2023 that it will help developers build applications on Polygon to speed up the entrepreneurial process.

Through this change in Google Play policy, it can be seen that Google has begun to actively embrace Web 3.0. So what prompted Google's attitude change? On the other hand, as the same technology giant, Apple also owns the world's top mobile phone application market, what kind of attitude does it hold? What will Web 3.0 bring to Google? And how will Google affect the development of Web 3.0? We will explore these questions next.

2. The similarities and differences between Apple and Google's attitude towards NFT

As a technology giant at the same level as Google, Apple's policy attitude in the field of blockchain and NFT is also worthy of attention. As early as October 2022, Apple clarified the restrictions and rules on the use of non-fungible tokens (NFT) and blockchain games through its new guidelines for the App Store:

**NFT Trading:**Apple clearly states that apps can use the in-app purchase function to sell NFTs and related services, such as minting and transferring these tokens.

**NFT and related content:**NFT assets can be browsed and used within the corresponding app, but cannot be used to unlock further features or content. Apple prohibits the use of NFTs as a means of accessing unique parts of an app, such as a membership access card to enter an app.

Payment Mechanism: For NFT transactions, users must use Apple's in-app payment mechanism. Since Apple does not support cryptocurrency payment options, this method cannot be used for payment. Apple takes as much as 30% of in-app payments. This limits the types of services that can be offered involving NFTs, and makes pricing NFTs problematic as in-app purchases must be made using a preset price (eg, $14.99), which doesn't match the mechanics of market dynamic pricing.

Cryptocurrency and blockchain games: For cryptocurrency transactions, Apple’s guidelines state that apps can offer “transactions or transfers of cryptocurrencies” in countries or regions that have licensed and operated cryptocurrency exchanges.

Overall, while Apple's new policy allows NFTs to exist in the App Store, there are some important limitations, particularly in terms of payment mechanisms and how NFTs interact with app content. In contrast, Google’s policy change this time has almost released all restrictions on blockchain applications. The only remaining restrictions are mainly reflected in two aspects: soft and hard:

**Soft Limit:****Developers must be transparent to users about tokenized digital assets. **If a game or app sells or allows users to acquire tokenized digital assets, developers must clearly state this to players. Additionally, developers must not exaggerate any potential earnings from games or trade events, or promote them to mislead players.

Hard Restrictions:** Blockchain games with a "loot box" mechanism must meet Google's gaming eligibility requirements. **This restriction is harsh because relatively few countries have legalized gambling. The "loot box" mechanism refers to the fuzzy boundary of the value of game items, such as treasure boxes obtained by playing games, items or heroes divided by rarity (such as divided by SR, SSR and other standards). This mechanism is necessary in many blockchain games. However, if the game party stipulates the value of randomly dropped treasure boxes, heroes and other items, it will also involve the problem of game economic regulation. If the regulation is improper, it will easily lead to the collapse of the economic system.

The following is a brief comparison of the blockchain policy between the IOS App Store and Google Play:

Table: Comparison of IOS App Store and Google Play Blockchain Policies

3. The development of Google Play and the change of attitude towards blockchain

What is the reason that prompted Google Play to change its attitude towards blockchain and NFT, and what benefits will the policy change bring to Google Play? Analyze the history and development of Google Play. Since its launch in 2012, Google Play has developed into one of the largest mobile application markets in the world. Although its user scale far exceeds that of the iOS App Store, there is a huge gap in revenue and consumer spending . ** For example, in the first half of 22, Google Play generated about 21.3 billion US dollars in revenue through in-app purchases, subscriptions, etc. This is a 7.4% year-on-year decrease from the US$23 billion in the same period in 2021. In the first half of 2022, the iOS App Store generated approximately US$43.7 billion in revenue through in-app purchases, subscriptions, etc., a year-on-year increase of 5.6% from the US$41.4 billion in the same period in 2021. **

The reasons can be summarized as follows:

• iPhone users have more purchasing power.

• Apple's Policies and Commission System. Apple charges a 30% commission, forcing developers to raise the price of iOS apps. And Google Play's commission is even lower at 15%.

• iOS users are more willing to pay for apps, resulting in more top apps for iOS than Android. For example, in the first quarter of 2019, the revenue of the iOS app store was 1.48 times that of Android. Top developers also earn 64% more on iOS than on Android.

• The game category on iOS has a larger share of revenue, and game users spend more than other categories of apps.

Table: Comparison of IOS App Store and Google Play Blockchain Policies

And allowing blockchain apps to go on the shelves may help make up for Google Play’s disadvantages to a certain extent:

**1. As a non-homogeneous token, NFT naturally has the function of collecting royalties. If top developers publish applications on Google Play with NFT assets, they can significantly increase the income level of top developers. **

2. Even though the encryption market is still in a bear market, and the market value of NFT has shrunk by more than 80% from its peak, the current market value of Ethereum NFT alone is close to 6 billion US dollars. Adding the market value of NFT of Bitcoin, Solana, Polygon and other chains, it should be 70 over US$100 million. **When the encryption market recovers, the market value will expand several times. **

3. GameFi is one of the tracks with the largest financing amount in the blockchain field, which will increase the proportion of Google Play’s game revenue to total revenue to a certain extent.

4. Impact on the blockchain industry

Compared with Google Play's billion-level user scale, the number of users in the entire Web 3.0 world is only a fraction, let alone NFT and GameFi.

Figure: Number of daily active users of chain games Source: Footprint

Figure: Number of blockchain games Source: Footprint

Figure: Number of active blockchain games Source: Footprint

As of July 16, 2023, the average number of daily active accounts on GameFi is about 780,000, and the total number of existing games is about 2,400, of which the number of active games is less than 200.

Figure: NFT’s daily average transaction addresses Source: Footprint

As of July 18, 2023, the average daily number of NFT transaction addresses is only 34,000.

From a long-term perspective, even if the policy change of Google Play can only bring 0.1% conversion to NFT and GameFi, it will also achieve a several-fold increase in the number of NFT and GameFi users. Although Google Play's policy also limits the hype and false publicity of blockchain applications, it is believed that when the bull market returns, it will still bring a large number of new users to the blockchain field, especially blockchain games, because GameFi users are geographically distributed and The distribution of mobile phone models has many similarities with Google Play:

Geographical distribution:

• The proportion of users in Southeast Asia is the largest, and the proportion of users in Southeast Asia will reach 41% in the first half of 2022
• Followed by users in North America and Western Europe, accounting for 16% and 15% respectively in the first half of 2022
• The proportion of users in developing countries is also growing rapidly, such as the Philippines, Vietnam, and India.

Model Distribution:

• iOS device users account for about 15%, and Android device users account for about 85%
• Mobile phone users account for about 95%, while PC users only account for about 5%
• Mobile phones are mainly low-end and mid-end models

In general, Google Play allows blockchain games and NFT applications to enter the platform, marking the wider application of blockchain technology on mainstream platforms, which is of great significance. Google's attitude has shifted from prohibition in the past to an open and inclusive blockchain application, opening the door for the development of blockchain games and NFT applications on the Google Play platform. Developers can now use digital assets to create richer and more immersive user experiences, such as using NFT to realize user-owned game content, which will promote innovation in blockchain games. At the same time, **Google has a huge user base and strong traffic support, providing developers with new platforms and channels to expand blockchain applications to the world, and will accelerate the globalization of blockchain game applications . **

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