Cryptokitties is a viral collectible game. In the game you get to own virtual kittens and breed them once a week to create rare varieties. Since ownership of the kittens is secured by Ethereum blockchain it is possible to trade kittens between the players. The most expensive sale to date was one virtual kitty for 246.9 ETH, or roughly $117,000. It is also possible that the owner bought this kitten from themselves to hype up its value and bring media attention.
Games and jokes aside though, the game quickly became the most active smart contract in the whole network. As of writing this text, cryptokitties is responsible for 11% of the whole transaction volume processed by ETH miners.
This is a great success story for the company that made the game. In spite of that, it will most certainly be forgotten in a couple of weeks/months, just like the famous Pokemon GO was abandoned within months of gaining worldwide popularity.
Even if this game will be forgotten the precedent that it created won't be. The game has demonstrated that there is a big market for branded collectible items. If, for example, Disney, Marvel or Nintendo decide to create a collectible game on Ethereum blockchain it will surely get big popularity and will be able to attract a lot of capital.
For the rest of us who don't care about the game the consequences so far are entirely negative. Within days Ethereum's gas price has skyrocketed from 1 Gwei to 16 Gwei, meaning all transactions on the whole network became 16 times more expensive overnight.
We will be closely monitoring how this situation develops.