Author: lesley@footprint.network
The crypto markets experienced increased volatility in August, with bitcoin trading in a range of $23,664 to $30,057. In comparison, the gaming sector remained relatively calm, but there has been a growing shift in perspective toward Web3 games from a more macro perspective.
Many institutions and gaming veterans now acknowledge that the essence of Web3 games isn’t just about exploiting users in a Ponzi scheme but rather providing entertainment that revolves around the gameplay itself. While the allure of quick wealth accumulation remains, the focus on financial speculation within the Web3 gaming sphere is diminishing.
As gaming, NFTs and the metaverse continue to merge, significant IP moves during the bear market offer pleasant surprises. Established gaming giants such as Sega and Sony are developing more advanced experiences and attracting mainstream gamers, underscoring the long-term potential of Web3 gaming, which is coming into sharper focus.
Still, risks and uncertainties remain for this emerging disruptor. As the speculative frenzy cools, the sector continues its gradual maturation as participants adopt a more balanced perspective, prioritizing entertainment over profit.
Data for this report was obtained from Footprint’s GameFi research page. An easy-to-use dashboard containing the most vital stats and metrics to understand the Web3 Game industry, updated in real-time, you can find all the latest about prices, projects, funding rounds, and more by clicking here.
Key Points
Crypto Macro Overview
- In August, Bitcoin experienced a wide range in value, fluctuating between a monthly low of $23,664 and a high of $30,057.
Overall Web3 Game Market
- The Web3 gaming landscape is on the rise, with the number of games increasing from 2,471 to 2,540, signaling significant growth.
- Games such as Carrom Blitz and Trickshot Blitz have been influential in shaping market trends, resulting in a weekly growth of 15% increase in overall market activity but then falling back.
- The market is currently dominated by large IP-based or corporate-led projects
Web3 Game Chains
- Among games with over a thousand monthly active users on these chains, BNB Chain has 5.3% of the total games on it, Ethereum represents 1.6%, and Polygon is the best with a 10.2% share.
- While SUI’s technology has merit, it hasn’t yet translated into sustained organic adoption and usage.
GameFi Projects Overview
- CryptoTycoon has been the standout performer in the project, boasting an impressive 200.23% price increase of its token in this month alone.
- Notable projects in a similar category include NFT Worlds, which has seen a 68.23% increase in value this month and a remarkable 578.31% increase since the beginning of the year.
GameFi Investment and Funding
- Notably, the fusion of e-sports with web3 projects, exemplified by platforms like Sorare, is also flourishing in the market.
- In addition, artificial intelligence (AI) continues to make headlines after the hype.
What’s new in this month?
- Footprint Analytics and COMBO Join Forces to Drive Data-Driven Revolution in GameFi and Web3
- Mahjong Meta Secures $12M in Funding Round Led by Dragonfly
- Game Engagement Platform Developer Conductive.ai Closes Seed Round Led by Animoca Brands
- Digital Entertainment Asset (DEA) Secures Funding from ‘KDDI Open Innovation Fund’ for Web3 Collaborations
- Hungri Games Raises $1.9 Million in Seed Funding at $23 Million Valuation
- a16z-backed AI video generator Irreverent Labs raises funding from Samsung Next
- Roblox Is Tapping AI to Generate ‘More Rich and Dynamic’ Games: CEO
Crypto Macro Overview
In August, Bitcoin experienced a wide range in value, fluctuating between a monthly low of $23,664 and a high of $30,057. The month began with a brief spike to $30,000 USD on August 1. This spike was triggered by the filing of five ether (ETH) futures exchange-traded fund (ETF) applications. The excitement was short-lived, however, as both BTC and ETH soon retreated, influenced by broader market weakness following the U.S. government’s credit rating downgrade.
On August 8th, Bitcoin made another attempt to break through $30,000, possibly supported by the launch of PayPal’s new stablecoin, PayPal USD (PYUSD). Unfortunately, bitcoin experienced a sharp downturn shortly thereafter, falling to nearly $25,000 USD. This decline was driven by a number of negative events, including reports of significant BTC sales by SpaceX, the Evergrande crisis in China, and a massive $1 billion liquidation in the crypto derivatives market in a single day.
However, before the end of August, a U.S. appeals court ruled in favor of Grayscale in its lawsuit against the SEC, causing the price of Bitcoin to spike from $26,000 to over $28,000, but eventually stabilizing around $26,000.
Overall Web3 Game Market
The Web3 gaming landscape is on the rise, with the number of games increasing from 2,471 to 2,540, signaling significant growth. However, it’s important to note that games with more than 1,000 monthly active users are still a relatively small percentage, hovering around 9% of the total number of games. This highlights the ongoing challenge of user acquisition in the current bear market for Web3 games.
For players familiar with Web2, managing private keys and using digital wallets can be a daunting task. To succeed, Web3 games should prioritize providing a seamless user experience where players don’t have to distinguish between Web2 and Web3. According to de Tychey, President of Ethereum France, the focus should remain on enjoying the gaming experience.
Games such as Carrom Blitz and Trickshot Blitz have been influential in shaping market trends, resulting in a weekly growth of 110,000 active users and a 15% increase in overall market activity but then falling back. Both games are developed on the Flow blockchain by Joyride. However, other metrics such as transactions and volume haven’t shown similar periodic growth, suggesting that while these games are driving engagement, they may not be significantly impacting user spending.
The market is currently dominated by large IP-based or corporate-led projects, similar to the approaches of Animoca Brands and Yuga Labs. nWay, a game developer under Animoca Brands, is licensing IP from Yuga Labs to launch a new fighting game. This trend extends to gaming giants such as Bandai Namco, which is entering the space with an AI virtual pet NFT game.
Web3 gaming is growing with significant intellectual property (IP) integration. Many industry giants, including Sega and Sony, have entered the space, bringing their vast experience in game design and architecture. As they fully realize the potential of these technological innovations, they are likely to take significant action.
In contrast, smaller companies and startups are proceeding cautiously, trying to navigate and survive the prolonged bear market.
Web3 Game Chains
The distribution of games across different blockchains remains basically unchanged, with BNB Chain leading the pack, followed by Ethereum and Polygon. Among games with over a thousand monthly active users on these chains, BNB Chain has 5.3% of the total games on it, Ethereum represents 1.6%, and Polygon is the best with a 10.2% share.
According to SuiVision, the Sui blockchain experienced a dramatic decline in daily transaction blocks after reaching an all-time high of 65.84 million on July 27. By August 2, daily transaction blocks on Sui had dropped to approximately 1.479 million, or only 2.2% of the peak. A similarly sharp decline can be seen in the number of daily active accounts.
This decline is particularly related to the end of MystenLabs’ first Bullshark event on July 28, which spurred significant usage of the SUI 8192 game on the blockchain. While events like the Bullshark campaign have been successful in raising awareness and driving initial usage of the SUI blockchain, it has struggled to establish lasting habits and user retention.
While SUI’s technology has merit, it hasn’t yet translated into sustained organic adoption and usage. Tracking organic usage patterns, without relying on incentives, will be critical to assessing the blockchain’s true traction and market fit over time.
Layer 2 public blockchains such as opBNB and Starknet are also attracting attention in the gaming sector. However, the available data doesn’t currently show significant trends on data.
GameFi Projects Overview
CryptoTycoon is a lightweight DeFi gaming platform built on top of the BNB chain. Its token has been the standout performer in the project, boasting an impressive 200.23% price increase this month alone. Since the beginning of the year, the token has increased in value by 76.59%. Tokens that consistently show long-term growth in a market as hyped as this one are indeed noteworthy.
Notable projects in a similar category include NFT Worlds, which has seen a 68.23% increase in value this month and a remarkable 578.31% increase since the beginning of the year. Another notable project, Fabwelt, has seen a 25.76% increase in price this month and an impressive 466.78% increase in value year-to-date. These sustained growth rates underscore the potential of these projects and their ability to attract investor interest in the dynamic world of cryptocurrency.
GameFi Investment and Funding
Investment continues to flow into the Web3 gaming sector, with five significant funding rounds attracting considerable attention. These rounds include significant investments in companies such as Mahjong Meta ($12 million), Conductive.ai (undisclosed), Digital Entertainment Asset (undisclosed), Hungri Games ($1.9 million), and Irreverent Labs (undisclosed).
Notably, the fusion of e-sports with web3 projects, exemplified by platforms like Sorare, is also flourishing in the market. This month, Mahjong Meta’s impressive $12 million funding round stands out, underscoring the growing excitement around the integration of traditional games like mahjong with the cutting-edge world of Web3 gaming.
In addition, artificial intelligence (AI) continues to make headlines after the hype. Many major companies are exploring the synergy between AI and Web3 technologies, with Irreverent Labs playing a leading role. As a developer of metaverse games, Irreverent Labs recently secured a new round of funding led by Samsung Next, signaling continued interest in AI-powered ventures. Irreverent Labs views its game, MechaFightClub, as a large-scale machine learning model, and plans to allow users to create videos using various input methods, such as images, text, and audio, by the end of the year. This reaffirms the ongoing importance of AI in both the technology and gaming industries.
This piece is contributed by the Footprint Analytics community.
ABGA
A non-profit, blockchain alliance, co-sponsored by leading institutions in the gaming industry. We are optimistic about blockchain games, NFTs and Metaverse, and we are taking the initiative to support ABGA-related activities and investments.
Footprint Analytics
Footprint Analytics is a data platform blending web2 and web3 data with abstractions. We help analysts, builders, and investors turn blockchain data into insights with accessible visualisation tools and a powerful multi-chain API across 20+ chains for NFTs, GameFi, and DeFi. We also provide Footprint Growth Analytics to help with effective growth in GameFi and any web3 projects.