Author: stella@footprint.network

Bitcoin experienced a narrow price range in September, with a modest increase of 3.7%. Overall, the Web3 gaming industry is growing, but games with over 1,000 monthly active users still represent less than 10%. The distribution of games across different blockchains remains relatively unchanged, with BNB Chain leading at 30.9%. 

As the Web3 gaming market expands and major players enter the space, the challenges of user acquisition and retention remain significant. The industry needs to address these concerns to ensure sustainable growth and mass adoption. 

Moreover, the distribution of games across different blockchains highlights the need for interoperability and the potential emergence of new chains that could disrupt the dominance of the current leaders. 

The future of Web3 gaming holds both opportunities and challenges, and it will be interesting to see how the industry evolves to meet the demands of players and investors alike.

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 September, Bitcoin displayed a relatively narrow price range, fluctuating between a monthly low of $25,158 and a high of $27,210.

Overall Web3 Game Market

• The Web3 gaming industry is experiencing growth, with a total of 2,607 games available, marking a 2.6% increase from August and a significant 15.0% increase from April. 

• Major players in the gaming industry are increasingly venturing into the realm of Web3 gaming.

• User acquisition, retention, and survival during market downturns are paramount concerns for all players in the Web3 gaming industry.

Web3 Game Chains

• Specifically, on Polygon, 39 games attracted more than 1,000 active users, which represents 8.6% of the total games on the chain, while BNB Chain represents 5.3%, and Ethereum represents 1.5%.

• On September 28, Sui announced the launch of the Web3 game portal Play Beyond which included 18 titles across various genres.

GameFi Projects Overview

• In September, a total of 13 projects experienced a notable surge in token price, surpassing a 20% increase. 

GameFi Investment and Funding

• The Web3 gaming sector continues to experience a steady influx of investment, with eight notable funding rounds capturing substantial interest.  

• Prominent crypto ventures such as a16z have shown signs of engaging in bottom-fishing strategies.

What’s New?

• zkSync Era will soon launch the latest work of the well-known blockchain game project Honor World - "Dream Island".

• Sui launches web3 gaming portal Play Beyond.

• Binance announces cessation of the Sandbox NFT staking and Polygon Network support.

• Blockchain-gaming startup Proof of Play raised $33 million in a seed round, with investors including a16z crypto, Anchorage Digital and Naval Ravikant.

• Strategy Game Experts GamePhilos Raise $8M Seed Funding Round, Led by Web3 Leaders Xterio and Animoca.

Crypto Macro Overview

During the month of September, Bitcoin displayed a relatively narrow price range, fluctuating between a monthly low of $25,158 and a high of $27,210. The month began with an initial value of $25,940 and demonstrated a modest increase of 3.7% throughout the period, closing the month at $26,899.

Source: Market Cap: GameFi Tokens vs BTC

In comparison to the previous month, September witnessed an uptick in both the value and on-chain activity. This increase in on-chain activity could potentially be attributed to new investors positioning themselves ahead of potential regulatory approval for a spot Bitcoin ETF, a development that had made progress in late August.

Additionally, Bitcoin received support from the news that the trustee overseeing the defunct cryptocurrency exchange Mt Gox would postpone creditor repayments until October 2024. The Mt Gox estate currently holds approximately 138,000 Bitcoin, valued at $3.7 billion, and this decision is expected to keep that supply off the market for the foreseeable future.

Overall Web3 Game Market

The Web3 gaming industry is experiencing growth, with a total of 2,607 games available, marking a 2.6% increase from August and a significant 15.0% increase from April. Despite this upward trend in the overall number of games, those with more than 1,000 monthly active users remain a relatively small portion, accounting for less than 10%. In September, this percentage stood at 8.7%. These statistics highlight the ongoing challenge of acquiring users for Web3 games.

Source: Monthly Active Games

Throughout the month, the number of daily active users in Web3 games remained consistently around 1 million, indicating a roughly 15% increase compared to August. 

Source: Active Users & Growth Rate DoD

Major players in the gaming industry are increasingly venturing into the realm of Web3 gaming. Korea, known for its fervor for esports and blockchain games, boasts a substantial fanbase and significant consumer interest in diverse gaming cultures. Neowiz, a publicly traded Korean game publisher, recently revealed its plans to develop games on the Avalanche blockchain through its Web3 subsidiary, Intella X. NHN Corporation, a South Korean entertainment conglomerate, announced that it has partnered with Sui to launch an on-chain game scheduled for 2024.  

These industry giants are poised to accelerate the mass adoption of blockchain gaming through their expertise in delivering high-quality games and managing in-game economies.

However, user acquisition, retention, and survival during market downturns are paramount concerns for all players in the Web3 gaming industry.

Web3 Game Chains

The distribution of games across various blockchains has remained relatively stable, with BNB Chain taking the lead at 30.9% of the distribution. Ethereum follows closely behind at 24.7%, and Polygon holds a share of 14.9%. In contrast, the second tier of blockchains, including Wax, EOS, and Avalanche, had distributions below 5.5%, highlighting a disparity between these chains and the top three.

Source: Games Shared by Chain

Since 2022, the distribution of games across different blockchains has shown a consistent trend. With the flourishing Web3 game market, there is an anticipation that more chains will emerge and potentially challenge the dominance of the top three chains.

Source: Monthly Games by Chain

In September, the total number of games on BNB Chain, Polygon, and Ethereum with over a thousand monthly active users was 228. Among these chains, BNB Chain accounted for the largest share at 21.0%, followed by Polygon at 17.1%, and Ethereum at 4.8%. Specifically, on Polygon, 39 games attracted more than 1,000 active users, which represents 8.6% of the total games on the chain, while BNB Chain represents 5.3%, and Ethereum represents 1.5%.

On September 28, Sui announced the launch of the Web3 game portal Play Beyond which included 18 titles across various genres. It offers users the opportunity to delve into their preferred games while also providing resources to learn about Sui's blockchain technology for game development and enhancement purposes. The portal's main focus is on providing a seamless gaming experience without the need for crypto knowledge. This aligns with the 2023 trend of emphasizing immersive and enjoyable games, rather than complex underlying technology.

GameFi Projects Overview

In September, a total of 13 projects experienced a notable surge in token price, surpassing a 20% increase. These sustained growth rates serve as a testament to the potential of these projects and their ability to capture the attention and interest of investors within the dynamic realm of GameFi. 

Source: Game Token Price Changes in September

Nakamoto Games, built on the Polygon blockchain, is a gaming platform that offers a variety of engaging crypto games with a play-to-earn model. The platform's native token has garnered significant attention among GameFi projects, demonstrating remarkable performance with an impressive 80.4% price increase in just this month. Since the start of the year, the token's value has surged by an impressive 661.0%. 

Nakamoto Games

GameFi Investment and Funding

The Web3 gaming sector continues to experience a steady influx of investment, with eight notable funding rounds capturing substantial interest. These rounds encompass significant investments in various companies and projects, including GAM3S.GG ($2 million), BulletChain ($2 million), BlockGames (undisclosed), GamePhilos ($8 million), Podium (€2 million), Salvo Games ($1.5 million), Fableborne ($7.8 million), and Proof of Play ($33 million).

Source: Fableborne

Prominent crypto ventures such as a16z have shown signs of engaging in bottom-fishing strategies. Notably, a16z maintained a relatively low investment activity from June to August 2023, with only one monthly investment. However, their recent resurgence is apparent, as they made four investments in September, including a notable investment in Proof of Play. 

Proof of Play, a crypto gaming company led by FarmVille co-creator Amitt Mahajan,  successfully secured $33 million in a seed funding round. The seed round was co-led by a16z and Greenoaks. Played by more than 300 million people, FarmVille is Facebook’s number-one game of all time. The first title of Proof of Play is a social role-playing game called Pirate Nation.

Source: Pirate Nation

Original Link