January's Web3 Gaming Snapshot: The Market Sees Record Growth

Author: lesley@footprint.network

The blockchain gaming market saw significant growth in the first month of 2024, with a substantial increase in active users.

Blockchain games are integrating with AI technology to enhance user experience and scale up platforms. There is also a growing focus on the compatibility of public blockchains with gaming applications. Technological innovations are reshaping this industry.

Capital markets are increasingly interested in blockchain gaming, suggesting a promising future. However, it is important to note that investment remains cautious. To convince potential investors, the industry needs tangible performance metrics.

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.

Monthly Market Review

Bitcoin surged in October 2023 and continued to rise, reaching a two-year high in January. In that month, Bitcoin climbed 1.65%, opening at $42,303 and closing at $43,001. Ethereum also saw a 2.77% increase, starting at $2,283 and ending at $2,346.

Market Cap: Game Tokens vs. BTC

The US debut of spot Bitcoin ETFs in January 2024 was a pivotal moment for the crypto market. These ETFs quickly captured investor attention, with daily trading volumes of $2.1 billion. This significant interest reflects a deeper integration of cryptocurrency into the traditional financial ecosystem. Despite the excitement around ETFs, Bitcoin and Ethereum prices remained relatively stable, indicating cautious trading post-launch. The crypto market is exploring the synergy between crypto and AI. The stablecoin market cap is steadily rising while the Federal Reserve has decided to hold interest rates steady. This period represents a nuanced evolution in the crypto landscape, balancing institutional embrace through ETFs and ongoing anticipation of macroeconomic and technological developments.

Overall Web3 Game Market

Blockchain Game Active Users

January 2024 began with a remarkable 54.67% increase in average active users compared to the 2023 annual average according to Footprint Analytics. This trend began in November 2023 and indicates industry expansion within the market. Additionally, the average number of active users in January increased by 14.42% compared to December.

However, it is important to acknowledge that the market is still affected by the bearish sentiment, despite the surge in user engagement and excitement. Transaction and volume in January have not fully recovered to the levels seen a year prior.

Several trends are appearing.

The gaming industry is quickly adopting artificial intelligence (AI) to create images and improve player experiences. Square Enix, for example, has cooperated with the AI image generator Midjourney in its character creation process for an upcoming game, indicating a move towards more visually and interactively rich game environments. Nvidia also highlighted Ubisoft’s use of AI to create more realistic and immersive non-playable characters (NPCs), demonstrating the industry’s push for deeper immersion.

Blockchain gaming industry is also working to increase transaction throughput to improve market growth, game quality, and stability. The Solana network faced congestion challenges during the Jupiter airdrop, revealing inefficiencies in transaction handling. The game ‘Crypto Unicorns’ moved from Polygon to Arbitrum’s Xai network due to network gas spikes on Polygon since these spikes increased operational costs and negatively impacted player experience.

Web3 Game Chains

Active Gamers Shared by Chain

According to gamer rankings, Ronin, Near, and BNB Chain have the most active user base, accounting for 29.9%, 10.2% and 9%. In terms of transaction volume, BNB Chain, Ronin, and Ethereum are the top chains.

Ronin Daily Txn & Growth Rate

Ronin has experienced significant growth in January, with transaction volume and active users increasing sharply. Transactions on Ronin grew by about 213.41% from December to January. This growth is due to ongoing improvements to the platform and the expansion of its ecosystem. Ronin has added support for major blockchains like Ethereum, Polygon, and BNB Chain in its gaming wallet. Promotions, including airdrops from Pixels and Apeiron, have also boosted activity on the platform.

The gaming sector is evolving with new blockchain infrastructures designed to meet its specific needs. Key industry players are leading innovative infrastructure developments. TreasureDAO is a notable example, pioneering a gaming-focused blockchain. Additionally, the BNB Chain NFT marketplace Tabi is launching Tabi Chain, which will be launched on Cosmos and will focus on games.

Web3 Games Overview

Monthly Active Games

The number of blockchain games increased from 2,081 in January 2023 to 2,877 in January 2024. However, the proportion of games with over 1,000 users decreased from 11% to 8%. This suggests that the increase in quantity has not resulted in an increase in quality, as shown by the on-chain data.

Jon Jordan’s Big Blockchain Game List shows that the blockchain gaming sector is highly volatile. In 2023, 31% of the tracked games (407 out of 1,322) were discontinued due to financial constraints and challenging market conditions due to financial constraints and challenging market conditions. These difficulties are also compounded by widespread regulatory uncertainty within the market.

Anichess

The blockchain gaming industry is making progress despite challenges. Anichess, a subsidiary of Animoca Brands, has launched a decentralized chess game, demonstrating innovation in adapting traditional games. Azuki plans to enter the gaming industry with a hyper-casual mobile game featuring BEANZ later this year. Additionally, Yuga Labs is preparing to release the Dookey Dash Unclogginged game in early 2024.

The token values of three games, Bomb Crypto, Singularity, and Blockchain Brawlers, have surged by over 200%. This growth is a testament to their long-term commitment to development in the gaming space and their ability to maintain active engagement through the bear market.

Other standout games remain. In January, StarryNift emerged as a leader in attracting new and active users on the BNB chain, reaching historic highs in wallet transactions. Last month, Yuliverse and Smart Cats performed exceptionally well on Polygon. Additionally, Carv wallet reported record-high transaction numbers.

Game Investment and Funding

  • The Web3 social game Forgotten Playland has completed a $7 million seed round.

  • Arcade2Earn has secured $4.8 million for its P2E platform in a funding round led by Crypto.com Capital.

  • AOFverse has secured $3 million from The Arbitrum Foundation.

  • SkyArk Chronicles, a 3A gaming platform, raised $15 million in funding.

  • Nebula Revelation secured $4.5 million in funding on January 10, 2024.

  • 3thix has raised $8.5 million to monetize Web3 games.

  • Abyss World developer Metagame has raised capital at a $100 million valuation.

  • Little Dragon has closed a pre-seed fundraiser.

  • Ta-da has completed its $3.5 million funding and is ready for launch.

  • The game studio behind Matr1x Fire has raised $10 million for an NFT mobile shooter.

  • Mon Studios has had one funding round totaling $1.4 million.

The gaming industry is becoming more popular. However, investments have mostly been moderate. One standout is the $15 million funding round for the AAA game platform SkyArk Chronicles. Other notable investments include the upcoming Web3 social game Forgotten Playland and the space-themed open-world game Nebula Revelation.

Several gaming platforms and developers received funding, including Arcade2Earn, Abyss World, ArenaX Labs, 3thix, 10n8 Little Dragon, and Ta-da. Ta-da raised $3.5 million for its gamified Web3 AI data marketplace.

Game developers such as AOFverse, Matr1x, and Mon Studios also received support and investments. These developments demonstrate the increasing interest in using blockchain technology and Web3 in the gaming sector within the crypto industry.

What’s New?

  • Animoca Brands partners iCandy for ‘Snaky Cat’ launch

  • ‘Treeverse’ Studio Endless Clouds Picks Immutable zkEVM for Its NFT Games

  • Animoca Brands announced that its subsidiary Anichess

  • GameStop (GME) Is Shutting Down its NFT Marketplace

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What is Footprint Analytics?

Footprint Analytics is a blockchain data solutions provider. It leverages cutting-edge AI technology to help analysts, builders, and investors turn blockchain data and combine Web2 data into insights with accessible visualization tools and a powerful multi-chain API across 20+ chains for NFTs, GameFi, and DeFi.

Footprint Analytics Website: https://www.footprint.network

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