October Web3 Game Industry Report: User Acquisition Challenges Behind Market Value Growth
In October, driven by the surge in Bitcoin, the market capitalization of tokens in the Web3 gaming industry steadily increased.Author: stella@footprint.network
In October, driven by the surge in Bitcoin, the market capitalization of tokens in the Web3 gaming industry grew by 15.8%. The industry has been steadily expanding, with a total of 2,651 games currently available. However, the growth of active games and active users has not kept pace, with as many as 73.1% of games having fewer than 10 active users in October, highlighting the ongoing challenges Web3 game developers face in user acquisition and retention.
The data in this report comes from Footprint Analytics' Web3 Games research page. This is an easy-to-use dashboard that contains the most important statistics and metrics for understanding the Web3 gaming industry, updated in real-time. You can click here for the latest information on prices, projects, funding, and more.
Key Highlights
Cryptocurrency Market Overview
- Bitcoin's price at the beginning of the month was $26,967, which surged by 27.9% during the month, ultimately closing at $34,497.
Web3 Gaming Market Overview
The Web3 gaming industry is steadily growing, with a total of 2,651 games in October.
Although the number of games in the Web3 gaming industry is continuously increasing, the growth of active games and active users has not kept pace. Web3 game developers face ongoing challenges in user acquisition and retention.
As many as 1,937 games (73.1% of the total) had fewer than 10 active users in October.
Web3 Gaming Public Chain Data
Among games on the Polygon chain, 38 games attracted over 1,000 active users, accounting for 8.1% of the total games on that chain. The ratio for the BNB chain is 5.4%, while Ethereum stands at 1.7%.
The Web3 gaming industry is eagerly anticipating the rapid development of other blockchains to challenge the dominance of these three chains.
Web3 Gaming Project Overview
In October, the token prices of 17 projects surged significantly, with increases exceeding 50%.
In October, the price of AXS rose by 18.3%, while SLP saw a substantial increase of 70.0%.
In October, Ultimate Champions welcomed a large number of new users on both the Polygon and BNB chains.
Web3 Gaming Investment and Financing Situation
- In October, investment and financing in the Web3 gaming sector continued to grow, with a total of seven rounds of financing amounting to $50.9 million.
Market Dynamics This Month
Animoca Brands launched a new game, Formula E: High Voltage, on Flow.
Sega's co-COO Shuji Utsumi stated that blockchain gaming remains an "unknown world" worth exploring.
Immutable partnered with AWS to promote global adoption of Web3 gaming.
The French National Assembly voted to decide that NFT games should not be considered gambling.
Game studio Neon Machine completed a $20 million Series A financing round, led by Polychain.
Cryptocurrency Market Overview
In October, Bitcoin's price soared, outperforming traditional assets and other cryptocurrencies. Bitcoin's price at the beginning of the month was $26,967, which surged by 27.9% during the month, ultimately closing at $34,497.
Ethereum's price at the beginning of the month was $1,671, with a monthly increase of 8.3%, closing at $1,810.
Data Source: BTC Price & ETH Price
In October, tech stocks faced downward pressure, but Bitcoin stood out, rising against the trend. On October 16, Bitcoin's price surged to nearly $30,000. This sudden spike was triggered by a false report from the cryptocurrency news site Cointelegraph, which claimed that the U.S. Securities and Exchange Commission (SEC) had approved the first spot Bitcoin ETF. However, after BlackRock clarified to Bloomberg that their application was still under review, the post was subsequently deleted. As a result, Bitcoin's price fell to around $28,000 by the end of that day.
Following this incident, Bitcoin received continued support from market expectations for the launch of a U.S. spot ETF. The SEC did not appeal a recent favorable ruling by the D.C. Circuit Court of Appeals for Grayscale. Grayscale and other spot Bitcoin ETF applications are currently awaiting SEC review. Bitcoin's price began to experience a noticeable upward trajectory starting October 23, maintaining around $35,000 until the end of the month.
Web3 Gaming Market Overview
The Web3 gaming industry is steadily growing, with a total of 2,651 games in October, an increase of 1.7% from September and 13.9% from May.
Although the number of games is continuously increasing, the proportion of games with over 1,000 monthly active users remains low, at less than 10% of the total. In October, this proportion was 8.8%, with five more games than in September. Meanwhile, there were 282 games with over 500 monthly active users, accounting for 10.6% of all 2,651 games, a decrease of three games from September.
On the other hand, as many as 1,937 games (73.1% of the total) had fewer than 10 active users in October. This raises questions about the sustainability of the Web3 gaming industry—people consider it a "false prosperity."
Data Source: Monthly Active Games
In October, the daily active users of Web3 games remained relatively stable, hovering around 1 million, roughly the same as in September.
Although the number of games in the Web3 gaming industry is continuously increasing, the growth of active games and active users has not kept pace. Web3 gaming faces ongoing challenges in user acquisition and retention.
Data Source: Active Users & Growth Rate DoD
The Web3 gaming industry is relatively new, but practitioners have a rapid learning ability. In October, Sega's co-COO Shuji Utsumi expressed optimism about the potential of blockchain games and NFTs in the future of video games. Previously, he referred to P2E games as "boring" in an interview with Bloomberg. Sega has licensed the IP of its card game Sangokushi Taisen to Double Jump.Tokyo, a blockchain company developing a new card game called Battle of Three Kingdoms. Shuji Utsumi acknowledged that blockchain gaming is still an unknown world for Sega, but they are collaborating to develop this game, with Sega providing game assets for the project.
Battle of Three Kingdoms
Web3 Gaming Public Chain Data
The distribution of games across different blockchains remains stable, with the BNB chain leading at 30.6%, followed closely by Ethereum at 24.5%, and Polygon at 15.0%. These three blockchains form the first tier, creating a gap with the second tier, which includes Wax, EOS, and Avalanche, with shares of 5.3%, 2.1%, and 2.0%, respectively.
Data Source: Games Shared by Chain
The Web3 gaming industry is eagerly anticipating the rapid development of other blockchains to challenge the dominance of these three chains.
Data Source: Monthly Games by Chain
In October, there were 233 games with over 1,000 monthly active users. Among them, the BNB chain held the largest share at 22.3%, followed by Polygon at 16.3%, and Ethereum at 5.6%. On the Polygon chain, 38 games attracted over 1,000 active users, accounting for 8.1% of the total games on that chain. The ratio for the BNB chain is 5.4%, while Ethereum stands at 1.7%.
This month, there were some new developments in public chains regarding gaming. Immutable recently partnered with AWS to develop infrastructure solutions specifically for the Web3 gaming industry. As part of the collaboration, Immutable joined AWS's ISV Accelerate program, which aims to support companies using AWS services, allowing game developers on the ImmutableX chain to participate in the AWS Activate program. This program provides technical support, up to $100,000 in AWS credits, and various other resources specifically for startups. However, the centralization of Web3 gaming and reliance on Amazon has raised some concerns, as Amazon dominates the cloud services industry with about one-third of the market share.
Gas Hero, a highly anticipated Web3 game developed by Find Satoshi Lab, is set to launch between 2023 and 2024. Find Satoshi Lab's previous game, StepN, achieved great success. Gas Hero, as their new title, will be exclusively launched on Polygon. Unlike StepN, which focuses on rewarding players for physical activity without characters or backstory, Gas Hero is a massively multiplayer online game set in a rich sci-fi world, with an immersive backstory that extends into comic books. Recently, Find Satoshi Lab announced that Gas Hero will undergo community testing from November 24 to December 8, further engaging the community in the game's development process. Gas Hero will use StepN's $GMT as its token upon release. Prior to launch, the game organized several community events. According to Footprint Analytics' Gas Hero Dashboard, as of the end of October, users had minted a total of 936 Gas Hero badges.
Data Source: GasHeroBadge Daily Minted
Web3 Gaming Project Overview
In October, the market capitalization of Web3 gaming tokens closely followed Bitcoin's trend. Benefiting from Bitcoin's surge, the market capitalization of Web3 gaming tokens grew by 15.8%.
Data Source: Market Cap: GameFi Tokens vs BTC
In October, the token prices of 17 projects surged significantly, with increases exceeding 50%. Despite the overall bear market in the cryptocurrency space, these projects still have the potential to attract users and investors.
Data Source: Game Token Price Changes in September
Flagship games continue to develop. Axie Infinity's economic tokens, Smooth Love Potions (SLP) and Axie Infinity Shards (AXS), both experienced significant increases. In October, the price of AXS rose by 18.3%, while SLP surged by 70.0%. These price increases are closely related to the recent upward trend in the cryptocurrency market and the sustainable Axie ecosystem, which includes Ronin Network and Axie Origins. Additionally, to celebrate Halloween, Axie organized the Axie Spooktoberfest event, allowing players to participate in various activities and earn rewards. This festive event boosted user engagement throughout October.
Axie Spooktoberfest
Ultimate Champions is a free fantasy soccer and basketball game that offers an innovative experience, allowing players to build the strongest team each week using their sports knowledge. In October, the game welcomed a large number of new users on both the Polygon and BNB chains. According to Footprint Analytics, Ultimate Champions successfully attracted 21,068 new users on Polygon this month, with a total of 420,516 users and 21,542 active users on that chain, followed closely by Planet Mojo and The Sandbox.
Data Source: Hot Games on Polygon
At the same time, Ultimate Champions gained 29,220 new users on the BNB chain, with a total of 169,040 users and 53,302 active users on that chain. Carv and SecondLive also performed well in acquiring new users on that chain.
Data Source: Hot Games on BNB Chain
Web3 Gaming Investment and Financing Situation
In October, investment and financing in the Web3 gaming sector continued to grow, with a total of seven rounds of financing amounting to $50.9 million. These rounds attracted significant investments in various companies and projects, including NexGami ($2 million), Forge ($11 million), Upland ($7 million), Darewise Entertainment ($3.5 million token pre-sale), Third Time Entertainment ($2 million), Neon Machine ($20 million), and Moonveil Entertainment ($5.4 million).
Seattle-based game studio Neon Machine successfully raised $20 million in Series A financing for its upcoming first-person shooter game, Shrapnel. This round was led by Polychain Capital, with participation from Griffin Gaming Partners, Brevan Howard Digital, Franklin Templeton, IOSG Ventures, and Tess Ventures. Shrapnel is set in a sci-fi combat shooting universe and will offer important in-game content, such as weapon parts, weapons, and decorations, in the form of NFTs, which will be issued on the Avalanche subnet. In April of this year, Shrapnel also launched its own ERC-20 token, named SHRAP.
Shrapnel
At the European Blockchain Conference held in Barcelona, Animoca Brands CEO and co-founder of The Sandbox Robby Yung emphasized the importance of maintaining cautious consideration in Web3 gaming investments. Nevertheless, many companies, including Animoca Brands, are still raising funds. Animoca Brands recently announced a strategic cooperation memorandum with Saudi NEOM to promote regional Web3 development initiatives aligned with Saudi Vision 2030. Additionally, the NEOM investment fund signed a convertible note financing letter of intent to invest $50 million in Animoca Brands.
The content of this article is for industry research and communication purposes only and does not constitute any investment advice. The market carries risks, and investments should be made cautiously.
This article is contributed by the Footprint Analytics community.
The Footprint Community is a global mutual data community where members utilize visualized data to collaboratively create impactful insights. In the Footprint community, you can get help, build connections, and exchange knowledge and research related to Web 3, the metaverse, GameFi, and DeFi. Many active, diverse, and highly engaged members inspire and support each other through the community, establishing a global user base to contribute data, share insights, and drive community development.
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