February Web3 Game Industry Trends
February 2024 Blockchain Game Industry Review: Growth and Challenges Persist.Author: stella@footprint.network
Data Source: Blockchain Game Research Page - Footprint Analytics
In February 2024, the blockchain gaming sector experienced significant growth driven by rising cryptocurrency prices and a surge in active users. However, the industry still faces challenges in maintaining user engagement and retention, with transaction amounts and counts falling short of expectations.
Blockchain platforms are actively establishing partnerships with content creators such as Web2 game studios to seek growth opportunities. Public chains are focusing on the synergistic development between games and platforms, while game developers are committed to expanding game IPs, aiming to broaden player engagement and enrich the entire ecosystem.
The data in this report comes from Footprint Analytics' Web3 gaming research page. This user-friendly dashboard contains the most important statistics and metrics for understanding the Web3 gaming industry and is updated in real-time. You can click here for the latest information on prices, projects, funding, and more.
Market Review of the Month
In February 2024, both Bitcoin and Ethereum showed significant growth. Bitcoin surged by 46.5%, closing at $62,404 at the end of the month, breaking the $60,000 mark for the first time since Q4 2021, just 9% shy of its all-time high. Ethereum performed even better, with a rise of 48.1%, closing at $3,383 at the end of the month.
Data Source: Bitcoin and Ethereum Prices - Footprint Analytics
The significant rise in the cryptocurrency market in February was driven by multiple factors. Among them, the U.S. spot Bitcoin ETF attracted up to $6 billion in inflows, highlighting investors' strong confidence in cryptocurrency as an effective store of value. Additionally, market expectations for the Ethereum Cancun upgrade in March and the Bitcoin halving event in April further boosted prices. These factors collectively provided strong support for the rise of the cryptocurrency market.
However, broader market dynamics, such as inflation concerns and Federal Reserve policies, may pose challenges to sustained growth. The rise in inflation in February suggests that the anticipated interest rate cuts in the U.S. may be delayed until later this year or even beyond, undoubtedly introducing uncertainty into the ongoing growth of the cryptocurrency market.
Overview of the Blockchain Gaming Market
With the robust growth of cryptocurrencies, the market capitalization of blockchain gaming tokens soared by 54.0% in February, reaching $18.5 billion.
In February, the number of daily active users (wallets) continued to rise, reaching 2.3 million, a 28.9% increase from January. The relentless efforts of builders in the blockchain gaming industry successfully attracted more Web2 game studios and players into the Web3 gaming space, driving rapid industry development.
Data Source: Daily Active Users in Blockchain Games - Footprint Analytics
However, the situation regarding user engagement and retention is less optimistic compared to attracting new users. Most Web3 game developers still face significant challenges in these two areas. According to data from Footprint Analytics, the increase in transaction amounts and counts in February fell short of expectations.
Data Source: Monthly Transaction Amounts and Counts in Blockchain Games - Footprint Analytics
In the broader context of the Web3 gaming market, its impact on other blockchain sectors is gradually becoming evident, especially in-game NFTs.
A notable case is the second game Gas Hero developed by the StepN team Find Satoshi Lab. The game announced on February 28 that it would return to closed testing due to significant difficulties. Despite a successful launch in January, the trading volume of the Gas Hero NFT series plummeted by 87.2% in February. This sharp decline directly impacted the NFT trading volumes on Polygon and Mooar (NFT trading market), which fell by 80.8% and 87.2%, respectively.
Data on Blockchain Game Public Chains
The game rankings for February show that Ronin, BNB Chain, and Polygon performed excellently in user activity, capturing 29.1%, 13.4%, and 13.1% of the market share, respectively. In terms of transaction volume, Ethereum, BNB Chain, and Ronin led the way, showcasing strong market performance.
Data Source: Active Game Players on Each Public Chain - Footprint Analytics
Public chains are seizing growth opportunities through deep collaboration with content creators. Facing local regulatory challenges, Web3 game developers in South Korea are actively looking to the global market for broader development space for their blockchain games. Oasys stands out in this trend, offering not only a Layer 1 network but also a Layer 2 network based on Ethereum, providing diverse technical support for game developers. Recently, Oasys announced a strategic partnership with the well-known South Korean game developer Com2uS, followed by collaboration with Metabora SG, the Web3 gaming division of South Korean internet giant Kakao.
Additionally, expanding the ecosystem through mutual growth between games and blockchain platforms is another strategy for public chains to achieve growth. The Web3 game Pixels migrated from Polygon to Ronin at the end of October 2023, fully leveraging Ronin's excellent interoperability and marketing support. This shift significantly enhanced the game's visibility and on-chain activity. In February alone, Pixels achieved over 1.5 million on-chain interactions, with user numbers approaching the milestone of 1 million. This growth trend undoubtedly had a positive impact on Ronin, highlighting the mutual benefits of their collaboration.
Furthermore, Pixels launched the PIXEL token in February, incorporating a "play-to-earn" airdrop event and Binance Launchpool reward program, further enriching the gaming experience. To reward Ronin supporters, Pixels also announced an airdrop of a total of 20 million PIXEL tokens to users staking Ronin RON tokens.
Overview of Blockchain Games
In February, the activity level of the blockchain gaming market remained relatively stable, with 2,880 games staying active. However, it is noteworthy that the proportion of games with over 1,000 users slightly decreased from 8.3% to 7.9%. Despite an overall increase of 28.9% in active user numbers, this growth did not lead to more games becoming active, even as signs of a bull market began to emerge. This indicates that currently, only a few blockchain games have successfully attracted a growing player base, while most games still face challenges in user growth.
Data Source: Monthly Active Blockchain Games - Footprint Analytics
Some games are actively expanding their game IPs to enrich their content and attract more players. South Korean mobile game developer Bali Games successfully launched the RPG game Axie Champions based on the Ronin blockchain. This game cleverly integrates popular Axie Infinity IP elements through collaboration with Axie Infinity developer Sky Mavis, providing players with a new gaming experience. Players participating in the game also have the opportunity to earn AXS tokens as rewards, undoubtedly increasing the game's appeal and playability.
Meanwhile, the continuous launch of new games keeps injecting vitality into the market. Among them, the first-person shooter game MATR1X FIRE has quickly attracted over 400,000 daily active users since its launch in February, becoming a new favorite in the market. Additionally, MATR1X, as a comprehensive platform, skillfully combines artificial intelligence (AI), Web3 technology, and esports, aiming to create unique and innovative gaming products.
Blockchain Game Investment and Financing Situation
In February, the Web3 gaming sector continued to maintain strong development momentum, successfully attracting 19 rounds of financing, totaling $83.6 million. This series of financing activities not only highlights the immense appeal and broad prospects of the Web3 gaming industry but also reflects investors' ongoing optimism and strong confidence in the field.
Investment and Financing Events in the Blockchain Gaming Sector in February 2024
However, among the 19 rounds of financing, as much as 89.5% of the financing amounts were below $10 million, reflecting a more cautious investment strategy from investors in the blockchain gaming sector.
Several game studios and games, such as Brawl Studios (BitBrawl), Matr1x FIRE, and Pixels, have successfully secured new financing. Meanwhile, gaming platforms have emerged as a prominent area, with outstanding companies like Crystal Fun, Ultiverse, and OVERWORLD making significant progress in their respective fields. Notably, OVERWORLD successfully secured $10 million in seed funding under the incubation of the Xterio ecosystem, aiming to pioneer cross-platform RPG games.
The spotlight is also on the gaming infrastructure sector. Infrastructure providers Ready Games Network (READYgg) and blockchain game data analytics platform Helika have successfully completed their latest rounds of financing.
The gambling platform Monkey Tilt successfully secured the largest financing in February, totaling $21 million, with participation from well-known institutions such as Polychain. This significant financing event aligns with our 2023 Blockchain Gaming Annual Report predictions, further confirming the immense growth potential of the GambleFi sector, even amidst regulatory challenges.
Key Developments of the Month
Crypto gaming company Gala Games launched the GalaSwap exchange and offered token rewards.
Leading global digital asset trading platform LBank announced the integration of Oasys into its diversified trading portfolio.
Bitcoin Cats launched the 1CAT Chain testnet to enter the blockchain gaming sector.
Crypto gaming platform PlayDapp lost tokens worth $290 million in two attacks.
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 investment should be approached with caution.
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