May 2024 Blockchain Game Research Report: Market Value Growth, Player Participation Changes, Rise of Mini Games

Author: stella@footprint.network

Data Source: GameFi Research Page

In May 2024, Ethereum's performance was significantly boosted by the SEC's approval of the preliminary application for a spot Ethereum ETF. The total market capitalization of blockchain game tokens reached $2.01 billion, a month-on-month increase of 6.7%. However, despite the growth in market capitalization, the industry experienced an interesting shift in user engagement, with a decline in trading volume but a record high in daily active users. Additionally, the rising popularity of mini-games and game bots is gradually changing the landscape of the gaming industry.

The data for this report comes from Footprint Analytics' Blockchain Game Research Page. This is an easy-to-use dashboard that contains the most important statistics and metrics for understanding the blockchain gaming industry, updated in real-time.

Macroeconomic Market Review

In May 2024, Bitcoin rebounded strongly from its low at the end of April, rising from $60,653 at the beginning of the month to $67,606 by the end, an increase of 11.5%. Meanwhile, Ethereum also showed a strong recovery, with its price rising from $3,011 to $3,778 during the same period, a remarkable increase of 25.5%.

Data Source: Bitcoin and Ethereum Prices

In May 2024, market dynamics were significantly influenced by major regulatory developments, as the U.S. Securities and Exchange Commission (SEC) approved the preliminary application for a spot Ethereum ETF. This milestone not only helped Ethereum stand out in the broader cryptocurrency market but also marked a shift in regulatory attitudes towards supporting cryptocurrencies.

Additionally, the political landscape also impacted market sentiment. The Trump campaign announced it would accept cryptocurrency donations, suggesting that the upcoming U.S. presidential election could have a profound impact on the cryptocurrency market, potentially rivaling the influence of adjustments in Federal Reserve monetary policy.

Conversely, the ongoing resolution process of the Mt. Gox bankruptcy case has exerted some downward pressure on Bitcoin prices. The exchange, which has been in bankruptcy for nearly a decade, announced last September that creditor repayment efforts would begin in October 2024, raising concerns in the market about the potential impact of a large token sale.

Overview of the Blockchain Gaming Market

In May, the market capitalization of blockchain game tokens experienced fluctuations but stabilized at $2.01 billion by the end of the month, reflecting a 6.7% increase.

Data Source: Blockchain Games and Bitcoin Market Capitalization

The average daily trading volume for blockchain games was 8 million transactions, a decrease of 7.3% compared to April.

Data Source: Daily Transactions in Blockchain Games

At the same time, the average daily active users (measured by wallet count) rose to 3.3 million, a month-on-month increase of 9.6%, setting a new historical record.

Data Source: Daily Active Users in Blockchain Games

After observing the market dynamics in May, we noted an interesting phenomenon: the decline in daily trading volume in blockchain games coexists with the rise in daily active users. Since October 2023, the ratio of daily trading volume to daily active users has gradually decreased from 17.2 to 2.3.

Ratio of Daily Transactions to Daily Active Users in Blockchain Games

We believe several factors may have contributed to this trend. First, the rise of the "play-to-airdrop" strategy has led more users to participate in games primarily to complete tasks rather than seek entertainment, resulting in lower interaction frequency. Second, many developers are opting for partially on-chain games or mini-games to balance seamless Web3 integration with engaging gameplay. These games often create user wallets or issue tokens on-chain, but most activities occur off-chain.

Additionally, May saw a security incident. An unidentified hacker breached Gala Games' internal controls and minted 5 billion new GALA tokens on May 20. The hacker then sold 600 million tokens on decentralized exchanges for nearly 6,000 ETH. Within hours of the attack, the Gala Games team detected the breach and took action, activating their blacklist feature to isolate the attacker's address. Subsequently, the stolen funds were quickly transferred from the hacker's wallet to a wallet controlled by Gala Games. Although the GALA token dropped over 15% immediately after the incident, it quickly recovered due to the team's swift response. This serves as a valuable lesson.

Data Source: GALA Token Price and Trading Volume in May 2024

Blockchain Game Public Chains

In May, a total of 1,525 games remained active across multiple blockchain platforms, with BNB Chain, Polygon, and Ethereum leading the market with shares of 23.3%, 19.7%, and 15.7%, respectively.

Among the 3.3 million daily active users in May, Ronin, Polygon, and NEAR remained at the forefront, similar to the previous month. Ronin continued to dominate with approximately 29.0% market share. NEAR's share grew from 12.1% at the beginning of May to 14.8% by the end. Flow also showed growth, with its share increasing from 0.7% to 3.3%. Meanwhile, BNB Chain's share declined from 8.0% to 5.9%.

Data Source: Daily Active Blockchain Game Users on Various Public Chains

In May, several strategic initiatives aimed at enhancing the gaming ecosystem were implemented across public chains.

On May 24, the Arbitrum community initiated a vote on a $20 million ARB gaming catalyst plan, which will conclude on June 8, aimed at strengthening the gaming ecosystem on the network. As of the writing of this report, the proposal has received majority support, with a support rate of 80.6%. Meanwhile, Arbitrum is developing a Layer 3 gaming-specific chain ecosystem, and the multi-chain NFT gaming ecosystem Polychain Monsters announced the launch of a Layer 3 gaming-specific chain based on Arbitrum Orbit through Altlayer.

The Starknet Foundation granted a funding of 2 million STRK to the on-chain metaverse game Realms.World, as part of its strategy announced in March to enhance the Starknet gaming ecosystem through the allocation of 50 million STRK tokens.

The classic football game "Captain Tsubasa," developed by Mint Town Co., Ltd., a subsidiary of mobile gaming giant KLab Inc., officially launched on Oasys in May. Oasys is actively seeking further collaboration with Mint Town and other developers to integrate high-quality intellectual property (IP) into blockchain games.

TON continues to receive widespread attention. At the beginning of May, Pantera Capital, which manages over $5 billion in assets, announced its "largest investment ever" in TON. Additionally, with the rise of the Notcoin craze, game bot projects such as Tapswap and Hamster Kombat are also gaining increasing attention.

Overview of Blockchain Game Projects

In May, the total number of blockchain games climbed to 3,153, with 1,272 being active. Among these active games, 263 successfully attracted over 1,000 monthly users, accounting for 8.3% of the total number of games and 20.7% of the active games.

Data Source: Monthly Active Blockchain Games

Despite the blockchain gaming industry being very active in recent years, there is a lack of flagship games to truly highlight its potential. Popular games like Pixels, Matr1x FIRE, Sweat Economy, and Another World have attracted attention, but many games still struggle to exceed 1,000 monthly active on-chain users. This stagnation is partly due to the popularity of non-full-chain games, most of whose data remains off-chain, despite full-chain games and AAA games being a long-standing narrative.

In the face of these challenges, the rise of Telegram game bots and mobile mini-games, exemplified by Notcoin, indicates that changes in the industry are brewing. Binance launched the NOT token through its Launchpool on May 9, and trading began on May 16, further driving this trend. Today, Notcoin has a strong community of over 7.7 million subscribers on Telegram, with similar projects like Hamster Kombat and Tapswap also gaining significant attention, boasting 25.3 million and 18 million subscribers, respectively.

These developments suggest that mini-games and game bots may pave the way for broader Web3 adoption. Unlike the long development cycles required for full-chain or AAA games, these platforms focus more on flexibility and rapid deployment. They can act quickly and iterate rapidly. This approach may be more effective than pursuing complex but less accessible gaming experiences, attracting and retaining a large user base.

Blockchain Game Investment and Financing Situation

In May, the blockchain gaming industry successfully raised $44.95 million across 15 financing activities, a decrease of 42.9% compared to April.

May 2024 Blockchain Game Investment and Financing Events (Source: crypto-fundraising.info)

Seeds Labs successfully raised $12 million in a seed round, supported by Avalanche's Blizzard Fund, the Solana Foundation, and Hashkey Capital. Their flagship product—Web3 game Bladerite—was officially launched in May. This game is built on Solana.

The content of this article is for industry research and communication purposes only and does not constitute any investment advice. The market is risky, and investments should be made with caution.