July 2024 Blockchain Game Research Report: Challenges and Opportunities of Market Volatility and Data Differentiation

Author: Stella L (stella@footprint.network)

Data Source: Footprint Analytics Game Research Page

In July, the cryptocurrency market experienced significant volatility, with varying price performances. Bitcoin and Solana stood out, while Ethereum's price declined after the launch of the spot Ethereum ETP in the U.S. market.

The data in the Web3 gaming sector also showed a mixed trend. Daily active users (DAU) grew by 19.4%, and daily transaction volume increased by 23.1%. However, the market capitalization fell by 6.1%, and daily transaction counts decreased by 0.4%. In terms of DAU, Ronin, opBNB, and Saakuru Verse led the market. Despite growth in some areas, the proportion of active games in the total remains low. The market's expectations for sustainability and game innovation remain strong.

Macroeconomic Market Review

In July, the cryptocurrency market experienced significant fluctuations. Bitcoin started the month at $63,381 and ended at $64,989, achieving a 2.5% increase. On July 5, Bitcoin hit a monthly low of $56,608, while on July 27, it reached a high of $68,806. Ethereum opened at $3,438 and fell to $3,243 by the end of the month, a decline of 5.7%. On July 7, Ethereum recorded its monthly low of $2,939, and on July 21, it reached its highest price of $3,542.

Data Source: Bitcoin and Ethereum Price Trends

In July, the overall volatility of the financial market increased. Large tech stocks and AI-related stocks, which led the market in the first half of the year, performed poorly. The crypto industry made significant progress, including the launch of spot Ethereum exchange-traded products (ETPs) and the positive endorsement of Bitcoin by former President Trump, a Republican presidential candidate.

The price performance in July showed a divergence. By the end of the month, the impact of the German government's sale of Bitcoin had diminished (which ended on July 13), and the repayment distribution by Mt. Gox to its users had a limited effect on the market. Although Bitcoin experienced fluctuations during the month, it ended July with a slight increase. Besides Bitcoin, Solana's performance was particularly notable, with a monthly increase of 25%. In contrast, Ethereum's price declined after the launch of the spot Ethereum ETP in the U.S. market. Although the launch of these ETPs initially supported Ethereum's price, subsequent selling pressure led to a price drop.

Overview of the Blockchain Gaming Market

In July, the market capitalization of blockchain gaming tokens shrank from $19.7 billion to $18.5 billion, a decline of 6.1%, reflecting the overall trend of the cryptocurrency market.

Data Source: Market Capitalization of Blockchain Gaming Tokens and Bitcoin

The daily active users (DAU) counted by unique wallets increased to 3.9 million, a growth of 19.4% compared to June. DAU surpassed 4 million on July 17 and reached 5 million on July 29, continuously breaking records, indicating an increase in industry participation.

Data Source: Daily Active Users in Blockchain Gaming

However, the data in July presented a mixed situation. Despite the significant growth in DAU, the average daily transaction count in blockchain gaming was 8.8 million, a slight decrease of 0.4% compared to June, continuing the downward trend since last October.

Data Source: Daily Transaction Counts in Blockchain Gaming

At the same time, excluding some anomalous data points (such as the transfer of 7.1 billion JEFE tokens between wallets on Fantom), the daily transaction volume in blockchain gaming reached 17.3 million, an increase of 23.1% compared to June. However, this growth rate has lagged behind the growth of DAU since last October.

Data Source: Daily Transaction Amounts in Blockchain Gaming

In the current market environment, interest in blockchain gaming is gradually shifting, with narratives such as meme coins, AI, RWA (real-world assets), and platforms like Telegram and TON gaining attention alongside Bitcoin. This makes it difficult to determine whether blockchain gaming is heading in the right direction or achieving sustainability. We will delve deeper into more data in this report.

Public Chains for Blockchain Gaming

In July, a total of 1,588 games were active across various blockchain networks. BNB, Polygon, and Ethereum dominated the market, accounting for 21.7%, 19.0%, and 15.1% of the market share, respectively.

Ronin, opBNB, and Saakuru Verse led in on-chain DAU, with average daily DAU of 1.1 million, 479,600, and 354,500, respectively. By the end of July, their DAU market shares were 32.6%, 18.7%, and 3.4%.

Data Source: Daily Active Users in Each Public Chain

Ronin's DAU market share significantly increased from 18.6% on July 1 to 32.6% on July 31, thanks to the recovery of Pixels data and the launch of new games Lumiterra and Fight League. Additionally, games on Ronin performed well in user retention, frequently appearing on the weekly new user retention leaderboard. For example, in the last week of July, five games ranked in the top ten for new user retention.

opBNB's DAU share rose from 13.1% in July to 18.7%, driven by the increasing popularity of its games MEET48 and SERAPH: In The Darkness. In particular, SERAPH: In The Darkness, a dark fantasy ARPG, gained significant attention on opBNB since its launch in mid-July.

SERAPH: In The Darkness

Oasys Layer 2 Saakuru Verse saw a significant DAU increase in the last ten days of June, but growth slowed in July, with its DAU market share dropping from 14.1% at the beginning of the month to 3.4% by the end. Nevertheless, Saakuru maintained the third-highest average DAU across all chains. Saakuru's unique agency model, where the chain operator (AAG) bears transaction costs, allows users and developers to interact without incurring Gas fees, significantly lowering the entry barrier.

Base's DAU skyrocketed from 8.2K to 222.5K within a month, with an average DAU of 101.6K, primarily driven by the game BLOCKLORDS Dynasty.

Another noteworthy mention is the TON chain. Several Telegram games in the TON ecosystem recently claimed to have over 10 million active users. However, on-chain data shows that TON's average DAU in July was 171,900, with a market share of 4.8% by the end of the month.

On the other hand, Wax, Ronin, and Near led in daily transaction volume.

Data Source: Daily Transaction Counts in Each Public Chain

Overview of Blockchain Gaming Projects

In July, there were a total of 3,362 blockchain games, of which 1,322 remained active. Among these games, 289 attracted over 1,000 monthly active on-chain users (MAU), accounting for 8.6% of all games and 21.9% of active games.

Data Source: Monthly Active Blockchain Games

We analyzed the historical data of 3,515 Web3 games from January 2022 to July 2024 and found that as of July 31, 1,799 games had been inactive for at least three consecutive months (zero active users), 1,493 games had been inactive for at least six consecutive months, and 1,153 games had been inactive for at least twelve consecutive months. These data raise questions about the sustainability of the Web3 gaming industry and emphasize the urgency for innovation.

Game content creation is a promising avenue for innovation. MEET48, an immersive smart social metaverse, is a prime example of this approach. It has become the second-largest DAU game project on opBNB. MEET48 integrates AI and Web3 entertainment, allowing users to create, support, and interact with virtual idols or real idols. MEET48 plans to launch its first game CoinFish on TON in August.

MEET48

Successfully launching Web3 games can also start from the Web2 gaming sector. As Rotten, Vice President of the double jump.tokyo ecosystem, stated in an interview with Footprint Analytics at IVS Crypto 2024: "First, keep it simple to attract the audience, and then gradually add extra steps."

BLOCKLORDS, an off-chain medieval strategy game, expanded its influence by launching its chain game BLOCKLORDS Dynasty on the Base network. Since its launch last month, Dynasty has gained significant attention, showing its growing popularity and active player engagement. To celebrate the upcoming token generation event (TGE), BLOCKLORDS initiated an airdrop of 300,000 $LRDS tokens on July 24, significantly boosting on-chain activity on Base.

New Web3 game projects need solid data to attract venture capital and exchanges. Studios and guilds, similar to early project pipelines, enhance projects by increasing user numbers and TVL. However, this approach may not be sustainable in the long run. With its vast user base, Telegram is becoming an important platform for user acquisition.

Blockchain games are trending towards lightweight, fast games that are easy to pick up. Through Telegram, they can leverage its large user base to gain initial traction. Social sharing will play a key role in driving in-game rewards and encouraging more user participation. As these games grow, they may expand to TON or other established blockchains to offer deeper gaming experiences. This shift explains why several Telegram games have large user bases, but their on-chain data on TON is not significant.

Blockchain Gaming Investment and Financing Situation

In July, the Web3 gaming sector raised $38.2 million through 11 financing activities, a decrease of 11.3% compared to June. Three of these financing activities did not disclose specific amounts.

Blockchain Gaming Investment and Financing Events in July 2024 (Source: crypto-fundraising.info)

NPC Labs, a Web3 gaming infrastructure startup co-founded by former Coinbase employees, raised $18 million in seed funding. The company plans to use this funding as a core contributor to the B3.fun ecosystem, accelerating the development of Web3 games on Base. Their goal is to develop GameFi products that are easy for non-crypto-native users to access. This financing event marks another significant advancement for the Base gaming ecosystem following Uniswap Labs' acquisition of the on-chain survival game Crypto: The Game in June.

Telegram games are gradually gaining market attention, with three projects—Pluto Studio, Akedo Games, and Pixelverse—announcing financing progress this month. Pluto Studio, the publisher of the Telegram game Catizen, received investment from Binance Labs. Telegram CEO Pavel Durov revealed on July 24 that Catizen has surpassed 26 million players. The game has generated $16 million in revenue through in-app purchases, donating 1% of this to rescue stray cats. This achievement indicates that users are willing to pay for Web3 games, showing that the player base is not limited to users chasing airdrops.