August 2024 Blockchain Game Research Report: User Growth Coexists with Cryptocurrency Market Volatility

Author: Stella L (stella@footprint.network)

Data Source: Footprint Analytics Games Research Page

In August, the cryptocurrency market faced severe challenges, with significant declines in the values of Bitcoin and Ethereum. Bitcoin dropped by 9.3%, while Ethereum saw a more severe decline of 21.4%, reflecting market volatility driven by global economic factors. Despite the decline in token market capitalization, activity in the Web3 gaming sector remained resilient. Daily active users (DAUs) grew by 6.88%, and trading volume increased by 8.94%, primarily driven by platforms like Ronin and opBNB. However, the blockchain gaming industry has not completely escaped the overall market's difficulties, with the market capitalization of gaming tokens decreasing by 13.2%.

Despite the turbulent market environment, the ongoing development of Web3 innovations remains a focal point for the industry, especially as major players like Sony make strides in the blockchain space.

Macroeconomic Market Review

In August, both Bitcoin and Ethereum experienced significant declines. Bitcoin's price started at $65,290 at the beginning of the month and ended at $59,246, a drop of 9.3%. Ethereum's downward trend was more pronounced, falling from $3,220 to $2,531, a decline of 21.4%.

Data Source: Bitcoin and Ethereum Price Trends

The Bank of Japan unexpectedly announced an interest rate hike at the end of July, triggering a chain reaction across various markets. Strategies such as short-term volatility tactics and forex arbitrage saw significant declines in returns, leading to a sharp drop in cryptocurrency values during the first week of August. Both Bitcoin and Ethereum hit their monthly lows on August 7.

Ongoing selling pressure persisted throughout the month, exacerbated by various government actions and lingering issues from Mt. Gox, although the impact of these factors gradually diminished.

Meanwhile, Ethereum is undergoing significant changes, causing uncertainty among some investors. The blockchain plans to scale by shifting more transactions to Layer 2 networks. This year, activity on Ethereum Layer 2 networks has surged, with giants like Sony launching projects such as Soneium within this ecosystem. However, the shift to Layer 2 has led to a decrease in Ethereum's fee revenue, which may impact the value of Ether.

By the end of the month, following the arrest of Telegram founder Pavel Durov in France, market focus increasingly turned to the relationship between blockchain technology and digital privacy. Although Federal Reserve Chairman Powell hinted at the possibility of interest rate cuts later in the month, overall market sentiment remained negative throughout August.

Blockchain Gaming Market Overview

In August, the market capitalization of blockchain gaming tokens fell from $1.82 billion to $1.53 billion, a decrease of 13.2%. In comparison, Bitcoin's market capitalization declined by 8.6%. The blockchain gaming industry, like other parts of the crypto market, experienced a challenging month.

Data Source: Market Capitalization of Blockchain Gaming Tokens and Bitcoin

Despite the market downturn, the daily active users (DAUs) of Web3 games reached 4.15 million in August, a 6.88% increase from July. This growth was primarily driven by activity on Ronin and opBNB.

Data Source: Daily Active Users of Blockchain Games

The average daily transaction volume for blockchain games reached 8.86 million, a slight decrease of 0.46% from July. A notable trend was the surge in on-chain transaction numbers on chains like Aptos, primarily driven by Telegram games such as Tapos. Due to the game mechanics, each click generates a transaction, leading to daily transaction volumes on Aptos exceeding 50 million during peak times. Currently, we have not included this data in our statistics as we intend to observe this trend over a longer time span.

Data Source: Daily Transaction Counts of Blockchain Games

The daily transaction volume for blockchain games reached 17.04 million, an 8.94% increase from July, excluding some anomalies from the previous month.

Data Source: Daily Transaction Amounts of Blockchain Games

Overall, despite the month-on-month growth in daily active users, transaction volume, and transaction amounts in August, the decline in the market capitalization of blockchain gaming tokens still highlights the challenges faced by the overall crypto market, with both token prices and market capitalizations showing downward trends.

Against the backdrop of market volatility, Soneium became a hot topic. On August 23, the Sony Blockchain Solutions Labs, jointly launched by Sony Group and Startale Labs, announced the launch of a new Layer 2 network based on Ethereum—Soneium. This network will utilize Optimism's OP Stack technology, bridging gaming, entertainment, and finance, combining Web3 innovations with consumer applications.

Soneium

In the week following the announcement, Soneium made rapid progress, including the launch of the "Minato" testnet, the initiation of the "Soneium Spark" program for developers, and a partnership with Transak to provide global fiat deposit services. As industry giants like Sony continue to enter the blockchain space, there is growing optimism about bringing more users into the Web3 ecosystem.

Blockchain Gaming Public Chains

In August, a total of 1,492 games were active across various blockchain networks, a decrease of 5.45% from July. BNB Chain, Polygon, and Ethereum led the market with market shares of 20.2%, 17.4%, and 17.0%, respectively.

Data Source: Proportion of Active Game Projects on Various Public Chains

Ronin, opBNB, Nebula (SKALE subnet), and NEAR performed well in terms of DAUs, averaging 1.34 million, 691,000, 349,000, and 321,000, respectively, throughout the month. By the end of August, these chains held DAU market shares of 28.0%, 23.8%, 8.8%, and 6.6%.

Data Source: Daily Active Users of Games on Various Public Chains

Ronin's DAU market share continued to decline throughout August, dropping from 38.1% on August 1 to 28.0% on August 31. Nevertheless, Ronin's average DAU in August was still nearly double that of the following opBNB. This downward trend was primarily driven by the performance of the game Lumiterra, whose DAUs fell from 600,000 at the beginning of the month to 150,000 by the end.

Additionally, on August 6, the Ronin cross-chain bridge was paused due to a white-hat hacker attack that revealed a critical misconfiguration in the cross-chain bridge upgrade proposal. Approximately $12 million worth of cryptocurrency was transferred. Although the issue was quickly resolved and all funds were recovered, this incident had some impact on the activity within the Ronin ecosystem.

Conversely, opBNB's DAU share rose from 17.5% in August to 23.8%. By August 31, its market share had nearly doubled from 13.1% on July 1. The game SERAPH: In The Darkness, which launched on opBNB in mid-July, gained significant attention, with its DAUs increasing from 187,000 on August 1 to 515,000 by the end of the month.

Nebula's market share also grew, rising from 7.6% to 8.8%. As a SKALE subnet operating under a "zero Gas Fee" model, Nebula's growth was driven by games such as Yomi Block Puzzle, moteDEX, and Haven's Compass.

Blockchain Gaming Overview

In August, the blockchain gaming ecosystem comprised a total of 3,401 games, with 1,254 games being active. Among these 1,254 active games, 290 attracted more than 1,000 monthly active on-chain users (MAU), accounting for 8.5% of the total number of games and 23.1% of the active games.

Data Source: Monthly Active Blockchain Games

As mentioned earlier, the Telegram game Tapos launched on Aptos in August, marking a significant development. This strategy indicates that, in addition to the TON network, an increasing number of blockchain platforms are actively seeking to attract traffic and users through Telegram games.

Furthermore, one of the most popular games on Telegram, "Hamster Kombat," announced plans to launch its HMSTR token on TON on September 26, along with an airdrop for players. Although "Hamster Kombat" claims to have attracted 300 million players, it appears that only the token will be integrated on-chain. The core mechanics and user activity of the game are expected to remain off-chain, thus limiting its direct impact on blockchain metrics.

Blockchain Gaming Investment and Financing Situation

In August, the blockchain gaming sector secured a total of $61.5 million in investments across 17 funding rounds, marking a 61% increase compared to June. Among these, four funding activities did not disclose specific amounts.

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

Notably, GAMEE appears twice in the above funding chart, which is not a statistical error. GAMEE, the mobile gaming platform behind WatBird and a subsidiary of Animoca Brands, successfully completed two funding rounds in August. On August 16, GAMEE announced an investment from TON Ventures, followed by another announcement on August 21 regarding an investment from Pantera Capital. With over 4 million users connecting their TON wallets to WatBird, GAMEE is focusing on community-driven activities through its Telegram Mini App to attract more gamers, Web3 communities, GameFi investors, and Telegram users.

GAMEE

Animoca Brands led or participated in 6 of the 17 funding events in August, indicating their unwavering commitment to advancing the Web3 gaming industry despite macroeconomic fluctuations.

Interest from industry giants in the Web3 gaming sector continues to grow. For example, double jump.tokyo announced it raised over $10 million in its Series D funding round, led by SBI Investment, with participation from Sony Group. This funding will be used to accelerate the development of blockchain games and infrastructure, including the blockchain platform Oasys developed by double jump.tokyo.

Additionally, projects like SatsRush and UniWorlds have also completed funding rounds aimed at building games based on the Bitcoin ecosystem.

The data in this report is sourced from the Games Research page of Footprint Analytics, a real-time data dashboard that provides comprehensive and reliable statistics on Web3 gaming. If you find any chains or games that are not included and wish to have them added to the dataset, please contact us. You can also submit contracts for inclusion via this link.

_

This content 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.

About Footprint Analytics

Footprint Analytics is a comprehensive blockchain data analytics platform that simplifies complex analysis for businesses and projects within the Web3 ecosystem. It offers customized solutions that eliminate the need for extensive expertise and infrastructure maintenance. The platform provides long-term growth tools designed to help gradually build and manage communities, emphasizing sustainable growth and user loyalty. By combining powerful analytics tools with community management tools, Footprint Analytics enables projects to effectively leverage blockchain data for decision-making and growth strategies across various fields, including GameFi, NFTs, and DeFi.

Official Website | X / Twitter | Telegram | Discord