Blockchain games dominate the market, outpacing DeFi by 2x
DappRadar, in collaboration with BGA Games, has released a report on blockchain games for February 2023. The report provides an overview of the industry's current state, user engagement, and financial performance, indicating that the industry still has potential despite facing obstacles.
How is the Web3 gaming sector faring?
The number of unique active wallets (dUAW) decreased by 12.33% in February compared to January, which some analysts see as a concerning trend. However, others point out that historically February has been the slowest month for the industry.
The decline had the greatest impact on the top gaming protocols, except for Wax, which still maintains a leading position and has even experienced growth, unlike others that lost up to 15% dUAW. Meanwhile, new protocols like Klaytn and Arbitrum have seen considerable growth.
However, taking a broader view, the Web3 gaming sector remains dominant with 45.43% of dUAW across the entire cryptocurrency industry. This is twice as much as DeFi.
Games and events
The majority of blockchain games remain active. Alien Worlds is still the most popular game by a large margin, despite a 9.69% drop in mUAW (monthly unique active wallets) in February. Splinterlands is second in popularity, with Planet IX coming in third.
Many new projects are growing and evolving faster thanks to software development kits (SDKs). They enable developers to utilize pre-made modules and components for their applications. According to Alchemy, Ethereum SDK downloads increased by 87% in 2022 compared to the previous year, and Unity has added various SDKs to its online store to support blockchain development.
The Immutable X Gaming Passport - a non-custodial wallet that greatly simplifies user registration and interaction with Web3 games - is set to be released in April 2023, but developers are actively implementing it already.
Trading volumes and investments
Comparatively to the UAW statistics, the financial indicators of blockchain games are on the rise. In February, trading volumes surged to $145 million, which is a 226% increase compared to January. However, it should be noted that the vast majority of these were generated by the game Otherdeed ($137 million).
NFTs and metaverses are of particular interest to users. DappRadar forecasts growth in these areas throughout the year.
Investors share a similar sentiment, having invested $148 million in the industry in February. Of that, 65.2% were directed to games and metaverses, but only 4.3% to NFTs. Some companies have expressed interest in creating a gaming DAO, as it provides more transparency in project management. Although investment has not reached last year's peak, volumes are still high.
What's the status of Move-to-Earn?
2022 was the year of Move-to-Earn applications, where users could earn tokens by completing tasks and walking. After the collapse of Luna and FTX, most projects were unable to recover, while others experienced a significant user outflow. However, there can be no claim that this was the end of the road for the trend.
There are still teams actively supporting their Move-to-Earn applications (Sweat Economy, Dustland, Stepn, Genopets). If these applications continue to add new features, they may be able to attract more users, especially in the face of a potential bull market.
Conclusion
In February 2023, the blockchain gaming industry did face challenges such as a decrease in user retention. However, this did not hinder it from attracting new investments, increasing trading volume, and collaborating with renowned companies in the gaming industry such as Unity. It's probable that the blockchain gaming industry will continue to adhere to these trends in the near future, delivering an increasing number of options for gamers.
