Blockchain Games Overview: Looking Back at 2023, Looking Ahead to 2024

Author: [email protected]
Source: Blockchain Game Yearbook
Table of Contents
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Key Points
2023 Game Data: Decreased Trading Volume, but Trading Frequency Remains Stable
Blockchain Game Market Value
Active Game Wallet Count
Monthly Trading Volume & Trading Frequency
2023 Market Review: Game Industry is Developing, but On-chain Data is Not Optimistic
The Game Industry is Developing, and AI is also Making Profound Changes to the Industry
2023 Annual Token Price Increase Rankings
2023 Investment Outlook: Top Games Rise, More Web2 Users Enter Blockchain Games
This year, while the market value of Bitcoin (BTC) rebounded strongly from its lows of the previous year, the growth of the blockchain game market was relatively modest, but it also saw a significant increase at the end of the year.
In this year’s games, only 6% of games had more than 1,000 active wallets, a decrease from 10% in the previous year.
In 2023, although the overall trading volume decreased compared to the peak in 2022, the trading frequency remained relatively stable.
The blockchain game industry is developing, and AI is also making profound changes to the industry. Layer 2 blockchains are also developing rapidly, but established blockchains like BNB still dominate the market.
The market is expecting the emergence of top blockchain games, and GambleFi may experience growth, but it still faces regulatory challenges.
In terms of user acquisition, using platforms such as Telegram and X (Twitter) to reach a large user base has become a trend.
Blockchain games play an important role in popularizing Web3 for the general public by simplifying complex concepts and helping people understand blockchain technology. Unlike other fields, the concept of in-game currency and items that already exist in traditional games makes blockchain games a more accessible Web3 adoption solution.
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Despite a significant decrease of 83.8% in trading volume in the blockchain game market in 2023 compared to 2022 (from $20 billion to $3.2 billion), game developers are still actively preparing for the expected bull market by improving the security, scalability, and transaction processing capabilities of games and their underlying infrastructure. Additionally, developers are actively exploring strategies to attract more players through partnerships and learning from traditional game industry giants.
According to a16z’s predictions for 2024, blockchain games are transitioning from a pure play-to-earn model to a play-and-earn model that emphasizes game enjoyment. At the same time, artificial intelligence is not only increasing productivity but also bringing new possibilities to blockchain games.
Given these significant developments, we expect explosive growth in the blockchain game industry in the coming years. Our report analyzes the performance of blockchain games in 2023 in detail and provides forward-looking insights into the trends for 2024, aiming to provide important references for the market.
While the market value of Bitcoin (BTC) rebounded strongly from its lows of the previous year to $828.35 billion, a 159% increase, the growth of the blockchain game market, although relatively modest, also saw a significant increase at the end of the year.
Blockchain Game Market Value
Despite the increasing number of games in the market, user engagement has significantly declined. In 2023, the number of games in the market increased from 2,070 to 2,780, but in this year’s games, only 6% of games had more than 1,000 active wallets, a decrease from 10% in the previous year. This reflects the challenges blockchain games face in attracting users and a decline in game quality compared to the previous year.
Major industry participants believe that the market downturn in 2023 is temporary, so they are taking the time to optimize game infrastructure and wait for the arrival of the bull market.
In 2023, although the overall trading volume decreased compared to the peak in 2022, the trading frequency remained relatively stable, highlighting industry participants’ determination to improve on-chain infrastructure and enhance user experience. For example, SUI successfully addressed concerns about blockchain processing capabilities through games like SUI 8192. In July 2023, the daily trading volume on the SUI chain reached an astonishing 20 million.
We can see that the blockchain game industry is making strategic adjustments to seize opportunities when market sentiment improves.
The Game Industry is Developing, and AI is also Making Profound Changes to the Industry
Play-to-earn is evolving into play-and-earn
Web2 game studios are increasingly embracing Web3 technology
The integration of AI and the blockchain game industry has taken a crucial first step
Data from Footprint Analytics indicates that although the number of active players in Web3 games decreased in 2023, the industry as a whole is still moving towards mass adoption and improving user experience. The entire industry is gradually shifting its focus from native crypto players to the broader mainstream market.
With expectations for a bull market, the development of the game industry has not stopped. In 2023, the prices of four game tokens experienced growth of over 500%, with Nakamoto Games performing the best with an astonishing 1931.55% increase.
Additionally, HYTOPIA, Fabwelt, and Merit Circle game platforms saw token growth of over 500%. Even in a challenging market, projects with strong ecosystems continue to perform well.
A significant trend in 2023 is the evolution of play-to-earn in blockchain games into play-and-earn. Many Web2 companies are starting to show more interest and investment in blockchain games, injecting vitality into this emerging field with their capital and experience. HYTOPIA is a successful example, with its token growing by 1086.75% this year. This game originated from Mojang Studios’ sandbox game Minecraft in the traditional gaming industry.
Furthermore, AAA-level game Illuvium has also partnered with multiple mainstream Web2 entertainment companies. Web2 studios have a strong interest in entering the blockchain space. Even traditional game giants like Ubisoft and Square Enix are exploring this new field.
Looking ahead to 2024, the trend of AI integration into games will become more evident. AI not only greatly improves productivity, allowing small teams to efficiently create high-quality games, but also has the potential to quickly adjust game balance and mechanisms based on player data and real-time feedback, better meeting player demands.
Although AI is still in the early stages of development and its full impact on the game industry is yet to be explored, its potential is promising.
While Layer 2 blockchains are developing rapidly and attracting attention from the entire game industry, established blockchains like BNB, Polygon, and Ethereum still account for 80% of all active games, dominating the current market.
Layer 2 Overview
On December 31, 2023, Rollup technology experienced rapid development, with Arbitrum and Optimism capturing up to 83% of the market share in terms of Total Value Locked (TVL). Optimistic rollup is particularly popular in the DeFi sector due to its user-friendly nature. Game-oriented Layer 2 blockchains are still striving to find their direction and gain a larger market share.
Active Games on Different Blockchains in 2023
In 2023, established blockchains like BNB, Polygon, and Ethereum still accounted for 80% of the active games on the market, demonstrating the continued dominance of these established blockchains.
2023 Major Funding Events Ranking
Investment in the blockchain game industry slowed down significantly in 2023 due to the FTX incident and regulatory impact. Throughout 2023, the game sector completed a total of 131 funding rounds, amounting to $983.9 million, a significant decrease from the $2.6 billion of the previous year. In the market environment of 2023, investors became more cautious than before.
Game Industry Annual Funding Amounts
In these investment events, one highlight came from the game giant Nexon, which is currently valued at $27 billion. Nexon invested $100 million to expand its Web3 intellectual property project, MapleStory Universe.
The market is expecting the emergence of top blockchain games as the demand for high-quality games like AAA games grows. The blockchain game industry is poised for growth.
The development cycle of games typically exceeds two years. So, following the substantial influx of funding in 2022, it can be inferred that many games have made substantial progress in their development.
As Web2 giants gradually enter Web3, they will have a profound impact on the blockchain game industry when the bull market arrives. These game studios with expertise in traditional game development can inject their knowledge into Web3 and create superior blockchain games. Additionally, the integration of blockchain technology is expected to improve the transparency and security of in-game assets and economic cycles, creating more opportunities.
GambleFi may experience growth, but it still faces regulatory challenges, especially in the context of the presidential election year and the continuous development of the sports betting industry. Platforms like Rollbit are expected to achieve significant results. It has been reported that Rollbit’s revenue reached approximately $300 million in 2023. The platform uses on-chain burn methods to track revenue, which has attracted attention, but its accuracy still needs to be verified.
Despite regulatory challenges, GambleFi has become one of the most profitable applications in the crypto field, demonstrating the significant growth potential of blockchain-based gambling platforms.
Many people are developing games based on cryptographic technology on traditional social media platforms to acquire users.
The blockchain industry has always been seeking to incorporate more users. This year, using platforms such as Telegram and X (Twitter) to reach a large user base has become a trend. The collaboration between Animoca Brands and The Open Network (TON) blockchain is an important case in this field. As the largest validator for TON, Animoca Brands will help Telegram users transition to Web3. This collaboration not only expands the user base but also brings practical value and utility to Web3 applications.
Blockchain games continue to develop, leveraging the advantages of existing mainstream platforms and combining them with the innovative capabilities of blockchain technology, playing a key role in promoting the adoption of the blockchain industry and shaping its future.
Footprint Analytics is a blockchain data solution provider. Leveraging cutting-edge artificial intelligence technology, we offer the first no-code data analytics platform and a unified data API for the crypto domain, allowing users to quickly retrieve NFT, game, and wallet address fund flow tracking data from over 30 public chains.
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