Web3 Game Monthly Report: Growth is Traceable, but Predicaments Remain
Despite the trading market remaining subdued, the capital market's long-term confidence in blockchain games remains strong. In the midst of market turmoil, the projects that survive are more promising.Author: lesley@footprint.network
On May 13, Line's NFT subsidiary plans to release five NFT games in 2023. An increasing number of game developers and projects are emerging, and web3 games are no longer just a symbol of speculation, but rather there are truly more projects delving into this space. However, the decline in trading volume and the decrease in user numbers indicate that genuine web3 games are still scarce.
Currently, high-quality games that can operate long-term without relying on hype are still few. However, truly good games are built on interesting gameplay, a large base of supporters, and lasting appeal, rather than chasing short-term profits.
The data in this report comes from Footprint Analytics' GameFi Research page. This page provides an easy-to-use data dashboard that includes the most important data metrics to understand the GameFi industry, updated in real-time. You can click here to find the latest information on GameFi-related prices, individual projects, funding rounds, and more.
Key Points
Cryptocurrency Macro Overview
- Bitcoin (BTC) opened at $28,074 in May, peaked at $29,528 on May 5, and then dropped to $27,223 on May 31.
Web3 Game Market Overview
- The overall trading volume in the web3 game market is on a downward trend, and the number of users saw a significant drop at the beginning of the month, only slightly rebounding by mid-May.
- The total number of active games in the market increased to 1,004, compared to 979 in March and 1,001 in April, with more new games entering users' sights.
Web3 Game Public Chain Data
- In the web3 game market, BNB Chain, Ethereum, and Polygon dominate, with games on these chains accounting for 75% of the total number of games.
- Currently, the daily active user count in the blockchain game market remains around 900,000. Polygon users increased at the end of April and the beginning of May, then returned to normal levels.
Web3 Game Project Overview
- Axie Infinity maintains its leading position with a trading volume of $6.6 million.
- In terms of token prices, Zodium's token ranked first in May with a 130% increase.
Web3 Game Investment and Financing Overview
- The total financing amount in May reached $79.1 million, a 76% increase from $45 million last month.
- However, compared to April, the number of funding rounds decreased from 12 in May to 8.
Cryptocurrency Macro Overview
Bitcoin (BTC) opened at $28,074 in May, peaked at $29,528 on May 5, and then dropped to $27,223 on May 31. Throughout the month, Bitcoin's price slightly decreased by 0.5%.
However, as a reference indicator for market health, Bitcoin has risen over 64% year-to-date (compared to $16,605 on January 1). Ethereum (ETH) shows a similar trend, with a decrease of less than 1% in May, while it has risen 58% year-to-date.
However, the market should not develop a false sense of security due to the current stable price trends of Bitcoin and Ethereum. This month, Bitcoin's on-chain transaction volume significantly decreased by 13.3%. This indicates a reduction in Bitcoin's trading activity.
Web3 Game Market Overview
The web3 game market in May showed signs of slowing down, related to the sentiment in the cryptocurrency market and global economic uncertainties.
Web3 Game Daily Txns \& Daily Active Users
Data from Footprint Analytics shows that the overall trading volume in the web3 game market is on a downward trend, and the number of users saw a significant drop at the beginning of the month, only slightly rebounding by mid-May. This downward trend is within a controllable range and is not an absolute negative sign, but rather gives web3 games the opportunity to consolidate and improve their technology and design before the next wave arrives.
However, game developers have not stopped their efforts. By the end of May, the total number of active games in the market increased to 1,004, compared to 979 in March and 1,001 in April, with more new games entering users' sights. The number of newly launched games in the market slightly increased in May, reaching 60, bringing the total number of games in the market to 2,381.
Although the number of new games in May rebounded, the growth rate was relatively slow. As the hype around games gradually fades, high-quality games with solid gameplay and well-designed token economics may gain more attention and lead a new round of market growth in the future.
Web3 Game Public Chain Data
In the web3 game market, BNB Chain, Ethereum, and Polygon three public chains dominate, with games on these chains accounting for 75% of the total number of games.
Currently, the daily active user count in the blockchain game market remains around 900,000. Polygon users increased at the end of April and the beginning of May, then returned to normal levels. This indicates that Polygon attracted a batch of short-term users, possibly due to marketing activities, but did not generate long-term effects.
The SUI blockchain has promising prospects, as Mysten Labs raised $300 million last year to provide high-end gaming on the Sui Layer 1 blockchain. With the SUI chain going live on May 3, it is expected to enhance its influence and provide a platform for better immersive gaming experiences.
Despite nearly 12 months of market downturn, the web3 gaming industry continues to innovate and will attract more users and investors in the future.
The market winter is the best time to improve project quality.
Although the overall cryptocurrency market remains volatile, high-quality projects with strong fundamentals should continue to attract users based on their own merits, rather than relying on speculative hype or manipulating market sentiment to draw attention.
Web3 Game Project Overview
As of May 31, Axie Infinity maintains its leading position with a trading volume of $6.6 million, demonstrating its strong liquidity and solid position. This achievement is attributed to Axie Infinity's continuous efforts to optimize the game. This month, Axie Infinity took a series of actions, launching the iOS version in its key markets and introducing a feature for users to create unique and customizable PFP avatars, highlighting its focus on game design and expanding its user base. Battlefly and Illuvium also performed well in terms of trading volume, ranking second and third among all games.
Daily trends - Ranking \& Trends
In terms of token prices, Zodium's token ranked first in May with a 130% increase, followed by Taroverse and Victoria VR. However, a significant price increase alone does not determine a project's profitability.
It is important to note that projects with large price increases are not necessarily the most well-known projects, indicating that price increases are driven by speculation and hype rather than strong support from the project's design and user base. A rapid price increase alone does not prove the project's high quality and sustainability.
In terms of active users, on May 31, Alien Worlds led with 233,684 active users, followed by Sweat Wallet with 90,189 active users, and Splinterlands with 74,876 active users, which is a remarkable achievement in a bear market.
Web3 Game Investment and Financing Overview
Monthly Gaming Fundraising Amount \& Times
In May, the total financing amount reached $79.1 million, a 76% increase from $45 million last month, but the number of funding rounds decreased from 12 in April to 8 in May.
The larger investment amounts reflect investors' confidence in the industry and recognition of its long-term potential. However, the slight decline in the total number of financings indicates that the market is still in a downturn.
The most notable investment events this month include M80, Pomerium, and Illuvium, which raised $3 million, $20 million, and $10 million respectively, performing well despite the overall market sentiment remaining low. These projects are worth continued attention.
The gaming financing data for May indicates that despite the trading market remaining subdued, the capital market's long-term confidence in blockchain games remains strong. Projects that survive the market turbulence are more promising.
This Month's Web3 Game News
- Line reveals five "player-first" NFT games to be released in 2023
- Blockchain game Illuvium completes $10 million financing, led by Framework Ventures
- Axie Infinity: Origins to be launched on Apple App Store in parts of Latin America and Southeast Asia
- Axie Infinity introduces PFP avatar minting feature usable as digital identification
- Web3 game studio Pomerium secures $20 million in angel investment
- PancakeSwap (CAKE) launches gaming project, CAKE price rises by 20%
This article is contributed by the Footprint Analytics community.
