Web3 Games July Insights: A Tipping Point Towards Mainstream Adoption?

Author: lesley, footprint network

In July 2023, there was a slight growth in the Web3 gaming sector, but user adoption remains a continuing challenge for many projects. According to data from Footprint Analytics, the number of active blockchain games slightly increased to 2,471. However, only 9% of these (226) had monthly active users exceeding 1,000.

Despite a decrease in funding compared to previous months, investments such as Binance Lab's $15 million support for Xterio demonstrate ongoing interest in the potential of Web3 gaming. Sui 8192 also made waves by implementing frictionless blockchain gaming with no barriers to entry. Its rapid user adoption showcases the vast prospects of games integrated with blockchain.

Web3 gaming still faces challenges such as the sluggish cryptocurrency market, but its core value propositions of ownership and interactivity continue to attract developers and users. With better-designed economic models and a more seamless user experience, Web3 gaming may soon reach a critical mass for mainstream adoption.

This report's data comes from Footprint's GameFi research page. It is an easy-to-use dashboard that contains the most important statistics and metrics about the Web3 gaming industry, updated in real-time. You can click here for the latest information on prices, projects, funding, and more.

Key Highlights

Overview of the Cryptocurrency Market

• Despite price surges, Bitcoin closed at a lower price of $29,230 in July, down about 4% from the opening price of $30,587 on July 1.

Overview of the Blockchain Gaming Market

• Among the 2,471 games in the market, only 679 had on-chain monthly active users exceeding 10.
• The peak user interaction in July occurred on July 28, with 1,014,190 users participating in various projects and games.

Development of Blockchain Gaming Public Chains

• In terms of active users, the BNB chain accounted for 30.5%.
• Sui 8192, a fully on-chain game built by Ethos on the Sui chain, showcased impressive user and transaction data, successfully breaking the entry barrier for blockchain gaming.

Overview of Blockchain Gaming Projects

• The combination of sports and blockchain technology offers a new perspective on participation, interactivity, and true ownership of in-game assets.
• The cryptocurrency market experienced significant price fluctuations, with StarShip's price changes being the most notable.

Funding and Investment in Blockchain Gaming

• In July, there were only two rounds of funding related to gaming projects. Since April, the number of funding rounds has been on a downward trend.
• Delabs Games raised $4.7 million for development on Polygon.
• Binance Labs invested $15 million in the Web3 gaming startup Xterio.

Key Developments This Month

• Footprint launched a comprehensive GameFi data solution and provided free APIs for all developers.
• The Google Play Store officially allowed NFT games, excluding gambling games, to be listed.
• The developers of StepN launched a social MMO game called Gas Hero.
• Meta is committed to reviving its lagging Horizon Worlds metaverse platform through new internal game studios.
• The blockchain game Sui 8192 surpassed the activity level of the Solana chain.

Overview of the Cryptocurrency Market

Throughout July 2023, Bitcoin's value fluctuated mainly between $29,000 and $31,000. Bitcoin reached a yearly high of $31,400 on July 13, the highest since July of the previous year.

Market Cap: GameFi Tokens vs BTC

However, despite the price surge, Bitcoin ended July at a lower price of $29,230, down about 4% from the opening price of $30,587 on July 1.

The sluggish summer trading activity and lack of short-term positive factors may have contributed to Bitcoin's decline.

However, as Rachel Lin, CEO of decentralized futures exchange SynFutures, pointed out, Bitcoin's drop below $30,000 may just be a brief correction within an overall bullish trend. This perspective reinforces Bitcoin's sustained trading range between $29,000 and $31,800 since mid-June, unaffected by factors such as interest rate hikes, inflation concerns, and other macroeconomic worries.

Overview of the Blockchain Gaming Market

In July, the number of games continued to grow, increasing from 2,459 in June to 2,471.

Monthly Active Games by Active Gamers

However, among these 2,471 games, only 679 had on-chain monthly active users exceeding 10, and only 226 games had on-chain active users exceeding 1,000, accounting for 9% of all games. This contrast highlights the significant challenges faced by a large portion of these games—limited user adoption.

Game Active Users

In July, the peak user interaction occurred on July 28, with 1,014,190 users participating in various protocols and games. On that day, Alien Worlds stood out with 202,533 users, capturing nearly 20% of the entire market, highlighting the importance of leading games in driving total active user numbers. However, on July 30, user engagement slightly declined, with active users dropping to 692,940.

The number of transactions this month started at 19.63 million and gradually decreased to 18.09 million by the end of the month. Despite these fluctuations, the overall trend remained stable.

Development of Blockchain Gaming Public Chains

Active Games Shared by Chain

This month, 1,177 active games maintained user engagement. Notably, in terms of active users, the BNB chain accounted for 30.5%.

As of July 31, two outstanding games in the BNB ecosystem successfully attracted over 10,000 active users: "Hippo Dash" developed by Gameta and "SecondLive." This achievement highlights the ability of these games to attract a large audience, emphasizing the critical role of innovative gameplay and engaging concepts in generating mass user participation.

In the current blockchain gaming landscape, significant entry barriers still exist. However, Sui 8192 has broken through the entry barrier for blockchain gaming with its compelling user and transaction data.

SUI 8192

The rules of Sui 8192 are simple: move numbered blocks in four directions, merging blocks with the same number to accumulate their values until reaching the target number 8192. Surprisingly, each move of a block triggers a transaction, changing the state of the game object. Although seemingly simple, Sui 8192 holds immense potential in the gaming industry. It not only democratizes blockchain gaming, allowing players to access the game through any internet-connected device, but also injects permanence into the game itself, integrating it into the players' digital assets. While trading or gifting games may not be very practical at the moment, this functionality sets a pioneering example for future DApps.

Every move in the game as a transaction can be processed quickly and seamlessly integrated into the online experience, showcasing the power of the Sui network. The potential of Sui lies not only in its ability to process transactions in parallel but also in its horizontal scalability by adding nodes to meet growing demand. This dual capability ensures that even as more games and decentralized applications migrate to the platform, transaction fees remain low.

In the initial days following the launch of the Sui mainnet, over 40 games have fully leveraged Sui's transformative potential. This clearly indicates that Sui's vision extends beyond the boundaries of "blockchain gaming." It empowers game developers with the possibility of enriching player experiences through Web3 gaming.

Overview of Blockchain Gaming Projects

Ethereum Hot Games

The blockchain game Sorare on Ethereum has attracted widespread attention and has become a leader in user engagement. Last month, Sorare had 3,037 active users, achieving impressive results, surpassing The Sandbox and Axie Infinity in user numbers.

Sorare

As a blockchain-driven game, Sorare introduces a novel concept where users (referred to as managers) can buy and trade non-fungible tokens (NFTs) representing top athletes and participate in competitive events, allowing users to engage in their favorite sports in an innovative and immersive way.

Ultimate Champions New Users

Similarly, Ultimate Champions remains ranked first in Polygon games and has secured second place on the BNB chain. Ultimate Champions is a unique free virtual football and basketball game that showcases officially licensed digital cards hosted as NFTs on the blockchain.

This success highlights the strong synergy between sports and blockchain gaming. The combination of sports and blockchain technology offers a new perspective on participation, interactivity, and true ownership of in-game assets.

Token Price Change

The cryptocurrency market experienced significant price fluctuations, with StarShip's price changes being the most notable. As a project running on the BNB chain, StarShip experienced a remarkable surge, with a price increase of an astonishing 790.67%. This rapid rise is primarily attributed to the successful launch of the game, capturing the attention and interest of investors.

Following closely is the well-known Decentral Games, another player in the blockchain gaming space worth noting.

Funding and Investment in Blockchain Gaming

In July, there were only two rounds of funding related to gaming projects. Since April, the number of funding rounds has been on a downward trend.

Monthly Gaming Fundraising Times

Although funding events have temporarily decreased, the long-term potential of blockchain gaming remains promising.

Xterio, a prominent player in the Web3 gaming space, successfully secured a $15 million investment from Binance Labs. This funding injection will accelerate Xterio's game and technology development, focusing on integrating artificial intelligence (AI) and launching its own token, among other cutting-edge features. Xterio's innovative approach includes a free gaming platform and "GameFi as a Service" products, aligning with the trends of interactive and decentralized gaming experiences.

Meanwhile, blockchain game developer Delabs Games raised $4.7 million in seed funding. Delabs Games focuses on building games on the Ethereum scaling network Polygon and will utilize the raised funds to enhance game development and strengthen marketing and community engagement.