Exploring Blockchain Gaming: Recap of 2023 and Sneak Peek into 2024

by Victor Dey

Revealed: January 17, 2024 at 10:30 pm Up to date: January 17, 2024 at 4:02 am

by Victor Dey

Edited and fact-checked:
January 17, 2024 at 10:30 pm

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In Transient

• The sport marketcap skilled a extra subdued upward development in comparison with BTC all year long, with a noticeable uptick in the direction of the top of the 12 months.
• In 2023, solely 6% of the whole 2,876 video games had greater than 1,000 energetic pockets on the blockchain, down from 10% in 2022.
• In 2023, whole quantity of blockchain video games declined from the 2022 peak, however transaction knowledge signifies stability.
• In 2023, recreation high quality is bettering and AI is altering the trade. Layer 2 blockchains are evolving however enduring blockchains like Binance nonetheless take the lead.
• Market is anticipating top-tier crypto video games in 2024, and GambleFi could rise however nonetheless face regulatory stress.
• Crypto gaming primarily based on platform equivalent to Telegram or X(Previously Twitter) is a brand new development.

Blockchain video games are thought-about an necessary catalyst for the widespread adoption of Web3 know-how. In contrast to different advanced domains, the idea of in-game currencies and recreation objects in conventional video games existed lengthy earlier than the emergence of cryptocurrencies in blockchain. This makes blockchain video games a extra accessible entry level for most of the people.

The blockchain recreation market has skilled a major decline of 83.8% in annual buying and selling quantity (from $20 billion to $3.2 billion) in comparison with 2022. Nonetheless, recreation builders are actively working in anticipation of the upcoming bull market by engaged on safety, scalability and throughput of video games and their infrastructure. Builders on this trade have been actively in search of measures to contain extra folks within the subject, together with initiating collaborations with and studying from conventional recreation giants to enhance recreation high quality.

As per a16z’s 2024 outlook, the blockchain gaming trade is evolving from a play-to-earn mannequin to a play-and-earn ecosystem by re-emphasizing the significance of playability, which is the essence of gaming.

Furthermore, synthetic intelligence is revolutionizing varied fields, together with blockchain gaming, by rising productiveness and unlocking new gaming prospects. 

With these important developments, we anticipate blockchain gaming to develop exponentially within the coming years. Our report analyzes the efficiency knowledge of blockchain gaming in 2023 and discusses potential developments for 2024, offering a worthwhile reference for the market.

Recreation Knowledge for 2023: Quantity Declined, however Transactions Stay Steady

In 2023, Bitcoin (BTC) regularly recovered from the crash in 2022, witnessing a notable enhance in its market capitalization, leaping 159% from $319.97 billion to $828.35 billion. Conversely, the sport marketcap skilled a extra subdued upward development in comparison with BTC all year long, with a noticeable uptick in the direction of the top of the 12 months.

Whereas the variety of video games continues to develop, person engagement has dropped considerably. In 2023, the variety of video games in the marketplace jumped from 2,070 to 2,780. Nonetheless, solely 6% of the whole 2,876 video games had greater than 1,000 energetic pockets on the blockchain, down from 10% in 2022. This means that blockchain video games have been unable to draw customers, with the standard of blockchain video games declining in comparison with the earlier 12 months.

Key trade gamers are optimizing their structure, reflecting confidence that the present downturn is non permanent. 

In 2023, whole quantity declined from the 2022 peak, however transaction knowledge signifies stability. This development underscores the trade’s dedication to bettering the infrastructure for seamless on-chain operations and bettering the person expertise. For instance, SUI efficiently addressed issues about blockchain throughput by efforts equivalent to SUI 8192, with each day transactions reaching 20 million in July 2023. 

We are able to see that the trade is strategically positioning itself to capitalize on the constructive shift in sentiment when it lastly happens.

Highlights of 2023: Video games and Blockchains Bettering, However On-chain Knowledge Lags

Recreation High quality is Bettering and AI is Altering the Business

• Play-to-earn is evolving into play-and-earn.
• Web2 studios more and more embracing Web3 applied sciences.
• The combination of AI underscores its significance.

In accordance with Footprint Analytics, Web3 video games had fewer energetic gamers in 2023 than in 2022. Nonetheless,  the general progress continued with the development of mass adoption and bettering person expertise. The trade is transferring away from a particular give attention to crypto-native gamers.

In anticipation of the approaching of the bull market, folks within the recreation trade by no means stopped improvement. In 2023, 4 tokens skilled a outstanding enhance of over 500%. The highest performer was Nakamoto Video games, a Web3 gaming hub with greater than 200 stay video games, and its token jumped a formidable 1931.55%.

Different video games with token development in extra of 500% embrace HYTOPIA, Fabwelt and Advantage Circle, that are main gaming platforms, underscoring the viability of tasks with sturdy ecosystems even in difficult market situations.

An apparent development in 2023 is that play to earn will turn into play and earn. It’s primarily represented by Web2 corporations paying extra consideration and placing extra assets into the blockchain recreation, utilizing capital and expertise to make this new subject filled with vitality.

There are already profitable examples of Web2 corporations thriving within the Web3 area. One such instance is HYTOPIA, which has seen its token enhance by a formidable 1086.75% this 12 months. HYTOPIA has its origins in Mojang Studios’ 2009 sandbox recreation Minecraft.  

Furthermore, the famend AAA recreation Illuvium has collaborated with quite a few mainstream leisure corporations from Web2. We are able to see the rising curiosity of Web2 studios to enter the blockchain area, even conventional gaming giants like Ubisoft and Sq. Enix are exploring this area.

In 2024, the mixing of AI into gaming will turn into more and more obvious. AI is disrupting conventional productiveness fashions, enabling small groups to effectively create high-quality video games. Furthermore, it has the potential to enhance responsiveness to participant wants, enabling speedy changes to recreation steadiness and mechanics by analyzing participant knowledge and suggestions. 

At this early stage, nonetheless, the complete extent of AI’s affect stays elusive and awaits additional exploration by trade builders.

Layer 2 Blockchains are Evolving however Enduring Blockchains like Binance nonetheless Take the Lead

• Layer 2 blockchains made notable technical developments, capturing market consideration.
• Enduring blockchains, together with Binance, Polygon and Ethereum, nonetheless dominate the market, with over 80% of the sport depend.

2023 has confirmed to be a major 12 months for Layer2 blockchains, marked by the rise of notable tasks. 

In July, SUI demonstrated spectacular metrics and proved the facility of the Layer2 blockchain. In August, Base made waves with good friend.tech, combining social interactions with an leisure ecosystem. Ronin additionally gained momentum in November, largely resulting from its affiliation with Axie Infinity and the launch of Pixels.

In 2023, rollup know-how advanced quickly, with Arbitrum and Optimism collectively accounting for a formidable 83% of whole worth locked (TVL) in Layer 2 as of December 31. Regardless of this, Layer 2 blockchains designed for gaming are nonetheless working to determine a distinguished market share. Whereas Optimistic rollups are most popular for DeFi resulting from their user-friendly nature.

Via evaluation, we discovered that main blockchains like BNB chain, Polygon, Ethereum nonetheless comprise 80% of all energetic video games, dominating the present market.

Funding and Funding in 2023

In 2023, the gaming trade skilled a slowdown in funding, influenced by each FTX and regulatory elements. There have been a complete of 131 funding offers in 2023, amounting to $983.9 million, a major decline from the spectacular $2.6 billion of the earlier 12 months. This decline signifies a extra cautious method by traders.

The trade’s prime occasion was from Nexon, a large within the gaming trade with a present valuation of $27 billion, who invested $100 million within the growth of its Web3 mental property, MapleStory Universe for its operation. 

Prospect in 2024: Surge in Prime Video games and Consumer Migration from Web2 Platforms

• Market is anticipating top-tier crypto video games

The blockchain gaming trade is eagerly awaiting the potential arrival of high-quality video games, equivalent to AAA video games. 

Many video games ought to have made important progress for the reason that funding surge in 2022, as recreation‘s’ improvement cycles are sometimes over 2 years. 

The established affect of Web2 giants is positioned to have a major affect on the blockchain gaming sector as they enter the Web3 area through the upcoming bull market. Recreation studios with expertise creating Web2 video games can leverage their experience to create enjoyable gameplay mechanics for the Web3 recreation trade, whereas the mixing of blockchain know-how guarantees to extend the transparency, safety and alternatives related to in-game property and economies.

• GambleFi could rise however nonetheless face regulatory stress

Because the presidential election 12 months unfolds and the sports activities betting trade continues to evolve, platforms like Rollbit are making important strides, with reported income reaching roughly $300 million inside a 12 months. The method of utilizing on-chain destruction to trace income has attracted consideration, though the accuracy of this methodology stays unsure.

Regardless of dealing with regulatory challenges, GambleFi has turn into one of many highest-grossing functions within the crypto area, demonstrating the immense potential of blockchain-based gaming and betting platforms.

• Crypto gaming primarily based on platform equivalent to Telegram or X(Previously Twitter) is a brand new development

Because the crypto neighborhood seeks mass adoption, tapping into the huge person bases of Web2 platforms equivalent to Telegram and Twitter has emerged as a wise method. 

Animoca Manufacturers’ collaboration with The Open Community (TON) blockchain stands out as a major instance on this area. As the first validator for TON, Animoca Manufacturers is facilitating a transition for present Web2 customers into the realm of Web3 mini-applications. This partnership is not going to solely enhance person engagement, but additionally add important use-case worth to Web3 functions.

As blockchain gaming continues to evolve, leveraging the strengths of established platforms and integrating them with the progressive capabilities of blockchain know-how will play a crucial position in driving adoption and shaping the way forward for the trade.

Knowledge Supply: Blockchain Recreation Annual Report of 2023

Footprint Analytics is a blockchain knowledge options supplier. It leverages cutting-edge AI know-how to assist analysts, builders, and traders flip blockchain knowledge and mix Web2 knowledge into insights with accessible visualization instruments and a strong multi-chain API throughout 30+ chains for NFTs, GameFi, and DeFi.

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About The Writer

Victor is a Managing Tech Editor/Author at Metaverse Publish and covers synthetic intelligence, crypto, knowledge science, metaverse and cybersecurity throughout the enterprise realm. He boasts half a decade of media and AI expertise working at well-known media shops equivalent to VentureBeat, DatatechVibe and Analytics India Journal. Being a Media Mentor at prestigious universities together with the Oxford and USC and with a Grasp’s diploma in knowledge science and analytics, Victor is deeply dedicated to staying abreast of rising developments.
He affords readers the newest and most insightful narratives from the Tech and Web3 panorama.

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Victor Dey

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Victor is a Managing Tech Editor/Author at Metaverse Publish and covers synthetic intelligence, crypto, knowledge science, metaverse and cybersecurity throughout the enterprise realm. He boasts half a decade of media and AI expertise working at well-known media shops equivalent to VentureBeat, DatatechVibe and Analytics India Journal. Being a Media Mentor at prestigious universities together with the Oxford and USC and with a Grasp’s diploma in knowledge science and analytics, Victor is deeply dedicated to staying abreast of rising developments.
He affords readers the newest and most insightful narratives from the Tech and Web3 panorama.