Published on: 22/02/2023
Gamers account for half of January blockchain activity, report says
According to a new report from DappRadar, blockchain gamers accounted for 48 percent of all blockchain activity in January 2023.
The report came after a decline in play-to-earn blockchain gaming over the past year as developers focused on improving the overall gaming experience.
The market caps of top gaming tokens also saw an increase of 122 percent on average in January, with Gala (GALA) — the digital utility token of the Gala Games ecosystem — seeing a surge of 218 percent.
The report also suggests that the increase in interest in gaming tokens was tied to the increasing industry buzz. For instance, a mobile gaming studio acquired by Gala Games has a portfolio of 15 games and over $20 million in assets under management.
DappRadar Blockchain analyst Sara Gherghelas said that blockchain gaming would likely continue as a significant sector in the industry based on on-chain metrics from the past two years.
“This is because blockchain gaming is already a vertical in the traditional industry. As blockchain gains more traction, it will bring more adoption to Web3 games which will become mainstream.”
Sara Gherghelas, DappRadar blockchain analyst
Investment in blockchain gaming
The top three blockchain gaming ecosystems, except for the Build N Build (BNB) Chain, all saw an increase in gaming protocols from the end of 2022 to the beginning of this year. With 331,000 unique active wallets, the Wax blockchain remained the most active.
The start of 2023 witnessed increased activity due to substantial funding, which sets the stage for what is dubbed blockchain gaming’s “buidling” year. This term represents the industry’s focus on building more powerful, high-quality games.
Gherghelas pointed out that investments into the vertical are “increasing significantly,” with an overall investment of around $7.6 billion in 2022 — a 105 percent increase from 2021. Additionally, investments into the blockchain gaming industry in January alone surpassed $156 million.
The report also indicates that the metaverse has played a significant role in driving the surge of blockchain gaming activity in 2023.
In January, virtual world-related games saw a trading volume of $44.5 million, a 114 percent increase from the previous month, despite a 19 percent decrease in sales.
The success of leading metaverse platforms such as The Sandbox and Decentraland contributed to this growth, with both experiencing an increase in trading volume of 114 percent and 83 percent, respectively.
Web3 gaming: Growth and challenges
DappRadar’s report suggests that gaming is currently the fastest-growing sector in the blockchain space, surpassing decentralized finance (DeFi) and non-fungible tokens (NFTs).
However, while Web3 gaming is growing rapidly, it still needs to address certain challenges to attract a wider audience.
Blockchain games used to adopt the play-to-earn model to gain attention, but the P2E model’s sustainability has been questioned due to the recent bearish market and token price crashes.
As a result, the next generation of Web3 games must focus on alternative economic models that prioritize player empowerment.
The problem with P2E games is that many do not cater to gamers or incorporate engaging gameplay for casual players. The model emphasizes profit-making while neglecting the entertainment factor.
Neon Link is a prime example of developers addressing key issues in Web3 gaming. This multi-layered gaming ecosystem features a digital wallet, exchange, marketplace and bridge while also prioritizing gameplay.