blockchain games

‘Tens of millions’ to enter Web3 through gaming in 2024 — GameFi execs

Gaming studio founders Yat Siu and Johnson Yeh think more people are coming to Web3 next year — and blockchain games are why.

Crypto market hype and the “commercial release” of several highly anticipated blockchain games will likely onboard “tens of millions” gamers to Web3 in 2024, according to Web3 gaming execs.

“2024 is a growth year in terms of bringing people on to Web3,” said Yat Siu, co-founder of gaming and venture firm Animoca Brands, in an interview with Cointelegraph.

In the last three months, around 1 million — or more — unique active wallets have played Web3 games daily, according to DappRadar data. However, Siu believes there could be up to 100 million more next year.

Web3 firm sees future where gamers rent out their in-game assets for crypto

Polemos co-founder Richard McLaren believes the future of blockchain gaming will involve gamers and developers renting out their in-game NFTs for profit.

Imagine a future where a player is able to rent an in-game item via blockchain, giving them tools to pass a difficult level, or borrow a nonfungible token (NFT) that gives them the ability to try a new game on their wishlist.

Such a feature is one that Polemos co-founder Richard McLaren is hoping will one day become the norm, along with an economy where players rent out their in-game assets for a fee.

In an interview with Cointelegraph, McLaren announced a new partnership between his gaming infrastructure service Polemos and fantasy battle game Illuvium, a move he said would help break down barriers for players looking to get started on Illivium’s platform.

DeFi, NFT, blockchain games: Key takeaways from DappRadar’s 2022 review

Despite a tumultuous year, DeFi, NFTs and blockchain games drove DApp usage across the industry, according to DappRadar’s 2022 report.

2022 will go down as a challenging year for the cryptocurrency and blockchain space, but the adversity faced has been strewn with plenty of positives for the decentralized application (DApp) ecosystem.

DappRadar has released its yearly report on the industry, focusing on challenges faced alongside notable technological achievements and an increasing number of active daily users.

Cointelegraph highlights the main takeaways from the DApp industry in 2022, which are pertinent, considering macro factors like inflationary concerns in major economies, the collapse of industry-specific projects like Terra/Luna and FTX, as well as market woes across the board.

Perhaps most telling is unique active wallet data (UAW) from 2021 and 2022, demonstrating a 50% increase in the average daily UAW year on year. This is up from 1.58 million daily users in 2021 to an average of 2.37 million daily active users in 2022.

It must be noted that there was a downtrend of DApp users from February 2022, which DappRadar associated with the escalating war in Ukraine as well as crypto-specific black swan events, including Terra/Luna and FTX’s collapse.

The decentralized finance (DeFi) industry was particularly affected in the wake of Terra’s TerraUSD (UST) depeg and the resulting cryptocurrency market decline, with a significant drop in total value locked (TVL) of around 73% to $55 billion as of December 2022.

Layer-1 DeFi protocols saw the biggest drop in TVL, with Ethereum experiencing a 74.5% reduction to $32.12 billion TVL, while the second biggest DeFi ecosystem, BNB Chain, recorded a 62.5% drop in TVL in 2022. Layer-2 protocols fared slightly better, with Arbitrum falling 12% to $1.74 billion. Optimism’s TVL increased by 127.60%, hitting $669 million.

On-chain data for nonfungible token (NFT) trading volume was in contrast to DeFi’s year-to-date. NFT trading volume increased by just 0.41% year on year, while the number of unique traders increased by a staggering 876% to reach 10.6 million users in 2022. NFT sales also trended positively, increasing by 10.6% to reach 68.35 million. OpenSea remains the most popular NFT marketplace, accounting for 73% of organic NFT trading volume.

Blockchain games played a significant role in the DApp space, accounting for 49% of activity in 2022, with an average of 1.15 million daily UAW. In total, the sector produced 7.4 billion transactions this year.

Blockchain-powered trading card game Splinterlands was the most popular platform, according to DappRadar, growing by 85% to reach 217,914 monthly unique active wallets in 2022.

Terra’s implosion accounts for $40 billion of funds lost, while DappRadar estimated the median loss per hack was around $283,000 and losses per month were pinned at $728 million.

DappRadar integrated 49 blockchains, tracked 13,000 DApps and 13,500 NFT collections and noted that the increased number of DApps reflects the resilience and potential of the sector, with projects continuing to build and innovate despite a challenging macro environment.

Hacks, thefts and rug pulls are also featured in DappRadar’s 2022 review. A total of 312 attacks resulted in total losses of $48.74 billion across the board, the highest amount on record since Bitcoin’s inception back in 2009.

NFT games are ‘only scratching the surface’ of what’s possible — Animoca’s Yat Siu

Yat Siu thinks it’s only a matter of time until more advanced models of NFT gaming are created, designed around the ideas of digital ownership, interoperability and economic utility.

Animoca Brands co-founder Yat Siu believes nonfungible token (NFT) games are only scratching the surface of what’s possible and predicts completely new models of gaming will be developed as a result of digital ownership.

Speaking to Cointelegraph, Siu likened the potential growth of NFT gaming to mobile phone gaming, which started out relatively niche and clunky in its formative stages before rocketing to become the most popular method of gaming across the globe.

“Mobile gaming brought a form factor of a type of game that we’ve never seen before, you know, one-hand play and that kind of stuff, and innovations around how you play with AI [artificial intelligence]. Because of the fact that you have this limited form factor, it became the most popular form factor in gaming,” he said.

Siu commented that while many blockchain games themselves also have a clunky experience at this stage, the whole sector is still quite new. As such, it is only a matter of time until more advanced models are created that are designed around the ideas of digital ownership, interoperability and economic utility for the user:

“With NFT games, we’ve only really scratched the surface. Everyone’s very focused on ownership. […] I think it’s going to mushroom into everything and we’re going to see new kinds of game formats emerge because of the ownership that we weren’t able to do before.”

In the interim period, Siu pointed to metaverse gaming platforms and massively multiplayer online games as models that fit well with NFTs, as you “can trade items and you have deep levels of economic design” that make sense.

The Animoca co-founder also argued that many current users are willing to accept that the blockchain gaming experience is not necessarily smooth at this stage.

He suggested that this was because they are aware of the significance of being able to own a stake in the games, as opposed to the traditional model in which people sink capital into games that they can never retrieve:

“I mean, when you think of this [blockchain games], you could say it’s a UX [user experience] nightmare. But, because of ownership, people put up with it not just because it’s valuable, but because it’s meaningful because this is my land, this is my car.”

Asked when NFT technology will get to a point of seamlessness that even a grandmother can use it without being aware of it, Siu emphasized this would likely be through the widespread tokenization of physical things, NFT integration with commonly used services and how people interact with each other.

He outlined that as the world continues to become more digitally focused, children will of course want digital things.

“Grandma is probably going to buy a digital item for their grandchildren as a way to not just as a gift that’s relevant to them, but also as a way to interact,” he said, adding that vice versa, a grandchild could even gift their grandmother a digital illustration that they drew:

“We’re going to have a digital world. These digital artifacts and art and creativity and games and utility that’s going to be mushrooming in the thousands and thousands and thousands of small medium enterprises that are going to be doing this.”

GameFi could be the answer to unemployment for some — Aussie game studio

The executives say traditional jobs are increasingly at risk through factors such as automation, but GameFi can provide a viable alternative to earn a wage.

Australian-based Web3 game studio Ninja Syndicate’s CEO and founder believe GameFi could usher in a new era where users can earn a living wage through blockchain games.

Speaking to Cointelegraph, founder John Nguyen and CEO Alex Dunmow said that traditional jobs are increasingly at risk through factors such as automation.

According to the game developers, blockchain games can and are playing a vital role for people to earn a living in the digital world through play-to-earn and move-to-earn.

The process often requires significant work, but Dunmow said many mainstream triple-A games already feature “grinding for hundreds of hours,” though the assets “provide no value for the player.”

In GameFi titles, digital assets can come in the form of nonfungible tokens (NFTs). Users can then take them to a marketplace and sell them for fiat currency or crypto, essentially earning a wage through gaming, argued Dunmow:

“NFTs can give you the technical ability to take ownership of a game asset out of the control of the publisher of the game.”

One of the best examples Dunmow has seen of people making a living through GameFi is a 2021 report about a community in the Philippines that turned to NFT gaming during COVID-19, which caused a shortage of workers in low-paying jobs, as they could earn wages playing blockchain games instead:

“I saw the whole situation as a positive. A group of people who were likely being exploited in their low-paying day jobs have found a way to earn wages in the Metaverse.”

Dunmow and Nguyen said the negativity around NFTs and blockchain in gaming present a challenge, but through their games, they hope to “subtly educate people about the benefits of NFTs.”

The game studio has been developing a set of blockchain games under the Supremacy World ecosystem, which involves building, fighting and mining resources within a fictional dystopian world where factions use giant mechs to fight for territory and power.

Supremacy will eventually combine four games: a battle arena that is already out, a first-person shooter, a massively multiplayer online game and a real-time grand strategy game.

Through the series of four interoperable games, the executives said they are creating an ecosystem where players have “sovereign ownership” over their digital assets and can use them in whatever way they want, explaining:

“What interoperable boils down to is being able to share digital assets between games.“

However, Nguyen noted that this interoperability also can also extend to “other game worlds, DeFi and PFP collection.”

“Supremacy will give people who own an NFT, whatever it may be, in-game assets in our world,” said Nguyen, adding that they recently were given a chance to design a custom mech skin for a user based on his Bored Ape Yacht Club brand NFT, noting that he can now connect his Ape and claim his custom skin based on his NFT.

Although given the time and resources required, Dunmow acknowledged they won’t be able to custom design something for every user, but he said it shows what is possible.

Dunmow said that at the heart of their game, they’re still trying to build a “fun game,” which he believes is vital to the industry’s survival, adding that “Attracting players from outside the crypto space is crucial, especially in bear markets:”

“You make a fun game that has blockchain elements and attracts mainstream players; you are now disconnected from market forces, and you’ll be able to survive any recession.”

On Oct. 5, Ninja Syndicate announced a new deal with NFT minting and trading platform Immutable X allowing i to build on Immutable X’s layer-2 ecosystem, joining projects including Illuvium, Gods Unchained and GameStop.

Blockchain gamers surge as users attempt ‘stacking crypto’ — DappRadar

Despite the FUD, blockchain games surged in active users in September, while God’s Unchained cracked the top 10 in terms of total NFT sales volume of all projects.

User activity on blockchain gaming decentralized applications (DApps) surged in September, with a host of games posting significant increases in the number of active users.

According to data from DappRadar, seven out of the top 10 games in terms of the number of “unique wallet addresses interacting with dapp’s smart contracts” increased over the past 30 days, with all of the top five games being in the green during that time frame.

At the time of writing, the DApps registering growth in the period include Web3 gaming platform Gameta, and blockchain-based games Alien Worlds, Solitaire Blitz, Benji Bananas and Splinterlands, Farmers World and Arc8 by GAMEE.

In a Sept. 27 blog post, DappRadar noted that eight of the current top 10 blockchain games are mobile-first, which could eventually “bring millions of users to the blockchain,” noting:

“Dapp games like Gameta, Benji Bananas, Upland, and Trickshot Blitz let anyone with a mobile device earn crypto with little prior knowledge, investment, or risk.”

“Using daily activities like hyper-casual mobile games as a hook ensures users find fun once they interact, while solid tokenomics can encourage everyday use and retention,” it added.

DappRadar said one of the possible reasons for a rise in popularity of blockchain games despite the bear market, is the idea of “bleed in the bear and run in the bull:”

“The idea that stacking crypto and investments in a bear market pays off in the bull is almost proven at this point.”

The biggest uptick in users came from Animoca Brands’ Benji Bananas (Polygon), which saw a 2016.54% increase over the past 30 days. Notably, this game was a Web2 mobile app until March this year. Animoca then introduced play-to-earn (P2E) elements via the Bored Ape Yacht Club-affiliated Ape Coin (APE).

While it is unclear what specifically saw the number of Benji Bananas users increase by so much, it did host a P2E gaming event this month that offered a series of valuable in-game NFTs to the winners.

*Blockchain gaming DApps activity: DappRadar*

Out of the top 10 games, only Axie Infinity, Trickshot Blitz and Upland saw decreases over the past 30-days.

The increase of blockchain gamers this month comes as publications such as Bloomberg note in a Sept. 28 article that the highly correlated NFT market trading “frenzy is almost dead.” It points to overall NFT trading volumes dropping 97% since January as evidence of such.

As Animoca Brands co-founder Yat Siu pointed out via Twitter on Sept. 30, purely looking at the metric of NFT sales volume doesn’t necessarily paint the whole picture in NFTs or gaming.

Siu highlighted that NFT prices have generally declined in accordance with the price of their paired assets such as Ether (ETH), while many games — that don’t often grab the headlines — require NFTs that are relatively cheap. He instead emphasized that user activity and the number of people entering Web3 is where the focus should be.

6/ Judging an entire market simply by one metric is imperfect you need to take a multifaceted lens eg. @TheSandboxGame has seen record growth in users in its last season despite the market and blockchain wallets continues to rise https://t.co/brvDgCAhqh

— Yat Siu (@ysiu) September 29, 2022

Gods Unchained breaks 10 top NFT sales

Meanwhile, NFT-based card battle game Gods Unchained has seen its NFT sales volume creep into the top 10 in NFT sales volume over the past 30 days, according to Cryptoslam.

Gods Unchained has seen a 373.25% increase over the past 30 days to sit at $10.8 million at the time of writing. This marks the first time the game has seen NFT sales top $10 million since January, and after a very slow February to August period.

Reasons behind this could be due to discussions of a “Season 2” upgrade to improve the game and lore in the works and GameStop offering free NFT packs to Pro members this month. Meanwhile, an esports tournament with a $70,000 prize pool was also announced at the start of this week.

Gods Unchained has also seen a significant increase in active users over the past 30 days, gaining 28.50% to sit at around 14,180 according to DappRadar. The game still has a long way to catch up to the top 10, however, as its user count places it at twenty-eighth.

Yat Siu: Asia GameFi opportunity huge as gamers don’t hate NFTs

The Animoca Brands co-founder suggested that Asian gaming companies don’t have to deal with the same amount of pushback against NFTs that U.S companies have faced.

Animoca Brands co-founder Yat Siu thinks that GameFi has the biggest opportunity for growth in Asia, as gamers there don’t hold the same vitriol toward nonfungible tokens (NFTs) as they do in the West.

Sitting down with Cointelegraph during Asia Crypto Week, Siu argued that Asia generally has more of a welcoming culture toward gaming and advancements in tech such as NFTs, digital property and play-to-earn (P2E).

“I think that Asia has the potential to really lead in blockchain gaming, at least in the short term. And there’s a couple of reasons why I think that’s the case. Not just because, you know, there’s the most gamers in this region of the world, but it’s also because gamers in Asia are welcoming NFTs.”

“Gaming companies in the West have to deal with consumer resistance that gaming companies in Asia do not have to,” he added.

The Animoca co-founder attributed this acceptance of NFTs to a broader Asian viewpoint on capitalism, which he suggested is viewed more favorably in the region — barring China — than in the United States, as people see it as a path out of poverty.

He pointed to examples such as South Korea, which “only four decades ago” had the same size economy as North Korea, but has swiftly climbed the global rankings through innovation, “creativity, legal frameworks and property rights” despite lacking natural resources.

“The consumer in Asia looks at capitalism as a net-good fight. In other words, okay, there is inequity. There’s a guy who made a lot of money, but people think ‘I can get there too, or I have an opportunity,’” he said.

Drawing a contrast to the U.S., Siu highlighted that capitalism draws a more demonized view by some people there, and rightly so as many people haven’t seen capitalism “work for them.”

He argued that this type of thinking ultimately bleeds into gamers pushing back on NFTs, as people worry about being priced out of the market with expensive NFTs that are seen as a “rich man’s tool:”

“When the headline news isn’t a $5 or $10 in-game NFT item, but a $300,000 Bored Ape well, then, you know it’s a little bit like saying the entire car industry is just Lamborghinis. That’s not true either. But that’s what we see. And so the rejection in the West comes from that lens.”

Expanding on the Asian context, Siu also emphasized that blockchain gaming is opening up access to venture capital from Silicon Valley that hasn’t really been tapped before, especially in the context of countries like the Philippines where P2E gaming guilds have become quite popular.

He again highlighted that this is due to a vibrant ecosystem that is growing in Asia as many gamers are adopting the tech while many projects are actively innovating in the space.

“Now you have companies like a16z, not just ourselves investing but also Silicon Valley money moving into Vietnam and Philippines. I think that’s unheard of. So that’s kind of exciting as well. I do think Asia is pointing toward a Web3 blockchain gaming future. Broadly speaking,” he said.

Bandai Namco, SEGA among gaming giants eyeing blockchain gaming

Big gaming firms are working to spur mainstream blockchain gaming adoption, and don’t want to “change that policy” even if it causes pushback from some.

Japanese gaming giants are positioning for mainstream blockchain game adoption and will not be swayed by the section of gamers that are against crypto and nonfungible tokens (NFTs), an executive from the Oasys blockchain project told Cointelegraph.

Speaking to Cointelegraph at the 2022 Tokyo Games Show last week, Oasys representative director Ryo Matsubara emphasized that the project’s big-name partners such as Bandai Namco, Sega and Square Enix are not just jumping on the crypto bandwagon — there’s a long-term vision for blockchain-based gaming:

“We have a shared vision about blockchain at the executive level. They don’t [want to] change that policy. They really understand the future adoption of blockchain. They’re not thinking about, you know, just the revenue, they want to create the next future [of gaming].”

Bandai Namco has developed beloved titles such as Tekken and Pac-Man, Sega’s most famous title is generally seen as Sonic the Hedgehog, while Square Enix is the developer of the widely popular Final Fantasy franchise.

Questioned whether these companies are looking to integrate blockchain tech with their current gaming franchises, Matsubara suggested that they are initially looking at developing brand new blockchain games instead.

He noted that as this is a completely “new model” of gaming, it needs more time to mature before these big companies will look at broader blockchain integrations with traditional games.

“When the model is fixed, becomes sustainable and successful, then strong [popular] IP will be added,” he said.

Looking at what needs to be improved in blockchain gaming, Matsubara noted that a “big problem” so far is that many projects are too dependent on the price of in-game tokens. As a result, there is more demand for “speculation” rather than the gameplay itself.

He went on to note that there will be an “adjustment” over time as projects work to develop genuine hype for the games themselves, most likely by improving the overall gaming experience.

This echoed similar sentiments to the lead community manager at Australia-based game developer and Animoca Brands subsidiary Blowfish Studios Luke Sillay, who was also at the event.

During an interview with Cointelegraph, Sillay emphasized that more people want games that are actually “fun to play” rather than just a hustle to earn tokens.

Oasys’ proof-of-stake blockchain is geared directly toward gaming and is tentatively set for an official mainnet launch in the remaining months of this year. Matsubara also hinted that games from its big-name partners will likely be announced next year.

Looking outside Japan, major western gaming companies such as Fortnite developers Epic Games have increased exposure to blockchain gaming of late. Last week the Epic Games store listed a new free-to-play NFT game called Blankos Block Party by Mythical Games.

The move follows comments from Epic Games CEO Tim Sweeney in July, in which he stated that his company “definitely” wouldn’t follow Microsoft’s Minecraft in banning NFT integrations in games.

VC firm Konvoy launches new $150M fund, eyes blockchain-based games

Gaming venture capital firm Konvoy launches new $150 million fund, with a portion set to be invested in cryptocurrency and blockchain-based games.

Venture capital firm Konvoy Ventures is set to fork out at least $30 million to back various cryptocurrency and blockchain-based games.

The American firm announced the launch of Konvoy Fund III, with $150 million in capital that it plans to invest in a variety of platforms and technologies in the global gaming sector. According to Bloomberg, up to 30% ($45 million) of the fund will be allocated to the crypto and blockchain gaming space.

Konvoy is no stranger to the world of cryptocurrencies and blockchain-based games. The firm boasts an impressive portfolio of gaming companies and projects which it has funded, including the likes of Axie Infinity creators Sky Mavis, Metaverse avatar platform Ready Player Me and open-world nonfungible token (NFT) game Genopets.

The firm has invested in a total of 35 companies to date through its first two funds across North America, Europe, the Middle East, Africa and South-East Asia.

Interest in blockchain-based games has increased over the past year, with play-to-earn and NFT-featuring games big focal points in the industry. There has been no shortage of funding either, with Konvoy’s latest fund following a $32 million investment made by Animoca Brands, Samsung Next and WeMade into Planetarium Labs.

A recent report from DappRadar also outlined continued interest in GameFi projects. The likes of A16z and Dapper Labs have pledged around $1.3B in investments in GameFi and metaverse projects and technologies.