Blockchain Gaming Awards Ceremony 2022
Blockchain Gaming Awards Ceremony 2022
Description: Being the most speculative assets you can hold, GameFi tokens and NFTs lost almost all their value in 2022. But beyond the token prices, new things were a-brewing in blockchain gaming which will emerge in 2023.
This annual report looks at cross-chain data from the blockchain industry to outline the most important metrics and trends from 2022 in GameFi.
By looking at last year through the lens of on-chain analytics, we can map the trajectory of the GameFi industry and make more intelligent investment decisions and analyses in 2023.
By the numbers, 2022 was a catastrophic year. After hitting euphotic highs, investors, GameFi participants, and NFT holders saw the value of their holdings drop precipitously. Those who were more unlucky lost all their assets as they got caught up in the collapses of Terra, BlockFi, Celcius, FTX, or one of the other smaller projects which failed or got hacked.
Nevertheless, well-known game studios continued to invest heavily in GameFi. Analysts still foresee that blockchain games—when they become more playable—will be one of the primary vehicles driving mainstream crypto adoption.
But until then, most GameFi projects still fail. That means those involved in the blockchain industry must look beyond headlines and whitepapers to determine what’s happening within a protocol, and to determine its sustainability.
Where does on-chain analysis come in?
For players and retail investors: Games still struggle to break out of the death spiral cycle, and GameFi investing still resembles Ponzi schemes, where the objective is to get in early, then get out before the project goes down. If playing a game mainly for enjoyment, one must be extremely wary of on-chain signals which indicate a decline is incoming.
For developers: Developers must closely track cross-chain trends as their choice of launch or expansion platform can significantly impact a project’s success. Considerations include ecosystem support, user base, and performance. Our assessment of GameFi projects considers these factors.
Finally, if you’re a VC or media outlet researcher, your job depends on generating accurate insights about the GameFi industry. This report looks at the underlying data.
It will answer three questions:
Financing & Investment
The overall market was grim in 2022. Judging by the price of GameFi tokens or NFTs, it looked like the entire industry bled out and, when it couldn’t get worse, taken behind the shed and put out of its misery.
But looking beyond the most superficial numbers, there were several highly optimistic signals in the industry, despite the loss of value. Whereas all of the development pre-2022 occurred on Ethereum, other ecosystems have attracted developers, creating more innovation.
From $27B at the beginning of the year to $3.3B by the end, the market cap occurred as the price of all crypto altcoins collapsed amid tightening macroeconomic conditions. Perhaps as an optimistic indicator for the future, they were also some of the most highly inflated assets during the 2021 bubble, indicating that investors see blockchain games as a high-risk but incredibly high-growth opportunity.
The drop in monthly volume was perhaps the most jarring statistic from the last year. This decline saw the volume go from $3.1B in January to $80M in December. However, it is crucial to note that this does not reflect the overall activity. As the price of GameFi tokens dropped, so too did the amount of volume, which is calculated at the amount of value in USD being exchanged within protocols
While the number of transactions had its ups and downs, it was relatively constant, unlike the sharp decrease tracked by the metric of overall volume. This means that, even as returns declined, GameFi still retained most of its activity. (Or, possibly, its bots.)
With its ease of development and cheap network fees, BNB attracted many light games and smaller projects. Few of these titles became hits, and BNB has yet to rope in a game of the magnitude of The Sandbox, Illuvium, or Axie Infinity.
Number of GameFi Protocols by Chain
Polgyon doubled its number of GameFi protocols from 153 to 306. Wax grew by 158% from 53 to 137 games. Solana had just 2 games in 2021, but broke out in 2022 with 19 new titles
$5.4B of investment was disbursed to the GameFi sector compared to $2.9B in 2021. In 2021, institutional investors were still thrown off by the novelty of so-called “blockchain games,” as Axie Infinity, The Sandbox, and Decentraland hit the headlines for the first time. 2022 was the year when people realized that GameFi could become a genuinely disruptive force if vast piles of VC cash were used to empower traditional gaming studios and established blockchain companies to build ambitious projects.
Some of the most notable examples are Sony, Epic Games, Ubisoft and Nintendo.
Epic Games, the studio behind Fortnite, raised $2B led by Sony to build out a metaverse. Details are still vague as of the beginning of 2023. However, the plan includes LEGO. This was by far the most significant fundraising milestone of the year.
The studio and investor solidified its position as the most active leader in GameFi, having closed 61 rounds, more than twice as many as the next most active investor. It was also the second-highest recipient of funding after Epic Games, with $434M
Animoca is the company behind The Sandbox, Benji Bananas, Arc8, and Phantom Galaxies.
Throughout 2022, Splinterlands (Wax’s main title) and Alien Worlds (Hive’s) were neck-and-neck for the number of active users. Depending on your outlook, this can either indicate the strength of Alien Worlds and Splinterlands, or the prevalence of bots in these games.
Polygon is an EVM L2 built to scale up Ethereum. Even though the project goes back to 2017 and its token, MATIC, went live in 2019, the network had its breakout year in 2022, showing strong performance in DeFi, NFTs, and GameFi. The games with the most average monthly DAU in 2022 on Polygon were Planet IX (70K) and Benji Bananas (25K).
STEPN was the last breakout success of the bull market and was one of the only innovative titles to reach headlines, introducing a mobile-app-based “Move-to-Earn” gameplay. However, after a month of its NFT asset sneakers and tokens inflating to the sky, the game entered the death spiral, and prices collapsed. The game is still the second most played on Solana.
Aside from STEPN, the “Walk-to-Earn” title Walken is also built on Solana.
This reflects a loss of confidence in its game, Decentraland. Decentraland was one of the original big 3 GameFi and metaverse titles that gained widespread recognition for its in-game assets’ exorbitant price, besides The Sandbox and Axie Infinity.
They were the most actively-played games in 2022. As we previously mentioned, both Splinterlands and Alien Worlds are card and text-based games with no 3D world—making them surprisingly primitive for market leaders.
As of the beginning of 2023, Illuvium’s Beta has already been launched and a full version is expected to launch to the public midway into 2023.
Asia Blockchain Gaming Alliance( ABGA )——A non-profit, blockchain alliance, co-sponsored by leading institutions in the gaming industry. We are optimistic about blockchain games, NFTs and Metaverse and we are taking the initiative to support ABGA related activities and investments.
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