Overview of Blockchain Games: A Retrospective of 2023 and Outlook for 2024

Author: [email protected]
Source: Blockchain Game Annual Report
Table of Contents
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Key Points
2023 Game Data: Decreased trading volume, but trading frequency remains stable
Blockchain game market value
Active game wallet count
Monthly trading volume & trading frequency
2023 Market Review: Game industry is developing, but on-chain data is not optimistic
Game industry is developing, and AI is also profoundly changing this industry
2023 Annual Token Price Increase Ranking
2023 Investment and Financing Status
2024 Outlook: Top games emerging, more Web2 users entering blockchain games
This year, while the market value of Bitcoin (BTC) rebounded strongly from its previous year’s low, the growth of the blockchain game market was relatively flat but saw a significant increase at the end of the year.
In this year’s games, only 6% of the games had more than 1,000 active wallets, a decrease from 10% compared to the previous year.
In 2023, although the overall trading volume decreased from the peak in 2022, the trading frequency remained stable.
The blockchain game industry is developing, and AI is also profoundly changing this industry. Layer 2 blockchains are also developing rapidly, but old blockchains like BNB still dominate the market.
The market is anticipating the emergence of top blockchain games, and GambleFi may experience growth but still faces regulatory challenges.
In terms of user acquisition, using platforms like Telegram and X (Twitter) to reach a large user base has become a trend.
Blockchain games play an important role in popularizing Web3, simplifying complex concepts, and helping people understand blockchain technology. Unlike other fields, the concept of game currency and items that already exist in traditional games make blockchain games more understandable and acceptable to the general public as a Web3 adoption solution.
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Despite a significant 83.8% decrease in trading volume in the blockchain game market in 2023 (from $20 billion to $3.2 billion), game developers are still actively preparing for the expected bull market, focusing on improving the security, scalability, and transaction processing capabilities of games and their infrastructure. Additionally, developers are actively exploring strategies to attract more players through collaborations and learning from traditional game giants.
According to a16z’s prediction for 2024, blockchain games are transitioning from a pure play-to-earn model to a play-and-earn model that focuses more on game enjoyment. At the same time, artificial intelligence is not only enhancing productivity but also bringing new possibilities to blockchain games.
Given these significant advancements, we expect explosive growth in the blockchain game industry in the coming years. Our report provides a detailed analysis of the performance of the blockchain game market in 2023 and offers forward-looking insights into 2024 trends to provide important references for the market.
While Bitcoin’s market value rebounded strongly from the previous year’s low to reach $828.35 billion, a 159% increase, the growth of the blockchain game market was relatively flat but saw a significant increase at the end of the year.
Blockchain Game Market Value
Despite the increasing number of games in the market, user engagement has significantly declined. In 2023, the number of games in the market increased from 2,070 to 2,780, but only 6% of the games had more than 1,000 active wallets in this year’s games, a decrease from 10% compared to the previous year. This reflects the challenges blockchain games face in attracting users and the decrease in game quality compared to the previous year.
Major industry participants believe that the market downturn in 2023 is temporary, so they are taking time to optimize game infrastructure and wait for the arrival of the bull market.
In 2023, although the overall trading volume decreased from the peak in 2022, the trading frequency remained stable, highlighting the industry participants’ determination to improve on-chain infrastructure and enhance user experience. For example, SUI successfully addressed people’s concerns about blockchain processing capabilities through games like SUI 8192. In July 2023, the daily trading volume of the SUI chain reached an astonishing 20 million.
We can see that the blockchain game industry is strategically adjusting to seize opportunities when market sentiment improves.
The game industry is developing, and AI is also profoundly changing this industry
Play-to-earn is evolving into play-and-earn
Web2 game studios are increasingly embracing Web3 technology
The integration of AI and the blockchain game industry has taken a critical first step
Data from Footprint Analytics shows that although the number of active Web3 game players decreased in 2023, the industry as a whole is still moving towards mass adoption and improving user experience. The entire industry is gradually shifting from focusing solely on native crypto players to a broader mainstream market.
With the expectation of a bull market, the development of the game industry has not stopped. In 2023, the prices of four game tokens achieved growth of over 500%, with Nakamoto Games performing the best with an astonishing 1,931.55% increase.
Additionally, the token growth of platforms like HYTOPIA, Fabwelt, and Merit Circle also exceeded 500%. Even in a challenging market period, projects with strong ecosystems continue to perform well.
A significant trend in 2023 is that play-to-earn in blockchain games is evolving into play-and-earn. Many Web2 companies are starting to increase their focus and investment in blockchain games, injecting vitality into this emerging field with their capital and experience. HYTOPIA is a successful example, with its token growing by 1,086.75% this year. This game originated from Mojang Studios’ sandbox game Minecraft in the traditional game industry.
Furthermore, the well-known AAA game Illuvium has also partnered with multiple mainstream Web2 entertainment companies. Web2 studios have a strong interest in entering the blockchain field. Even traditional game giants like Ubisoft and Square Enix are exploring this new territory.
Looking ahead to 2024, the trend of AI integration into games will become more apparent. AI is not only significantly improving productivity, allowing small teams to efficiently create high-quality games, but also has the potential to quickly adjust game balance and mechanics based on player data and real-time feedback, better responding to player needs.
Although AI is still in its early stages of development and its full impact on the game industry is yet to be explored, its potential is promising.
While Layer 2 blockchains are developing rapidly, old blockchains like BNB still dominate the market
Layer 2 blockchains have attracted attention from the entire game industry
Old blockchains like BNB, Polygon, and Ethereum still account for 80% of active games in the market, dominating the current market.
Layer 2 blockchain development was significant in 2023, with multiple major projects emerging. In July, SUI demonstrated impressive performance, showcasing the powerful potential of Layer 2 blockchains in handling a large volume of transactions. Following that, in August, Base launched friend.tech, combining social and entertainment elements, quickly becoming a hotspot in the industry. In November, Ronin also attracted industry attention due to Axie Infinity’s outstanding performance and the launch of Pixels on the Ronin chain.
Layer 2 Overview
On December 31, 2023, Rollup technology saw rapid development, with Arbitrum and Optimism accounting for a total of 83% market share of the total value locked (TVL). Optimistic rollup, known for its user-friendliness, is particularly popular in the DeFi field. Game-oriented Layer 2 blockchains are still striving to find directions and gain a larger market share.
Active Games on Different Chains in 2023
Old blockchains like BNB, Polygon, and Ethereum still account for 80% of active games in the market in 2023, demonstrating the continued dominance of old blockchains in the market.
2023 Major Financing Events Ranking
Investment in the blockchain game industry slowed down rapidly in 2023 due to the FTX incident and regulatory impact. In 2023, the gaming sector completed a total of 131 financings with a total value of $983.9 million, a significant decrease compared to the previous year’s $2.6 billion. In the 2023 market environment, investors became more cautious than before.
Annual Financing Amount in the Game Industry
Among these investment events, a highlight came from the game giant Nexon, which is currently valued at $27 billion. Nexon invested $100 million to expand its Web3 intellectual property project, MapleStory Universe.
The market is anticipating the emergence of top blockchain games
With the increasing market expectation for high-quality games like AAA games, the blockchain game industry is poised for growth.
The development cycle of games usually exceeds two years. Therefore, after significant capital injections in 2022, it can be inferred that many games have made substantial progress in their development.
Web2 giants gradually entering Web3 will have a profound impact on the blockchain game industry as the bull market approaches. These game studios with expertise in traditional game development can inject their professional knowledge into Web3 and create better blockchain games. At the same time, the integration of blockchain technology is expected to improve the transparency of in-game assets and economic cycles, enhance game security, and bring more opportunities.
GambleFi may experience growth, but it still faces regulatory challenges
Against the backdrop of a presidential election year and the continuous development of the sports betting industry, platforms like Rollbit will achieve significant achievements. It has been reported that Rollbit’s revenue reached approximately $300 million in 2023. The platform uses on-chain burn to track revenue, which has attracted attention, but its accuracy still needs verification.
Despite facing regulatory challenges, GambleFi has become one of the highest-grossing applications in the crypto field, demonstrating the tremendous growth potential of blockchain-based gambling platforms.
Many people are developing games based on cryptographic technology on traditional social media platforms in an attempt to acquire users.
The blockchain industry has always been seeking to onboard more users. This year, using platforms like Telegram and X (Twitter) to reach a large user base has become a trend. The collaboration between Animoca Brands and The Open Network (TON) blockchain is an important case in this field. As the largest validator of TON, Animoca Brands will help Telegram users transition to Web3. This collaboration can not only reach more users but also bring practical value and utility to Web3 applications.
Blockchain games continue to develop, leveraging the advantages of existing large platforms and combining them with the innovative capabilities of blockchain technology, playing a key role in driving the adoption of blockchain technology and the future development of the industry.
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