Amidst the failure of FTX, blockchain games raised over $320 million in November

Despite the FTX collapse, Web3 games continue to be a driving force for the dapp industry. In October and November, gaming activity accounted for almost half of all blockchain activity tracked by DappRadar across 50 networks, with 800,875 daily Unique Active Wallets (UAW) interacting with games’ smart contracts in November.

Alien Worlds and Splinterlands remain the two most played Web3 games, with over 225,000 and 151,000 daily UAW registered in September. Trickshot Blitz’s monthly activity rose 70% in October reaching 23,086 daily UAW. The Season 7 Challenge, hosted by Solitaire Blitz and Trickshot Blitz, drove the increase.

Similarly, PlayMining increased their activity by 33% reaching on average 22,466 dUAW in November. The increase was driven by the announcement of the new Web3 game Graffiti Racer.

The impact of blockchain games is also visible in the NFT market, where in-game NFTs had a total trading volume of $55 million in the past two months. Gods Unchained remains the top game by trading volume, generating 60% of the total trading volume for game assets.

In 2022, STEPN had over 2.23 million users and over 700,000 shoes minted. The popular dapp was part of the FTX portfolio, but the company’s founders say they have “no exposure to the FTX situation” and will continue to build ecosystem products. The FTX collapse has caused a 33% drop in GMT and GST prices.

Finally, even though the investments in blockchain-based games and Metaverse projects declined in the past months, $534 million was raised in October and November. It is also worth noting that many projects focused on building Web3 gaming infrastructure. Examples of these are Horizon Blockchain Games and Fenix Games, which have both raised a total of $190 million.

Key Takeaways

In November, despite the FTX collapse, blockchain gaming activity had an average of 800,875 daily unique active wallets.
Wax keeps being the most dominant gaming protocol with over 340,000 average daily unique active wallets.
Solana takes the biggest hit on its activity due to its proximity with FTX, and in November it decreased by 89.42% reaching an average of 2,326 daily unique active wallets; Star Atlas, Aurory, and TapFantasy have been the most affected.
Blockchain games and metaverse projects raised $534 million; Fenix Games, a Web3 game publisher, announced $150 million in funding to acquire, invest, and distribute blockchain games.
The total NFT-in-game trading volume in October and November has been $55 million; Gods Unchained leads the blockchain gaming space. The card game’s trading volume accounts for 64.25% of the market, reaching $21.6 and $13.45 million in the two months.
The team of Walken, an M2E dapp, reported two million accumulated registered accounts. Despite the harsh crypto conditions, this metric has grown over 100% since August 2022.

Blockchain Gaming Industry Overview

Disclaimer: DappRadar keeps track of the number of Unique Active Wallets (UAW) interacting with a decentralized application’s smart contracts over time. This is also known as “on-chain” or “blockchain” activity. However, multiple dapps do not require executing a blockchain transaction to perform certain actions.

The activity outside a blockchain ecosystem is called “off-chain” or “Web 2.0” activity. Off-chain activity is traditionally measured by the number of Daily Active Users (DAUs). An example of off-chain activity is a user visiting the virtual worlds of The Sandbox or Decentraland, or a user who plays Axie Infinity without claiming rewards on the blockchain.

In October, the blockchain gaming industry had around the same number of daily unique active wallets as it did in September (911,720). This made up 45.71% of all blockchain activity.

In November, despite the FTX collapse, blockchain gaming activity was resilient, and the average daily unique active wallets (dUAW) decreased only by 12%, reaching 800,875. It is still the most significant part of the industry, making up 42.67% of all blockchain activity. The decrease in dominance is driven by the increase of the DeFi sector amid the FTX meltdown.

Looking at the Unique Active Wallets (UAW) of the top six gaming protocols, WAX is still the dominant blockchain and the only one that kept increasing its activity in the past three months. In October, it reached an average of 329,529 daily unique active wallets, translating into an 8.85% increase from September. In November, the gaming dapp increased its dUAW by 4.48% to 344,284 wallets.

Hive, the second gaming protocol, increased by 4.94% in October, with an average of 169,655 dUAW. But, in November, it decreased by 7.83%, reaching 156,369 dUAW, the same activity registered in July. As always, it’s the trading card game Splinterlands that’s responsible for most of the activity on the Hive blockchain.

In October BNB Chain surpassed Hive to become the second-most popular gaming protocol, with a 3.95% increase (average 171,269 dUAW). However, in November BNB Chain took a huge hit, and the protocol activity decreased by 35.08% (average 111,188 dUAW). Especially Tiny World and MOBOX: NFT Farmer, their user base decreased by 12.39% and 21.37%.

Polygon has been on a downward trend since September, and the number of unique active wallets keeps decreasing. While Polygon prides itself in branded partnerships and lots of business development, on-chain activity for the ecosystem’s gaming dapps continues to drop. In October, the number of UAW decreased by 4.33% (on average, 82,002 dUAW), and in November, it decreased by 8.8% (on average, 74,786 dUAW).

Even the success of The Sandbox’s Alpha Season 3 couldn’t boost the blockchain’s numbers. Similarly, EOS, which is mainly driven by the real-estate game Upland, is on a downward trend, dropping 13% and 16.57% in October and November, respectively.

Solana experienced the biggest decline in the past two months. In October, its activity decreased by 44.69%, reaching on average 21,979 daily unique active wallets. In November, due to the FTX collapse, the blockchain had a sharp decline of 89.42% (on average, 2,326 dUAW). This is the lowest number we’ve ever registered for dUAW.

Top Web3 games continue to grow in October

In October, Alien Worlds was the most played blockchain game with 212,350 average daily UAW, an increase of 25% from the previous month. On October 20, they announced the launch of brand new in-game DAOs as part of their new Planetary Syndicates model. By building on WAX, Alien Worlds was given the means to create a delegated democracy of DAOs easily.

Following Alien Worlds, Splinterlands has 169,445 on average dUAW, an increase of 5% since last month. On October 5, the company announced a major series of digital cards; they’ve sold over 10 million packs of their Chaos Legion series during the past months.

Splinterlands cards being unpacked – Source: splintertalk

Chaos Legion, a card pack series that first went on general sale on January 17, 2022, is the game’s third major card expansion since its inception in 2018. With only 15,000,000 packs produced, this new milestone marks the end of the home stretch for card availability, with continuous sales throughout the year and among other Splinterlands NFT sales. Chaos Legion’s success is the latest in a long line of triumphs for the fantasy-themed digital card battling game.

Upland, the AR mobile estate game, continues to be on a downward trend in activity, and in October it reached 31,595 dUAW. They also announced a new partnership with Gala Games, where Vox will be Upland’s first partner in the platform’s Ethereum interoperability portal. Upland wants to build an open and interoperable game economy.

The collaboration will set the foundations for the two companies’ visions of an open metaverse that encourages asset interoperability. Allowing users to store, sell and transport their assets across platforms and chains.

The mobile game Trickshot Blitz had an astonishing increase of 70% in activity month over month. The casual game on the Flow blockchain reached 23,086 dUAW. The increase was driven by the launch of the Season 7 Challenge, hosted by Solitaire Blitz and Trickshot Blitz. The season lasted seven days, running from October 8 until the 15. Users could have earned up to 60 RLY for outplaying others. There was also a meme contest and a referral program with rewards of 2,500 tokens.

Axie Infinity continues along its downward trend: this October they had an average of 19,434 dUAW, a 21% decrease from September. Nonetheless, they announced the release of Axie Infinity: Raylights, their first third-party product utilizing existing Axie NFTs in a new way. In this case, the new game requires a land NFT and some Axies, highlighting how other game developers can use the Axie ecosystem and Ronin blockchain to build their games.

In Axie Infinity: Raylights, players sow minerals in the ground, up to three layers deep, in order to grow plants. The game includes ten different types of minerals, but players only have access to the first three when they start. Others are unlocked as the player progresses and makes new discoveries. After sowing minerals, players assign an Axie to work on growing the plant. Once the grow timer completes, the plant will be added to the inventory, where it can be placed onto the land plot.

Finally, Era7: Game of Truth and X World Games have consolidated their base player around 24,000 daily average unique active wallets, 14% and 13% increases from last month, respectively.

FTX fallout has minimal effects on the top blockchain games

In November, Alien Worlds was the most played blockchain game with 225,360 average daily UAW, an increase of 6% from the previous month. On November 22 it was announced that the weapons and characters NFTs from Alien Worlds could be sent into the Battledome.

Now, it is essential to note that this is not the Thunderdome that Alien Worlds has promised for the past two years. Instead, this is a third-party app, developed by a group called Restack AI. Partially funded by a Galactic Hubs Pioneer Grant from Alien Worlds, Battledome matches allow up to 20 players to battle it out with their Alien Worlds NFTs. It’s quite passive gameplay, in line with the rest of the Alien Worlds game experience.

Splinterlands, on the other hand, had a decrease of 10% in its activity and reached an average of 151,517 dUAW. On November 11, the team announced plans to add additional use cases for their Runi NFTs, as the sales have been slow.

Runis, unique, generative, PFP-style NFTs, will become cards in Splinterlands. Splinterlands wants to add a staking contract to the Ethereum blockchain, allowing users to stake their Runi to use them in-game. Each Runi has a unique in-game card and owners can also utilize their Runi’s artwork commercially.

Furthermore, on November 17 Splinterlands reportedly laid off nearly 45% of its employees owing to the ongoing deterioration of the crypto market and worldwide recession. Splinterlands made it clear that they did not have any money in FTX or any other at-risk exchanges or services, nor did they have any debt or employ leverage in any manner. The company has cash and crypto to fund future and on-going development.

PlayMining increased their activity by 33% reaching on average 22,466 dUAW in November. The announcement of the game Graffiti Racer caused an increase in activity in the PlayMining ecosystem. Graffiti Racer joins a catalog of four play-to-earn (P2E) PlayMining games, which allow players to earn DEAPcoin (DEP) tokens. Users can spend these tokens on game items on the PlayMining NFT marketplace.

In Graffiti Racer, players color in ‘NFT Sheet’ characters with racing skill attributes for stamina, speed, and handling. Once colored, the characters can race in tours and competitions. High scores earn players DEP rewards, which they can use to purchase additional NFT sheets. The NFTs are also collectible, with rarer ones having more powerful skills, and the characters can also level up through play.

Benji Bananas has consolidated their base player around 33,000 dUAW, a 1% decrease from last month. This month we did an AMA with them; therefore if you want to know about the game’s future, go and check it.

Is this the bottom of virtual worlds?

Virtual world projects have been on a descending trend since July. In October and November, the category’s trading volume decreased by 30% MoM to $9 million in November. It is the lowest number registered since June 2021.

The number of sales climbed by 9.7% (20,843) month-to-month in October, showing that the demand for this type of project was still considerable. However, in November, the sales count had a sharp decline of 47.61% (10,919), the lowest number registered since July 2021.

Otherdeed for Otherside, in October and November, had a decrease on average of 35% each month reaching $5,460,223 in November. It represents 60.13% of the total trading volume of virtual worlds. Looking at the sales count, Otherdeed for Otherside had an increase of 9.28% in October, in comparison to September, but then it decreased by 15.52% in November.

Similarly, NFT Worlds V2 had a decrease on average of 31.5% each month, reaching $129,628 in trading volume in November. WorldWideWebb is on the same descending trend, and on average, these two months decreased by 38.5% reaching $76,229 in November.

The Sandbox finished its Alpha Season 3 on November 2 and was one of the most hyped events with over 353,000 unique users across 98 new brand-generated experiences. In October, the trading volume fell by 32.43% reaching $1,568,409 but the sales count increased by 12.71% reaching 14,917. In November, the trading volume kept decreasing by 33% reaching $1 million. Nonetheless, on November 22 they just announced a new land sale.

The upcoming sale will auction 1,967 LANDs—50 estates, 695 regular LANDs, 134 premium LANDs, and 19 1-of-1 pieces of LAND—with standard and premium LAND sales allocated via a blind ballot system.

The sale began November 24 with an inaugural wave titled California Dreamin’ representing “California-themed brands such as Playboy and The Marathon”. There will be two more themed launches running through to early 2023.

On the other hand, Decentraland had an increase in the trading volume of 31.34% in October, surpassing $1.2 million once again, and an increase in the sales count of 43.02%. But, in November, it decreased by 53.98% in the trading volume and 23.44% in the sales count.

Overall, it looks like in the past months the demand and hype for virtual worlds projects have been on a descending trend. Certainly, the FTX situation didn’t help, and a decrease in the trading volume and sales count were seen. Despite this, as seen in the section below, the metaverse world projects raised more than $2 billion this year.

Move-to-earn continues on the path of adoption

One trend that has been gaining traction in the cryptocurrency sector right now is move-to-earn, a relatively new niche with a range of products and services that reward you for your activeness. Move-to-earn applications provide an innovative way to make money while improving your physical activity.

STEPN remains one of the most popular M2E (move-to-earn) dapps, with over 2.23 million accumulated monthly users in 2022 and over 700,000 shoes minted. The popular dapp was part of the FTX portfolio, but the company’s founders claim “no exposure to FTX situation” and has reassured the community that treasury funds are secure and they remain focused on building new products for the ecosystem.

Users are rewarded for exercising with Green Satoshi Tokens (GST), which can be sold on a compatible DEX/CEX or used to mint, repair, and level up sneakers in the STEPN app. Additionally, STEPN is coupled with a second token, the Green Metaverse Token (GMT), utilized to manage the platform.

The GMT and GST prices have been affected by the FTX collapse, both dropping by 33% since it happened.

Although STEPN is far and away the market leader in the move-to-earn space, several other dapps have gained significant traction, too, including:

Step App (FITFI)

As the newest move-to-earn platform, Step App was greatly inspired by STEPN and its functions, and similarly, users must stake upgradeable sneaker NFTs called SNEAKs to start earning rewards. On December 1, Step App is launching its self-titled application during an event in Tokyo.

The Jamaican sprinter Usain Bolt will be both a key speaker and DJ at the event, which is sponsored by the Bybit cryptocurrency exchange.

Apart from its primary move-to-earn feature, the Step App allows users to make microtransactions. They can use credit cards or cryptocurrency to buy a range of things from the in-app store, including character skins, sneak skins, and map styles. The app also has the staked play function where users enter tournaments with their friends or other gamers by using their tokens.

With more than 90,000 registered users and established partnerships with top-tier athletes, Step App seeks to bring FitFi to a ready-and-waiting audience.

Genopets (GENE)

Genopets encourages users to take better care of their minds and body by immersing them in a gamified experience where they nurture, combat, and grow digital animals called Genopets. These Genopets may be purchased, sold, and traded, and more powerful pets generate more money.

Genopets, like many other move-to-earn apps, has two tokens. The first token, GENE, serves as the game’s governance token and is used to steer the game’s development and underlying processes. The second token, KI, is the in-game cash that players get as a reward and can be used to refine crystals and buy habitats for their Genopets to boost their stats.

Genopets has not been directly impacted by the issues surrounding FTX. However, the native GENE token was available on FTX and therefore has seen a drop in price of 58% in the past two weeks.

On November 17, Genopets launched their Legendary Lab, allowing players to craft the first Pet Augments ever. Those with the missing pages NFTs and the required number of tokens can attempt a creation at the lab, receiving one of several, random items. The pages are NFTs and they can all be purchased on Magic Eden.

Walken (WLKN)

Walken combines two hot concepts in today’s crypto and GameFi spaces, Play2Earn and Exercise2Earn (also referred to as Move2Earn or Walk2Earn). By exercising, players earn in-app tokens (GEM), which they can use to upgrade in-game avatars that battle to earn WLKN, the project’s native token. Walken is built on the Solana blockchain and developed by the team that developed Appyfurious and Getfit Apps.

Despite the FTX situation, according to the statement shared by the team, its number of registered accounts surpassed two million. This metric has added over 100% since August 2022 despite accelerating the bearish recession on crypto markets. Additionally, according to dune analytics, 80,808 CAThlete were minted since the game was launched.

A big part of Walken’s value to the user is its integration with DeFi platforms, encouraging users, especially new crypto holders, to use and benefit from DeFi services. Furthermore, Walken is looking to bring in developers and third party game studios into its ecosystem to facilitate crypto adoption and improve the value of the WLKN token.

Being built on Solana, the FTX crisis affected the WLKN token in the first few days. In fact, the price decreased by 42% in the first two days, but started recovering afterwards. Today, the price is $ 0.045, a 10% decrease from the beginning of the month.

$534 million was raised by blockchain games and metaverse projects

All through the year, partnerships and investments in blockchain gaming kept coming, and in October and November, another $534 million was raised. We are observing an ascending trend for the investments in blockchain gaming. September was the lowest month for blockchain gaming investments and the value flowing in startups and promising projects kept increasing from there.

Two noticeable investments happened in the past two months. On October 4, Horizon Blockchain Games, a startup focused on Web3 game development, announced the raise of $40 million in a Series A funding round that involved large traditional video game companies such as Ubisoft and Take-Two Interactive.

According to Horizon, they will use the funding to grow the company’s ecosystem by hiring more staff to develop better products that are user-friendly and Web3 native.

On November 27, Web3 games publisher Fenix Games announced $150 million in funding to acquire, invest, and distribute blockchain games. They will use the funds to establish a game publishing company to bring blockchain games to a mainstream audience.

In the most recent round of funding for Fenix Games, investors like Phoenix Group and Dubai-based Cypher Capital took part. Chris Ko, CEO, and co-founder of Fenix Games, who previously led Mythical Games, considers Fenix Games “like a VC fund” to fuel the next generation of blockchain games.

Looking at the whole picture, we observed that in 2022 so far 33.5% of the investments go to infrastructure, 19.4% to guilds or incubators, 26.9% to games and metaverse projects, 14% to investment firms, and 5.6% to NFT-in-gaming projects.

The infrastructure and games/metaverse projects are the most significant funding receivers. Animoca Brands and Pantera Capital have been the most noticeable investors this year.

Expectations around the total amount of investments for this year into this growing industry have been down by 11.7% to $8.16 billion, in comparison to the last quarter’s projection.

The amount of investments in 2022 shows that even though the digital asset markets are challenging and uncertain, big investors are still optimistic about the blockchain gaming industry.

Adoption from web2 to web3 continues

Since the very first Atari game, gamers have poured thousands upon thousands of hours into countless games – but after unlocking an achievement or beating a game, they were left with little to no tangible outputs. But Web3, and blockchain technology, change that entire dynamic, presenting a significant departure from Web2-based gaming in one critical aspect: ownership.

Blockchain technology provides a means to own in-game assets in a previously impossible way. Immutable, distributed ledgers provide the means to connote both uniqueness and digital ownership, giving gamers an entirely new way to lay claim to the items they earn through playing – a sense of ownership that the community has been seeking out for years.

For this reason, multiple Web2 gaming companies are starting to adopt Web3. In October, Double Jump Tokyo secured a deal with Sega to bring the latter’s popular Sangokushi Taisen game series to the blockchain.

The real-time strategy game Sangokushi Taisen is mostly a cult favorite in Japanese arcades and as collectible cards which can then be placed in a playing area for them to appear in-game.

While the game is still in development, blockchain applications remain up for speculation. But it would make sense for the collectible cards to be backed by blockchain as NFTs to ensure utility within the game while providing a means of ownership and fundraising for the game.

Though, to say Sega has had no brushes with blockchain before this would be presumptuous. In January, the company filed a trademark for its ‘Sega NFT’. This trademark occurred shortly after CEO Haruki Satomi showed a broader cooling off toward NFTs.

Furthermore, in November, a patent published by Sony suggested that the company could explore the use of in-game assets using blockchain and NFTs.

The patent which is entitled “tracking unique in-game digital assets using tokens on a distributed ledger” features a diagram on tracking changes in ownership of digital assets. The patent description notes that “individuals often find it meaningful to own or use unique physical items related to respected celebrities or activities.”

The technology Sony is looking at would make it possible to track the history of any in-game digital asset, such as wearables or skins as they are traded from player to player, essentially working in the same way as NFTs without mentioning them by name.

Conclusion

Despite the failure of FTX, blockchain technology remains robust and is the foundation of other innovative projects altering our financial system and gaming economy. The technology didn’t flinch, provided services, and allowed every user to send and receive assets.

Those entering the crypto space through the gaming or NFT channels may be uninterested in the collapse of Alameda and the centralized exchange FTX.

What’s the point? Unless their tokens were held in FTX, which is unlikely given that most blockchain games have internal marketplaces and staking options for their players, which means that tokens must be kept in a blockchain wallet. Without even realizing it, gamers may have learned the harshest Web3 lesson: not your keys, not your crypto.

The events at FTX have affected everyone in Web3 in some way. People’s trust in the industry will have been shaken, and they will be wondering what these events could lead to.

We are currently at an embryonic stage with tremendous potential for expansion. While there are several improvement opportunities, the industry is continually evolving and innovating.

Blockchain gaming’s future is bright, and it is on track to become the frontrunner for Web3.