2020 was a significant year for many categories in the blockchain dapp sector, but when it came to blockchain gaming, the picture was more nuanced.
Key data points
- Daily activity across blockchain games grew 35% during 2020 to around 28,000 DAUWs
- Trading volume across blockchain games during 2020 rose 191%, totaling $54 million
- Daily activity across NFT marketplaces grew 226% to around 3,400 DAUWs
- Trading volume across NFT marketplaces rose 785%, totaling $78 million
- Ethereum was the key source of trading value; 61% of games and 92% of marketplaces
A year of building
Certainly, there was growth. But compared to the DeFi category, which was the catalyst for the entire crypto sector – ending the year with $15 billion of locked value – growth was patchy and driven more by the dynamics of individual products rather than experienced across the sector.
The average total daily active unique wallets across all blockchain games tracked by DappRadar during December was 27,765, up 35% compared to an average of 20,585 in January.
This was despite the general decline in activity for Ethereum games from May onwards when gas transaction fees became too expensive due to the DeFi boom. From January to December daily activity across all Ethereum games dropped 45%.
On a per-product basis, however, the situation was radically different.
- Axie Infinity (Ethereum) grew by 810%
- Upland (EOS) grew by 516%
- Splinterlands (Hive) grew by 53%
- Prospectors (EOS & WAX) declined by 31%
- Crypto Dynasty (EOS) declined by 48%
- My Crypto Heroes (Ethereum) declined by 97%
At various times during 2020, all these titles were within the top five most popular games, which demonstrates something of the volatility of their audience engagement.
During 2020, EOS was the most popular blockchain for gaming, accounting for 35% of all daily active unique wallets, compared to 17% for Hive, 14% for Ethereum, 10% for Thundercore, and 9% for WAX.
The top performers
Given the diverse audience variation experienced by many blockchain games during 2020, it’s worth looking in more detail at the three games which performed the best; notably how events and features influenced daily activity trends.
In the case of Splinterlands, the most popular blockchain game of 2020, the key event was its decision to switch from the Steem blockchain to its hard forked version Hive.
There was some audience volatility during the transition period in late May but by early June through August, Splinterlands entered a period of strong growth as new players were attracted and older players re-engaged by the publicity arising from the switch.
There was no single event that kickstarted the year-long growth of mobile game Upland.
Instead, its momentum accelerated as it started to roll out its marketing campaign, as well as adding features such as new locations and fiat cash-out options.
Growth for Axie Infinity was more directly linked to external forces, particularly the price of its SLP token, which jumped 499% in early July.
Interest in the game was further accelerated from September onwards as the top price paid for its rarest NFTs – Mystic Axies – rose from 150 ETH to 200 and then 300 ETH within two months. This itself was likely driven by the increasing interest in the game.
Of course, in these three cases, we need to be careful not to assume all such events are directly causal to user growth.
Although daily activity didn’t grow substantially during 2020, the situation appeared to be more positive when it came to total trading value.
For blockchain games, annual growth was 191%, rising from a daily average of around $59,500 in January to $173,500 in December.
However this is put into some context as the USD value of ETH – the main cryptocurrency for gaming – rose 470% during this period, meaning that on an ETH-basis, daily trading volumes declined.
This seemingly contrary behavior can be understood to some degree as cheaper game NFTs are psychologically priced in dollars by traders, who are concerned with short-term value.
Meanwhile more expensive NFTs that attract high-net-worth crypto investors are more often priced in ETH because they are considered longer-term assets, whose value is related to broader trends in cryptocurrency adoption.
Clearly, the interplay between these two trends is complex, both in terms of individual games and across the entire sector.
It’s also worth discussing what happened during 2020 in the marketplace dapp category.
Not entirely related to gaming – there was a strong rise in crypto art trading during the second half of 2020 for example – the trading of game assets remains the largest single driver of activity on marketplaces such as OpenSea.
During January, on average there were around 1,050 daily active unique wallets interacting with marketplaces. This rose 226% to an average of around 3,400 in December, with strong growth experienced from October onwards.
Value growth for marketplaces in dollar terms rose 785% – significantly more than ETH grew – from a daily average of $48,400 in January to around $437,000 in December.
This activity particularly accelerated during Q3 as profits from DeFi flowed into the sector.
Ethereum was the main driver of overall value growth during 2020.
Across all blockchains, games, and marketplaces accounted for $132 million of trading value.
- Ethereum-based marketplaces had a 54% share,
- Ethereum games 25%,
- Non-Ethereum games 16%, and
- Non-Ethereum marketplaces 4%.
This demonstrates Ethereum’s strength as the generator of financial wealth, which coupled with its strong NFT standard, ensured value flowed from token-oriented DeFi dapps into other asset classes.
Although EOS and Tron do now have their own NFT standards, they are not as mature or as well supported as Ethereum’s ERC721 and ERC1155 standards.
Only the WAX blockchain managed to successfully leverage the power of NFTs, generating around $6 million of trading, but this was almost all through collectible projects rather than games.
In conclusion, it is best to consider 2020 as a year in which the foundations of blockchain gaming were reinforced.
It is notable, in this regard, that at least $70 million was invested into blockchain game companies during 2020, including $11 million for Dapper Labs to launch and populate its new Flow blockchain (total raised $68 million) and $8 million for Sorare, a fantasy soccer game.
Meanwhile, The Sandbox and Axie Infinity raised $4 million respectively through the private and public sales of their games’ tokens, and The Sandbox and F1 Delta Time generated $2 million apiece through the direct sale of game NFTs to users.
Similarly, peer-to-peer trading boomed within Axie Infinity, which experienced multiple NFT sales of more than $100,000 as the value of its rarest Mystic Axies grew considerably.
More prosaically, many projects opened up their beta programs, including the likes of The Sandbox, Blankos Block Party, Skyweaver, Nine Chronicles, and Soccer Manager Elite, as they prepare for more formal launches in 2021.
And there has also been a general migration of Ethereum-based projects such as Neon District, MegaCryptoPolis, and Spells of Genesis, to use Matic Network, a layer two technology that offers much faster and cheap transactions.
In other words, the future is not yet here, but it is getting closer.