DappRadar x BGA
While the 2023 bear market caused the unfortunate demise of various prominent Web3 games, others have shown how resilient the industry can be. 2023 saw the rise of new key players, both in the product and in the infrastructure side of the Web3 gaming industry. As we close the chapter of 2023, our retrospective reveals a silver lining the bodes well for the future of a participatory ecosystem with assets are owned by communities and players alike.
Significant strides were made in adoption, with major traditional gaming studios like Ubisoft entering the fray. Furthermore, the acceptance of Web3 games on mainstream platforms such as Epic Games Store, Google Play Store and the iOS AppStore indicates a broader embrace of this technology. This report delves into the intricacies of the past year, presenting a detailed analysis of the metrics and trends we’ve meticulously tracked at DappRadar.
- Blockchain games reigned supreme, accounting for 34% of dapp activities and attracting 1.1 million active users every day.
- WAX established itself as the top gaming blockchain, drawing in over 3 million new wallets and processing 4.7 billion gaming transactions.
- Klaytn and Near were standout formers, as they chains have witnessed a phenomenal increase in unique gaming wallets, growing by 72,857% and 21,132%.
- Alien Worlds dominates the gaming landscape, attracting a total of 2.25 million new unique wallets this year.
- In the in-game NFT market, Gods Unchained has set a new high, achieving $209 million in trading volume and 4.71 million sales, the most among all gaming NFT collections.
- Ethereum continues to lead with $347 million in in-game NFT trades, despite an 80% drop from last year. Meanwhile, Immutable X impressively doubled its trading volume, showing robust growth.
- While experiencing a 21% decrease in trading volume at $1.17 billion, land sales surged to 2.77 million. That’s a 1,166% increase, which indicates a significant drop in land prices.
- Leading the virtual world space, Otherdeed for Otherside achieved $365 million in land trades, comprising 30% of the total virtual world dapp trading volume.
- The year saw $2.9 billion invested across 163 deals in Web3 gaming and metaverse projects, reflecting a 62% drop and a 19% decrease in the numbers of deals when compared to previous years.
Table of Contents
- Blockchain gaming overview
- Yearly gaming leaders
- Land trading: $1.17 billion volume with a 21% decline
- $2.9 billion poured into Web3 gaming & metaverse
- Closing words
1. Blockchain gaming overview
In 2023, blockchain gaming solidified its position as the most influential sector in the decentralized application (dapp) industry. This year, not only did it attract the highest number of unique active wallets (UAW), but it also maintained an impressive average dominance of 34% across the entire industry.
The sector’s popularity became particularly evident in the fourth quarter, with the average daily UAW count reaching 1.1 million. This significant number underscores the increasing enthusiasm and engagement in the blockchain gaming community.
Delving deeper into the performance of gaming blockchains, we observed notable trends in UAW. WAX consistently held the top spot, a position it has maintained over the years. Polygon, shifting its focus from DeFi to gaming, climbed to third place, bolstered by strategic partnerships such as those with Immutable X for promoting Web3 game adoption, collaboration with Metacade, and the Neowiz $10 million grant program for Web3 games.
Near and Klaytn emerged as the top gainers this year, largely due to their successful foray into gaming dapps. Notably, Near saw tremendous success with Sweat Economy and Klaytn with SuperWalk, both part of the burgeoning move-to-earn category.
Flow also made significant strides, especially with the launch of three Joyride Games, which increased its popularity. Their strategy was unique, focusing on classic games like solitaire, trickshot pool, and carrom, thereby broadening their audience reach and appealing to a nostalgia factor.
When analyzing transaction counts on these top blockchains, interesting insights emerged.
We calculated the average number of transactions per unique active wallet and found DeFi Kingdom leading, followed by Solana. This suggests several possibilities, such as the complete on-chain nature of dapps or potential botting activities.
As for UAW growth in 2023, several chains stood out.
This list includes chains that not only excelled in gaming but also in launching innovative dapps and ecosystems, like TreasureDAO on Arbitrum, which proposed an intriguing DAO model for gaming studios.
However, the year was not without its challenges.
Finally, we observed new blockchain gaming platforms that emerged in 2023 and quickly climbed our rankings, thanks to their robust gaming-friendly architecture.
These platforms have sparked considerable interest in the Web3 gaming industry and hold promise for the future of blockchain gaming. As we’ve often said, creating a great game takes years, and we’re excited to see how these new entrants will evolve and shape the landscape.
2. Yearly gaming leaders
This year marked a significant phase in the gaming industry. Leading the charge in blockchain gaming, as evidenced by the increase in unique active wallets (UAW), were the following standout games:
2023 also witnessed the resurgence of the move-to-earn trend, with Sweat Economy making impressive strides in Asia and the United States.
Our analysis extended to identifying top games across various genres based on UAW, which highlighted both long-standing and new entrants in the market.
Notably, the integration of Web3 games on major platforms like Google Play Store, AppStore, and Epic Games Store signals a bullish trend for the industry, fostering adoption among Web2 users.
In another exciting development, DappRadar participated in the Gam3 Awards 2023, where a mix of jury and community members voted determined the year’s best games.
A game-changing aspect this year was the rise in popularity of in-game NFT items. Gods Unchained led the pack due to its massive success, while HYTOPIA with its TOPIA Worlds (formerly NFT Worlds) also featured in our top 10, demonstrating the importance of continuous innovation in gaming platforms.
An intriguing question emerged regarding the blockchain platforms facilitating this trade.
Ethereum, despite an 80% decline from the previous year, stayed at the forefront, followed by Ronin. Immutable X, however, showed remarkable growth, doubling its trading volume for in-game NFT assets, a testament to the team’s dedicated efforts and updates over the past year.
To conclude, 2023 was a landmark year for the gaming industry. With numerous betas and alphas released, we eagerly anticipate the final versions of these games in 2024.
3. Land trading: $1.17 billion volume with a 21% decline
In 2022, the virtual world and metaverse concepts were the center of attention, with significant enthusiasm surrounding launches like Otherdeed for Otherside. However, 2023 ushered in a prolonged bear market, impacting the virtual world dapp industry significantly.
We registered a 21% decline in overall trading volume, in comparison to 2022. Conversely, there was an astonishing 1,166% increase in land sales, which indicates a shift in market dynamics. This means that land within these virtual worlds has become more affordable, which therefore becomes attractive to investors seeking ownership at reduced prices.
Looking at the performance of the virtual world dapps, Otherdeed for Otherside remains the market leader, because they accounted for 30% of the total virtual world dapp trading volume. The year brought significant updates to Otherside, fueling user anticipation for the full Otherside metaverse experience.
The year also witnessed the remarkable growth of The Sandbox, a key competitor in the space. The Sandbox expanded its offerings, announcing numerous updates, launching new experiences, and forming strategic partnerships with celebrities and significant Web2 companies. A pivotal development was the expansion in 2024 of The Sandbox to mobile platforms, enhancing its accessibility and potentially enlarging its user base. Furthermore, they now allow anybody to build games, deploy them, and welcome players to enjoy.
Additionally, Mocaverse, a new player created by Animoca Brands, entered the scene and quickly garnered attention. Mocaverse launched with great fanfare and achieved significant success across social media platforms and in various performance metrics.
While the focus here is on a few notable platforms, it’s important to acknowledge the broader virtual world dapp landscape, which includes many other platforms that have shown impressive growth and innovation this year.
Contrary to the belief that the virtual world sector might have reached its lowest point, the current developments suggest a different narrative. With increasing land sales, continual enhancements across various platforms, and the introduction of new players, the industry is poised for exciting advancements.
4. $2.9 billion poured into Web3 gaming & metaverse
In 2023, the blockchain gaming and metaverse industries witnessed a dynamic investment landscape. Despite a notable decrease from the $7.6 billion invested in 2022, the sector continued to attract substantial funding, underscoring their ongoing relevance and moreover its incredible potential to attract a much bigger audience.
Investments in 2023 were predominantly allocated to the following sectors:
This distribution highlights a strong focus on the core aspects of blockchain gaming and metaverse development, particularly in gaming experiences and supporting infrastructure. Notably, this trend could be interpreted as a bullish sign for the industry as it suggests that companies concentrate their efforts on delivering top-tier games. This emphasis on quality over quantity could be a strategic move to elevate the standards and public perception of blockchain gaming, potentially leading to broader adoption and long-term success in the market.
The year-on-year growth for each sector experienced significant variances:
These figures indicate a substantial slowdown compared to the explosive growth seen in previous years. This decline reflects a more cautious investment approach, consistent with the overall economic landscape that we’ve witnessed in 2023.
Looking deeper in the investment landscape of 2023, Bitkraft Ventures came out as a clear leader with $221 million in industry funding. Furthermore, over six significant investments, each amounting to $100 million, were channeled primarily into infrastructure projects, many of which are centered in Asia—which has grown into a formidable hub for Web3 gaming.
It’s particularly interesting to note that among these top investments, only one is dedicated to game development. Metagame Industries raised $100 million for their ambitious project, Abyss World—a flagship AAA title within the Sui ecosystem.
Looking even deeper into the investments, this time at the investors themselves, a few names rise to prominence. At the forefront is Animoca Brands, which not only consistently invested in various Web3 gaming projects, but also raised over $60 million itself. With such active participation in funding rounds throughout the year, Animoca Brands has unequivocally established itself as the biggest name in the Web3 gaming landscape. Other notable investors that marked their presence include Pantera Capital, which made several strategic investments, as well as industry giants like a16z and Play Ventures. Each of these investors has contributed to the shaping of the current and future direction of Web3 gaming.
5. Closing words
In reflecting on the past year, we recognize blockchain gaming not just as a segment of the Web3 ecosystem, but as the cornerstone for mass adoption. Representing more than 34% of all on-chain activities and boasting 1.1 million daily unique active wallets, gaming has undeniably been the entry point for millions into the decentralized world.
The influx of investment into Web3 and metaverse initiatives underlines the industry’s potential, as seen through the eyes of the investor community. This year’s leap in adoption, marked by the involvement of traditional gaming giants like Ubisoft and the acceptance of Web3 games on leading platforms such as Google Play Store, AppStore, and Epic Games Store, highlights a merging of Web2 and Web3 worlds.
Despite the challenges faced in 2023, our journey towards 2024 is filled with hope. The initial outlook might appear daunting, yet the resilience inherent in the Web3 industry assures not just survival but thriving growth in the face of adversity