Find out everything you need to know about blockchain games in February
The conflict in Ukraine has exacerbated a negative trend in the crypto market, which was already suffering from a three-month bearish trend. Following this sentiment, game dapps lost 13% of the daily usage registered in February. Last month, 1.1 million Unique Active Wallets (UAW) connected daily to a blockchain game on average, accounting for 49% of the usage in the wider blockchain industry.
However, although the attention shifted away from blockchain games in the short term, game trends and patterns signal that the outlook for this category is bullish. The amount of capital invested in game projects and infrastructure keeps flowing in. At the same time, the top play-to-earn and GameFi dapps across different blockchains have established a stable player base.
Key takeaways
- Blockchain games follow the industry’s downward trajectory; game dapps daily activity down 13% but still attracted over 1.1 million daily UAW on average in February.
- A new wave of virtual worlds spearheaded by NFT Worlds resist the negative trend; the floor price of this collection surged 250%, reaching more than 12 ETH, and amassing almost $50 million in monthly sales.
- Investments keep flowing into blockchain games and infrastructures; $720 million raised in February with Animoca Brands becoming a leading player.
- Splinterlands keeps consolidating as a premier play-to-earn dapp with more than 310,000 daily wallets connected on average; partnerships with renowned music names also stand out.
- Polygon established itself as the fourth blockchain in terms of game activity behind tower defense play-to-earn dapp Crazy Defense Heroes.
Table of Contents
- Bear market for metaverse and game tokens
- NFT Worlds defies the market trend
- Investments keep pouring – $722M raised in February
- Leading dapp Splinterlands gets a strong partner
- Axie Infinity surpasses $4B in trades amid economic changes
- Top games keep consolidating their audience
- Road ahead
Bear market for metaverse and game tokens
Blockchain games and metaverse projects could not escape the macro trend that dragged the crypto market down, despite a strong start of the month. The FOMO phase experienced after Meta’s rebranding back in November has been replaced by a fearful market that turned its attention to what people consider safer assets.
Tokens like SAND, MANA, GALA, among others, enjoyed massive gains reaching all-time highs in November; nevertheless, these cryptos have undergone visible drops in their prices. The price of SAND, for instance, has dropped 66% since its all-time high, but it is still 205% higher than its trading price on October 30.
The current market situation is just an example of the volatility experienced within the industry. It also serves as a reminder that projects in this space are built for the long term. While earnings in a short period can be more than rewarding, it is necessary to acknowledge that the dapp industry is in its early days, which is especially applicable to the games category.
NFT Worlds defies the market trend
Following the metaverse narrative, NFTs representing virtual lands have gained significant value since the Meta announcement last November. In February, select virtual world projects, which show true innovation and utility, continued to defy the bear market trend and appreciated in value.
NFT Worlds is one such project. This virtual world consists of 10,000 land NFTs that allow their owners to customize their parcels to offer gaming experiences. These tap into the existing ecosystem created by Minecraft, now owned by Microsoft. After some lands were accessible during the Beta and the airdrop of the project’s native currency WRLD, the demand for this project skyrocketed, raising prices in the process. In February, the floor price of these NFTs surged 250%, reaching more than 12 ETH, while the demand doubled from January, amassing almost $50 million in monthly sales, the highest volume for any other virtual world dapp, surpassing even The Sandbox. Note: at the time of writing, the floor price had consolidated above 8 ETH.
Other virtual worlds presenting unique features also increased their value and demand. The floor price of the interoperable virtual world Webbland gained 75% from 1.4 ETH to 2.5 ETH, generating almost $17 million in trading volume. Ethereum Towers, one of the few vertical virtual worlds, saw its demand rise 1,024% from January, generating nearly $1 million in trades.
In the same way, established metaverse projects like The Sandbox, Decentraland, and many more have provenly resisted the downward trends in capital and crypto markets. Overall, virtual world projects generated $129 million in sales, falling only 2.4% from January. As the metaverse narrative gains steam in the traditional sector, virtual world projects again highlight the space’s potential.
Investments keep pouring – $722M raised in February
The amount of capital investment in blockchain games is indicative of a positive overall trend for gaming. In February, investors supported blockchain game projects and infrastructure with at least $722.5 million. This comes after blockchain game-related projects raised almost $1 billion in January. If the investments keep coming at this rate, the $4 billion accumulated in 2021 will be surpassed.
In that regard, Animoca Brands has become one of the most critical players in the web3 industry. This Hong Kong-based, VC-type organization has not only reached a $5 billion valuation, but has become a strategic partner increasingly involved in developing blockchain-based projects. The AniCube joint venture with Cube entertainment, a Korean-based entertainment company looking to create an NFT marketplace around K-Pop culture, is an example.
It is also worth noting that Sequoia Capital led a $450 million investment in Polygon. The blockchain company has revamped its game offering and is currently home to the fifth most played game by daily on-chain activity Crazy Defense Heroes. Plus, the sidechain is the fourth largest network in terms of game activity only lagging Hive, Wax, and BNB Chain. Polygon is also home to The Sandbox, Pegaxy, Aavegotchi, Fear, Phantom Galaxies, REVV Racing, Zed Run, Doctor Who: Worlds Apart, and the upcoming Galaxy Fight Club, Riot Racers, among others.
Leading dapp Splinterlands gets a strong partner
Splinterlands retained its spot as the most played blockchain game based on daily on-chain activity in February. The trading card game successfully reached 7 million Chaos Legion packs sold and managed to attract over 500,000 UAW in February, dropping only 2% from January’s activity. On average, Splinterlands drew over 331,000 daily UAW in February.
Besides strong blockchain gaming activity, Splinterlands closed two critical partnerships to add to their roadmap. First was an NFT launch in collaboration with rapper Waka Flocka Flame. Not only will this series of NFTs introduce unique cards in the game’s strategy, but the NFTs will also serve as collectibles that can be worn in Snapchat through AR.
In addition, Splinterlands also partnered with Warner Music Group, a record label conglomerate that controls around 16% of the global music & copyright industry. The collaboration will not necessarily involve the trading card game per se, but might approach the game as an additional revenue stream for musicians and artists. The intersection between music and blockchain games is something to watch, as projects like The Sandbox and Gala Games are also exploring this model.
Axie Infinity surpasses $4B in trades amid economic changes
After the successful RON launch, Axie Infinity lost some ground in its blockchain activity. Changes to the earning model and its negative impact on the price of AXS and SLP have taken a toll on the game’s activity. Axie attracted over 160,000 UAW in February, down 35% from January. Still, Axie Infinity is the sixth most played game based on daily usage, with 36,000 UAW connecting daily to the game.
Even though Axie’s on-chain activity is down, with over 2.5 million Daily Active Users, the Sky Mavis dapp is the most played blockchain game, considering off-chain data. Sky Mavis is also preparing a series of updates that will greatly impact the Axie ecosystem.
The launch of Origin’s Beta is expected at the end of Q1 2022 and will involve changes to the game mechanics and economics, including smoother and more dynamic battle controls, change in the card strategy, and implementation of NFT-based power-ups, among others. In the same way, Axie is constantly looking to reward creators, as noted by the 1% royalty on the marketplace taking effect on March 7.
As the game prepares interesting updates, including Origin and the eventual release of its virtual land Lunacia, it is also important to acknowledge the impact of Axie NFTs – it is the first collection to surpass $4 billion in historical trading volume, excluding artificial trading (LooksRare).
Top games keep consolidating their audience
Although game activity regressed slightly from previous months, it is encouraging to observe how successful the top play-to-earn and GameFi dapps have been at retaining – and even expanding – their player’s base.
Splinterlands, Axie Infinity, Upland, and Wax’s Alien Worlds and Farmer Worlds have ranked among the top 10 most played games for at least six months. Despite a decrease in Alien Worlds’ daily activity, these play-to-earn and GameFi dapps can be seen as a measure for consistency, a critical indicator for games.
In addition, the next wave of game dapps is also showing sustained growth and consistent performance for the last few months. These include Harmony’s DeFi Kingdoms, BNB’s Mobox and Bomb Crypto, and at least a couple of Polygon games – Crazy Defense Heroes and Arc8, where Pegaxy appears to be consolidating as well.
All in all, we must acknowledge that the game category is under constant development and expansion. While the game trends might not be as solid as two months ago, seeing a good number of game dapps with a consolidated audience is a robust indicator.
Road ahead
The game category has experienced a downward trend following the overall sentiment in the industry. Blockchain metrics that measure activity and demand are slightly down from the start of the year, although signals from a macro perspective keep showing that the interest and potential of the space are significant.
Interest in blockchain games keeps rising, as proved by the $720 million invested in February. With this, investment in this category in 2022 amounts to almost half of the total capital raised throughout 2021. In the same way, virtual worlds are experiencing a consolidation phase after the Meta hype cycle, solidifying even further the status of this type of dapps. As the space prepares to keep building and developing, there are upcoming events that are worth keeping on the radar, including:
- Axie Infinity Origin: Axie is preparing important changes to its ecosystem including the expected release of the Origin season, bringing a more dynamic play-mode.
- Gala Games: The decentralized game network is undergoing a governance voting to include Superior, a third-person co-op shooter to its game catalog; a revamp in StarTown may also translate into a significant jump in the game’s blockchain activity.
- NFT Worlds and The Sandbox second Alpha: These updates offer further opportunities to get hands-on experience with some of the most popular metaverse-based game dapps.
Phantom Galaxies Alpha and Skyweaver open Beta: After compensating victims of a Discord hack, Phantom Galaxies released Episode 2 – the game’s second Alpha season; meanwhile, Horizon’s trading card game Skyweaver has opened its Beta phase to more than 300,000 players on the waiting list.
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