Author: [email protected]
Source: GameFi Research Page
In May 2024, Ethereum’s performance received a significant boost as the SEC approved the preliminary application for a spot Ethereum ETF. The total market value of blockchain gaming tokens reached $201 billion, representing a 6.7% increase from the previous month. Despite the growth in market value, the industry experienced an interesting shift in user engagement, with a decline in transaction volume but a record high in daily active users. Furthermore, the increasing popularity of mini-games and game bots is gradually reshaping the landscape of the gaming industry.
The data for this report is sourced from Footprint Analytics’ Blockchain Gaming Research Page. This is a user-friendly dashboard that includes the most important statistics and metrics for understanding the blockchain gaming industry, updated in real-time.
Macro Market Review
In May 2024, Bitcoin rebounded strongly from its low point at the end of April, rising from $60,653 at the beginning of the month to $67,606 at the end, representing an 11.5% increase. Meanwhile, Ethereum also showed a strong recovery, with its price increasing from $3,011 to $3,778 during the same period, a significant 25.5% rise.
Market dynamics in May were significantly influenced by major regulatory developments, as the U.S. Securities and Exchange Commission (SEC) approved the preliminary application for a spot Ethereum ETF. This milestone event not only helped Ethereum stand out in the broader cryptocurrency market but also signaled a shift in regulatory support for cryptocurrencies.
Additionally, political developments also impacted market sentiment. The Trump campaign team announced that they would accept cryptocurrency donations, hinting at the potential far-reaching effects the upcoming U.S. presidential election could have on the cryptocurrency market, potentially comparable to adjustments in Federal Reserve monetary policy.
Conversely, the ongoing resolution of the Mt. Gox exchange bankruptcy case exerted a certain degree of restraint on Bitcoin prices. The exchange, which had been in bankruptcy for a decade, announced in September last year that creditor repayments would begin in October 2024, raising concerns in the market about the potential impact of a large-scale token sell-off.
Blockchain Gaming Market Overview
In May, the market value of blockchain gaming tokens experienced fluctuations but stabilized at $201 billion by the end of the month, representing a 6.7% increase.
The average daily transaction volume of blockchain games was 8 million transactions, a 7.3% decrease from April.
Meanwhile, the average daily active users (calculated by wallet numbers) increased to 3.3 million, a 9.6% month-over-month growth, setting a new historical record.
After observing market dynamics in May, we noted an interesting phenomenon: the declining trend in daily transaction volume in blockchain games coexisting with the rising trend in daily active users. Since October 2023, the ratio of daily transaction volume to daily active users has gradually decreased from 17.2 to 2.3.
We believe several factors may contribute to this trend. Firstly, the rise of the “play-to-airdrop” strategy has led to more users participating in games primarily to complete tasks rather than for entertainment, resulting in reduced interaction frequency. Secondly, many developers opt for partially on-chain games or mini-games to balance seamless Web3 integration with engaging gameplay. These games often create user wallets or issue tokens on-chain, or only have tokens on-chain, but most activities occur off-chain.
Additionally, security incidents occurred in May. An unidentified hacker breached Gala Games’ internal controls and minted 5 billion new GALA tokens on May 20th. The hacker subsequently sold 600 million tokens on a decentralized exchange, exchanging them for nearly 6,000 ETH. Within hours of the attack, the Gala Games team detected the breach and took action, activating their blacklist feature to isolate the attacker’s address. Subsequently, the stolen funds swiftly moved from the hacker’s wallet to a wallet controlled by Gala Games. Although the GALA token dropped by over 15% immediately after the incident, it quickly recovered due to the team’s swift response. This serves as a valuable lesson.
Blockchain Gaming Public Chains
In May, a total of 1,525 games remained active across multiple blockchain platforms, with BNB Chain, Polygon, and Ethereum occupying leading positions with market shares of 23.3%, 19.7%, and 15.7%, respectively.
Among the 3.3 million daily active users in May, Ronin, Polygon, and NEAR continued to lead, similar to the previous month. Ronin maintained its dominance with approximately 29.0% market share. NEAR’s share increased from 12.1% at the beginning of May to 14.8% by the end of the month. Flow also showed growth, with its share rising from 0.7% to 3.3%. In contrast, BNB Chain’s share declined from 8.0% to 5.9%.
In May, various public chains implemented strategic initiatives aimed at enhancing the gaming ecosystem.
On May 24th, the Arbitrum community initiated a vote on the 200 million ARB Game Catalyst Plan, which aims to strengthen the gaming ecosystem on the network. The vote will conclude on June 8th and has already garnered majority support, with a support rate of 80.6%. Meanwhile, Arbitrum is developing a Layer 3 gaming-specific chain ecosystem, and the multi-chain NFT game ecosystem Polychain Monsters announced the launch of a Layer 3 gaming-specific chain based on Arbitrum Orbit through Altlayer.
Starknet Foundation granted 2 million STRK in funding to the blockchain metaverse game Realms.World, as part of its strategic plan to enhance the Starknet gaming ecosystem announced in March by distributing 50 million STRK tokens.
The classic soccer game “Captain Tsubasa”, developed by the subsidiary Mint Town Co., Ltd. of mobile game giant KLab Inc. and BLOCKSMITH&Co., officially launched on Oasys in May. Oasys is actively seeking further collaboration with Mint Town and other developers to integrate high-quality intellectual property (IP) into blockchain games.
TON continued to attract widespread attention. In early May, Pantera Capital, managing over $50 billion in assets, announced its “largest investment ever” in TON. Additionally, with the rise of Notcoin, projects like Tapswap and Hamster Kombat in-game bots also gained increasing attention.
Blockchain Gaming Project Overview
In May, the total number of blockchain games climbed to 3,153, with 1,272 in active status. Among these active games, 263 successfully attracted over 1,000 monthly users, accounting for 8.3% of the total game count and 20.7% of active games.
Despite the blockchain gaming industry being very active in recent years, there is a lack of flagship games to truly showcase its potential. Popular games like Pixels, Matr1x FIRE, Sweat Economy, and Another World have garnered attention, but many games still struggle to surpass 1,000 monthly active on-chain users. This stagnation is partly due to the popularity of non-full-chain games, where most data remains off-chain, although full-chain games and AAA games have been the dominant narrative for a long time.
Facing these challenges, the rise of Telegram game bots and mobile mini-games, exemplified by Notcoin, indicate industry changes on the horizon. Binance launched the NOT token through its Launchpool on May 9th, with trading starting on May 16th, further driving this trend. Today, Notcoin boasts a strong community of over 7.7 million subscribers on Telegram, and similar projects like Hamster Kombat and Tapswap have also garnered significant attention, with 25.3 million and 18 million subscribers respectively.
These developments suggest that mini-games and game bots may pave the way for wider adoption of Web3. Unlike the long development cycles required for full-chain games or AAA games, these platforms prioritize flexibility and rapid deployment. They can act quickly and iterate rapidly. This approach may be more effective in attracting and retaining a large number of users than pursuing complex but less accessible gaming experiences.
Blockchain Gaming Investment and Financing
In May, the blockchain gaming industry raised $44.95 million in 15 financing activities, representing a 42.9% decrease compared to April.
Seeds Labs successfully raised $12 million in a seed round, with support from Avalanche’s Blizzard Fund, the Solana Foundation, and Hashkey Capital. Their flagship product, the Web3 game Bladerite, was officially launched in May.
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This content is for industry research and communication purposes only, and does not constitute any investment advice. The market carries risks, and investments should be made cautiously.
