This article is an excerpt translated from CoinMarketCap and Footprint Analytics: 2022 GameFi Industry Report
25/08/2022
Since the beginning of 2022, the cryptocurrency market has been in a downtrend amid severe economic volatility and rising inflation. Key indicators such as the Fear & Greed Index have reflected extreme fear, directly affecting the GameFi industry. This has been evident in the gradual decline in the number of unique wallet addresses interacting with smart contracts.
Bitcoin prices and Fear & Greed levels from January to July 2022
Trading volumes across Ronin, BNB and Harmony also differed significantly from those of other networks. BNB benefited from low transaction fees and efforts to encourage new projects to launch on the network. Ronin and Harmony, by contrast, depended largely on a single ecosystem, with Axie Infinity and DeFi Kingdoms driving trading activity on their respective networks.
Game transactions by chain, showing that WAX and Hive ranked as the two leading chains by transaction volume during the first half of 2022
Three Key Takeaways from the First Half of 2022
● Popular games in a bull market do not guarantee long-term sustainability or future success
Over the past six months, news coverage across various media outlets has focused heavily on the growth of Axie Infinity and STEPN, the world's first move-to-earn game. However, research found that neither game ranked among those with the highest average player counts between January and July 2022. Instead, Alien Worlds and Splinterlands attracted larger average player bases and ranked among the leading games by player count.
Comparison of the number of players in Alien Worlds and Splinterlands
● Popular games in a bull market do not guarantee long-term sustainability or future success
WAX and Hive were the largest GameFi chains by transaction count. However, both remained heavily dependent on the success of users playing Alien Worlds (54.55%) and Splinterlands (99.85%), respectively. BNB was the third-largest GameFi chain when measured by on-chain transaction count and the number of games, despite not yet having a flagship game in its ecosystem comparable to those on other chains.
● Developers are focused on building new multichain ecosystems
Leading games such as Kingdoms and STEPN have been developed across two major chains. STEPN began on Solana and later expanded to BNB. Operating across two chains continues to present challenges, including the performance of cross-chain bridges and differing levels of demand on each chain. Growth on BNB was found to be nine times higher than on Solana, creating a significant challenge.
Chain-by-Chain Analysis
Since May 2022, growth across the chains has been trending downward. Only 47 new projects launched in May, followed by 63 projects in June and just 38 in July. The combined total remained below the number of projects launched in the first quarter.
BNB and Ethereum remained the largest chains with ecosystems suitable for gaming, hosting 582 and 538 projects, respectively. BNB therefore became the chain with the highest number of new gaming projects launched each month, even during the bear market. Polygon was the next fastest-growing chain. Polygon, WAX and BNB shared the same strengths: they were welcoming to new gaming projects and offered lower transaction fees.
The five leading blockchain ecosystems continued to have large gaming populations. WAX grew to 370,000 players by the end of July. Hive, however, experienced a decline in its gaming population in June, from 360,000 to just 140,000 players. This was driven by a fall in the number of Splinterlands players, as the game is the core of the Hive chain.
Market share by chain from January to July 2022
The market-share data for projects on each chain shows that BNB had the largest share and a strong, diverse ecosystem. No individual game project on BNB accounted for more than 25% of all games on the chain, creating a more balanced environment. By comparison, the leading game projects on Ronin and Harmony accounted for 100% and 99.8% of all games on those chains, respectively. Given the high volatility of the GameFi industry, even leading games can collapse if diversification is lacking and their ecosystems are not sufficiently resilient during a downturn.
Spotlight: Games to Watch in the Second Half of 2022
AAA Games Yet to Reach the Market
As is widely recognized, GameFi still lacks high-quality, sustainable games with tokenomics that support long-term viability. The arrival of new AAA games could help the GameFi industry grow and address this shortage after the bear market ends in the near future. (AAA games are developed by large game studios and require substantial development budgets.)
Games to watch in 2022-2023 include Illuvium, Phantom Galaxies and Big Time.
● Illuvium The game remains in development and has attracted considerable attention, being regarded as a AAA title created by leading blockchain and game developers.
● Phantom Galaxies A joint investment project between Animoca Brands and Blowfish Studios, which is being developed as a flagship title for the blockchain gaming industry. The collaboration between the game development studio and blockchain technology company brings substantial resources to the project.
● Big Time A project developed by Ari Meilich of Big Time Studios, the co-founder of Decentraland. The game is being positioned as a AAA RPG with its own wallet system.
As noted above, the teams behind these projects have extensive experience and proven success in both blockchain and game development. They will draw on high-quality resources to develop AAA games for the blockchain sector.
Can GameFi outperform traditional gaming? And if it can, will each chain be able to handle large-scale usage? These questions represent a major test for Web3 and blockchain gaming. Developers and market participants alike are watching and waiting to see whether blockchain technology can meet users' needs in the future.
Source: CoinMarketCap and Footprint Analytics: 2022 GameFi Industry Report
https://coinmarketcap.com/alexandria/article/coinmarketcap-and-footprint-analytics-2022-gamefi-industry-report