Cointime

Download App
iOS & Android

GameFi Season: Unveiling the Dynamics of Crypto Gaming in 2023

Against the backdrop of BTC's ascent from $25,000 to $40,000, the GameFi sector experienced a notable surge, propelled by the introduction and anticipated launches of several projects.

Summary

The gaming sector has undergone a substantial transformation in recent years with the emergence of GameFi, a convergence of gaming and decentralized finance (DeFi) empowered by NFTs and blockchain technology. GameFi not only redefines the gaming landscape but also integrates financial elements into the gaming experience, thereby establishing an economic model for games.

During the last bull market, notable Play-to-Earn (P2E) games such as Axie, Farmer World, and StepN emerged. Strictly speaking, these games did not offer an exceptional user experience; rather, their surge was predominantly driven by conceptual enthusiasm. However, following the recent bear market, many game projects initiated during that period have undergone substantial, long-term development. This also implies that 2024 will witness the launch of a plethora of high-quality Web3 games.

Besides, recent data suggests a resurgence of interest and growth within the gaming sector. Our analysis leads us to forecast that this positive momentum is poised to endure throughout the upcoming bull market.

Overall GameFi Market Performance 

Despite unfavorable market conditions, 2023 witnessed a substantial surge in networks targeting Web3 gaming. Especially since October, the web3 gaming sector has experienced robust growth in tandem with the resurgence of the crypto industry. Based on the data from Footprint, the market capitalization of GameFi tokens has reached $7 billion as of December 3rd, 2023, doubling compared to the end of 2022.  

Throughout the year 2023, the market capitalization of GameFi tokens demonstrated a strong correlation with Bitcoin. Notably, during periods of fluctuation in Bitcoin's market capitalization, GameFi tokens displayed amplified volatility. This implies that GameFi projects inherently carry higher risks and are more susceptible to fluctuations in funding, especially during periods of market downturn.

Currently, the Web3 gaming landscape is vibrant, with approximately 2,700 active game projects and a market cap of $7 billion as of Dec 3rd. However, despite the substantial market cap, the challenges of user acquisition and retention persist. It’s important to note that games with more than 1,000 monthly active users are still a relatively small percentage, hovering around 9% of the total number of games, highlighting the difficulties faced by Web3 game developers in attracting and retaining users. 

Throughout the first ten months of 2023, on-chain analysis reveals that the daily active users of Web3 games consistently hovered around 1 million. Subsequently, the number of active users exhibited a growth trend and remained high for Q4.

GameFi Performance by Chain

As of December 3rd, 2023, the distribution of games across various blockchains exhibits stability, with BNB Chain leading at 29.6%, closely followed by Ethereum at 23.7%, and Polygon at 14.7%. However, a significant disparity is evident between these top three chains and second-tier blockchains such as Wax and EOS, which hold distributions of 5.0% and 2.1%, respectively.

Since 2022, the distribution pattern of games across diverse blockchains has demonstrated a consistent trend. With the flourishing Web3 gaming market, there is an expectation that additional chains will emerge, potentially posing challenges to the dominance of the top three chains.

GameFi Investment and Funding

Based on data from Footprint Analytics, aimed to empower players through authentic ownership over in-game assets, a whole new market of crypto games has taken shape, evaluated at more than $27B at the beginning of 2022. Despite experiencing a decline of more than 85% by the end of 2022, the value proposition of blockchain gaming has not escaped the notice of investors. From $3.8B in 2021, venture capital funding increased to a staggering $5.4B in 2022 (for the Web3 gaming niche alone) despite the macroeconomic landscape.  

Note: 2020-2022:Footprint(Web3 gaming niche alone);2023Q1-Q3:Dappradar(Game/Metaverse)

Based on data from Dappradar, Web3 gaming projects accumulated a substantial $2.3 billion in funding from Q1 to Q3 of 2023. Although this constitutes slightly less than 50% of the funds raised in the previous year, it's crucial to contextualize these figures within the unique market dynamics of 2023.

Furthermore, positive developments for GameFi were concentrated in November, with notable announcements from projects like Pixels, Illuvium, and Gala Games, among others. Additionally, the entry of traditional gaming giants like Ubisoft has elevated user expectations for the playability of blockchain games. With enhancing gaming experiences, and reduced user entry barriers, the future is poised to attract more capital and users into space.

On a note, we often reiterate that the investments executed in the previous year are poised to yield returns in the current year and potentially extend into the subsequent one. Notably, during Q4 2023, we were privileged to witness previews and beta versions of highly anticipated Web3 games. Consequently, a strategic decision was made to inaugurate the Coresky GameFi Season, thereby enhancing enthusiasm and unlocking the sector's inherent potential.  

Prospects and Expectations for GameFi

In the previous GameFi Summer, major investment institutions heavily focused on the gaming sector. However, due to the heightened complexity of gameplay, substantial development tasks, and longer production cycles compared to other applications, coupled with the unfavorable timing of launching projects during the bear market, significant challenges were encountered.

As the crypto market environment improved and sector rotation dynamics shaped the current bullish trend, GameFi witnessed a renewed surge of interest. Notably, established entities introduced new games (GasHero), veteran blockchain gaming platforms (Ronin), and emerging game titles (Bigtime), all gaining prominence in this revived wave of enthusiasm.

In terms of project cycles, Web3 games that secured funding during the previous GameFi Summer are now reaching the final stages of game production, with funding consumption nearing completion. Combined with the overall improvement in the macroeconomic landscape, it is inevitable that a substantial number of high-quality games will be launched on the market over the next year.

Conclusion

As we know, the potential of gaming to attract millions of new users to Web3 can not be underestimated. Looking at the current on-chain data related to the revival of GameFi, it is reasonable to expect that this positive momentum in the GameFi sector will endure throughout 2024. And gaming tokens will likely be one of the biggest winners in the coming bull market.

Although GameFi has encountered new opportunities, it still faces many challenges, such as user experience, token economy, and security supervision. And observing the GameFi sector, there is no single game that has managed to navigate through both bull and bear markets, ensuring long-term and stable operations. Therefore, effective investment strategies are still necessary.


Coresky is an Asset-packaged NFT launchpad and trading platform. The Coresky Launchpad converts primary market currency rights into Asset-packaged NFTs. Coresky leverages Launchpad's economic utility to drive user transactions while also addressing both primary and secondary market liquidity for crypto rights and the NFT trading market. 

Learn More About Coresky:

Website:https://www.coresky.com/

Twitter:https://twitter.com/Coreskyofficial

TG Official:https://t.me/Coreskyofficial

TG Channel:https://t.me/CoreskyLaunchpadChannel

Discord:https://discord.gg/coresky

Medium:https://medium.com/@CoreskyLaunchpad

Comments

All Comments

Recommended for you

  • BuildBear Labs Raises $1.9M to Accelerate Development of Web3 Tools for Secure dApp Creation

    Singapore-based BuildBear Labs has secured $1.9m in funding from investors including Superscrypt, Tribe Capital, and 1kx, as well as angel investors such as Kris Kaczor and Ken Fromm. The funds will be used to speed up development of the company's flagship platform, which provides developers with testing and validation solutions for secure decentralized applications. BuildBear Labs' platform is dedicated to dApp development and testing, offering developers the ability to create customised Private Testnet sandboxes across multiple EVM and EVM-compatible blockchain networks, with features including private faucets for unlimited Native and ERC20 token minting.

  • Multiple incidents of stETH being stolen and cross-chained to the Blast mainnet were discovered. The victim’s mnemonic words/private keys may have been leaked.

    SlowMist founder, Yu Xian, posted on X platform stating that SlowMist and MistTrack have received at least four cases of stETH being stolen and cross-chain transferred to the Blast mainnet. The common feature is that a small amount of ETH transaction fee is sent from an address with obvious traces (including exchanges) to the stolen address, and then stETH is cross-chain transferred to the Blast mainnet for subsequent transfer, and finally the remaining small amount of ETH in the victim's address is transferred to different ETH addresses. The known loss exceeds 100 stETH, and it is likely a group event. The mnemonic phrase/private key of these victims must have been leaked, and the attackers lurked to start on the Blast mainnet. Previously, Scam Sniffer monitoring showed that a certain address lost over 10 BTC pledged on Aave and some PANDORA due to interaction (clicking on the signature authorization) with a fake Blast airdrop website, with a total loss of approximately $717,817.

  • Hong Kong has closed the application for virtual asset trading platform licenses, and a total of 22 virtual asset trading platforms are waiting for approval.

    The Hong Kong Securities and Futures Commission website shows that the deadline for virtual asset trading platform license applications was yesterday (29th). As of the update on February 28th, there were a total of 22 virtual asset trading platform applicants.The applicants include Bybit, OKX, Crypto.com, Gate.io, HTX, Bullish, and others.Ammbr, BitHarbour, and Huobi HK withdrew their applications, while Meex had its application returned by the Securities and Futures Commission.In addition, virtual asset trading platforms operating in Hong Kong that did not submit license applications to the Securities and Futures Commission by yesterday (29th) must end their business in Hong Kong by May 31, 2024, at the latest.

  • In February, NFT sales on the Bitcoin chain were approximately US$301 million, down nearly 10% from the previous month.

    According to cryptoslam data, the sales of NFTs on the Bitcoin blockchain in February reached $301,983,035.33, a decrease of nearly 10% from the previous month's $335,121,977.66, and the fourth-highest monthly sales to date. The total number of NFT transactions on the Bitcoin blockchain in February was approximately 203,000, a decrease of about 18.4% from the previous month. In addition, there were 67,139 independent buyers and 57,724 independent sellers of NFTs on the Bitcoin blockchain last month.

  • Attorneys general of many U.S. states: SEC is expanding the definition of “investment contract”

    Law enforcement officials from Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota, and Texas submitted a joint amicus brief (or friend of the court brief) to the United States Securities and Exchange Commission in the lawsuit against Kraken on Thursday. The brief states that the states are not supporting the exchange, but rather opposing federal regulatory agencies. If the SEC wins, it may prioritize state consumer protection laws and state regulations surrounding cryptocurrencies.

  • Exploring the Horizon : The Convergence of AI & Crypto

    While this synergy is in its early stages, projects at the AI-crypto intersection are constructing essential infrastructure for scalable on-chain AI interactions. There's a promising momentum expected to grow through 2024 and beyond.

  • SERAPH ·

    SERAPH to Initiate Free Trade for Soul Series NFTs

    The SERAPH team announces the highly anticipated Soul Series NFTs will become available for open trading on February 29, 2024, at 9 PM (UTC+8).

  • Ethereum mainnet interaction costs rise sharply

    On March 1st, due to the heat of the market and the rise in the price of Ethereum, the interaction cost on the Ethereum mainnet has significantly increased. In the past 24 hours, the lowest average value of Gas on the Ethereum mainnet was about 50 gwei, under which:

  • Blockchain data analysis company Octav completes US$4 million in strategic financing

    According to official sources, blockchain data analysis company Octav has announced the completion of a strategic investment of $4 million. The funding round was led by high net worth individuals in the cryptocurrency space, but their identities have not been disclosed. Currently, Octav is primarily focused on unlocking the potential of on-chain data using machine learning technology to improve the accuracy of data labeling and classification. Its clients include Gelato, Request Finance, and Alchemix.

  • Validation Cloud raises $5.8M in funding for its Web3 technology platform.

    Swiss Web3 tech company, Validation Cloud, has secured $5.8 million in its inaugural funding round. The investment was led by Cadenza Ventures, with participation from Blockchain Founders Fund, Bloccelerate, Blockwall, Side Door Ventures, Metamatic, GS Futures, and AP Capital. The funds will be used to expand the company's operations and development efforts. Validation Cloud's innovative system architecture, dubbed the "Cloudflare of Web3," provides scalable and intelligent Staking, Node API, and Data services, supporting a range of ecosystems from established networks like Chainlink and Hedera to emerging ones such as Aptos, Eigenlayer, and Berachain, laying the groundwork for enterprise adoption.