Market Overview

Blockchain gaming activity has stabilized despite a challenging scenario from micro and macroeconomic perspectives. The war in Ukraine and the negative performance of the cryptocurrency market hindered the sustained growth shown by games during last year.

However, blockchain gaming activity has grown 2,000% compared to the previous year, which is encouraging for the future of the space.

Game dApps continue developments, and the metaverse seems to be one of the most exciting opportunities in the blockchain industry. Venture Capitalists (VCs) and other investors are continually investing large sums of capital into blockchain games and metaverse projects, surpassing $2.5 billion in investments. Meanwhile, financial institutions estimate the decentralized metaverse has the potential to become at least an $8 trillion market.

Key Takeaways

  • Investments continue pouring into blockchain games as $2.5 billion were raised in Q1; at this pace, 2022 investments will be 150% higher than last year.

  • Blockchain games attracted 1.22 million Unique Active Wallets (UAW) in March, accounting for 52% of the industry’s activity; while the short-term usage seems steady, the use of blockchain games has increased 2,000% from Q1 2021.

52% of blockchain activity comes from game dApps

Amid the challenging macro scenario, blockchain games maintained a steady usage level. A total of 1.17 million UAW connected daily to blockchain games on average during Q1, decreasing 2% from last year’s Q4 daily average. However, the March daily average surpassed 1.22 million daily UAW, showing signs of recovery already.

$2.5 billion was raised by games and metaverse projects in Q1

The amount of capital invested in blockchain games in Q1 is overperforming the $4 billion raised in 2021. In the first three months of 2022, VCs and investors have allocated at least $2.5 billion into blockchain games and their underlying infrastructure. At this pace, Play-to-Earn and metaverse-related projects will add $10 billion this year to keep building the future of this industry.

Animoca Brands raised a $360 million investment at a $5 billion valuation, fostering its presence as one of the leading Web3 brands. Last month, Sequoia Capital led a $450 million investment in Polygon, a network nurturing enticing blockchain game ecosystems.

In March, over $785 million was invested across different projects. Yuga Labs, the studio behind the renowned NFT collection Bored Ape Yacht Club (BAYC), received a $450 million investment led by Animoca Brands, with The Sandbox, FTX, and Coinbase involved in the deal. The investment further cements the status of Yuga Labs as one of the names to follow in the Web3 narrative. It also boosts the team’s metaverse plans as they prepare for the launch of Otherside. Otherside will become an interoperable metaverse platform involving Play-to-Earn games, fashion, and media.

It is also worth highlighting the $200 million investment led by Temasek in Immutable-X (IMX). The investment brings the value of the Sidney-based Ethereum scaling solution to a $2.5 billion Series C valuation. IMX hosts two popular blockchain games in Gods Unchained and Guilds of Guardians. These dApps will be joined by Illuvium and Ember Sword in the upcoming months.

Road ahead

Blockchain games remain one of the most enticing aspects of the industry. Although the demand for blockchain games appears to have slowed, game dApps are still driving most of the industry’s on-chain activity. Notably, the top games are still attracting their player base during a challenging Q1.

The potential of a blockchain-based metaverse is imminent. Leading organizations like Microsoft, Google, Disney, Sony, and several others will undoubtedly try to develop their brands within the metaverse. However, it is essential to understand that the ownership entitled by NFTs and the underlying financial ecosystem enabled by cryptocurrencies and Play-to-Earn games will shift the paradigm from the traditional metaverse that is limited to virtual, augmented reality.

Financial institutions such as Morgan Stanley have estimated the economic potential of the metaverse into at least an $8 trillion industry. The Sandbox’s second Alpha season, Decentraland’s Fashion Week, and NFT Worlds’ high demand point the industry in the right direction.

However, security issues like the Ronin bridge exploit and the challenges to achieving full interoperability remind everyone involved that mainstream adoption is still a few steps away. Blockchain games will need to play a vital role in this equation to reach that point. Along with NFTs, game dApps will be the key to achieving the mass adoption point required to take Web3 to the next level.

Thanks to the overwhelming interest in blockchain games by both institutional and retail investors, the future of Revenant looks promising. We are incredibly excited to contribute to revolutionizing the GameFi sector and Play-to-Earn games with our unique gaming ecosystem.

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