Author: [email protected]
Data Source: GameFi Research Page
In May 2024, Ethereum’s performance received a significant boost due to the SEC approving the preliminary application for an Ethereum ETF. The total market value of blockchain gaming tokens reached $201 billion, a 6.7% increase compared to the previous month. Despite the market value growth, the industry experienced an interesting shift in user engagement, with a decrease in trading volume but a record high number of daily active users. Furthermore, the increasing popularity of mini-games and game bots is gradually changing the landscape of the gaming industry.
This report’s data is sourced from Footprint Analytics’ blockchain gaming research page. It is an easy-to-use dashboard that includes the most important statistics and metrics for understanding the blockchain gaming industry and is updated in real-time.
Macro Market Review
In May 2024, Bitcoin rebounded strongly from its low point at the end of April, climbing from $60,653 at the beginning of the month to $67,606 by the end, a 11.5% increase. At the same time, Ethereum also showed a strong recovery trend, with its price rising from $3,011 to $3,778 during the same period, a significant 25.5% increase.
Market dynamics in May were significantly influenced by regulatory progress, with the US Securities and Exchange Commission (SEC) approving the preliminary application for an 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, the political situation also had an impact on market sentiment. The Trump campaign team announced that they would accept cryptocurrency donations, hinting at the potential profound impact of the upcoming US presidential elections on the cryptocurrency market, which could be comparable to the impact of Federal Reserve monetary policy adjustments.
Conversely, the ongoing resolution process of the Mt. Gox exchange bankruptcy case had a certain degree of restraint on Bitcoin prices. The exchange, which had been bankrupt 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 fluctuated but stabilized at $201 billion by the end of the month, representing a 6.7% increase compared to the previous month.
The average daily transaction volume for blockchain games was 8 million transactions, a 7.3% decrease from April.
At the same time, the average daily active users (calculated by wallet count) increased to 3.3 million, a 9.6% month-on-month growth, setting a new record.
After observing the 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 seeking entertainment, resulting in a decreased interaction frequency. Secondly, many developers choose to partially onboard games or mini-games to balance seamless Web3 integration with engaging gameplay. These games often create user wallets or issue tokens on-chain, or even have tokens on-chain, but most activities take place 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 then sold 600 million tokens on a decentralized exchange in exchange 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 were swiftly transferred from the hacker’s wallet to a wallet controlled by Gala Games. Despite GALA tokens dropping by over 15% immediately after the incident, they quickly recovered due to the team’s prompt 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 23.3%, 19.7%, and 15.7% of the market share, respectively, leading in the space.
Among the 3.3 million daily active users in May, Ronin, Polygon, and NEAR continued to lead, similar to the previous month’s rankings. Ronin maintained its dominance with approximately 29.0% market share. NEAR’s share grew from 12.1% at the beginning of May to 14.8% by the end of the month. Flow also showed growth, with its share increasing from 0.7% to 3.3%. Conversely, BNB Chain’s share declined from 8.0% to 5.9%.
In May, several strategic initiatives aimed at enhancing the gaming ecosystem were implemented across various public chains.
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 and is set to conclude on June 8th. At the time of writing this report, the proposal had received 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 gaming 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 to the blockchain metaverse game Realms.World, as part of its strategic initiative announced in March to enhance the Starknet gaming ecosystem through the distribution of 50 million STRK tokens.
The classic football game “Captain Tsubasa,” developed by Mint Town Co., Ltd., a subsidiary 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 garner widespread attention. In early May, Pantera Capital, managing over $50 billion in assets, announced the “largest investment ever” in TON. Additionally, with the rise of Notcoin, projects like Tapswap and Hamster Kombat 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 games successfully attracted over 1,000 monthly users, accounting for 8.3% of the total games and 20.7% of the active games.
While the blockchain gaming industry has been 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 attracted 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, despite full-chain games and AAA games being the main narrative for a long time.
Facing these challenges, the rise of Telegram game bots and mobile mini-games, exemplified by Notcoin, indicates that industry changes are brewing. Binance launched the NOT token on May 9th through its Launchpool and began trading on May 16th, further driving this trend. Today, Notcoin has a strong community with 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 broader Web3 adoption. Unlike the long development cycles required for full-chain games or AAA games, these platforms focus more on flexibility and rapid deployment. They can act quickly and iterate rapidly. This approach may be more effective than pursuing complex but less accessible gaming experiences, attracting and retaining a large number of users.
Blockchain Gaming Investment and Financing
In May, the blockchain gaming industry raised $44.95 million in 15 financing activities, a 42.9% decrease compared to April.
Seeds Labs successfully raised $12 million in a seed round, supported by 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.
