Web3 game players down 30% in last 3 months, Merssari reports

Blockchain game user scale

Crypto asset (virtual currency) analysis firm Messari pointed out on the 13th that the user base of blockchain games has decreased by 30% in the past three months. Also, the number of new users decreased by 34%.

Blockchain games adopt a “P2E (Play-to-Earn)” model that allows players to earn rewards while playing, mainly in the form of NFTs (non-fungible tokens) representing in-game tokens and project governance tokens. In particular, it has been attracting attention since 2021.

Across gaming applications, monthly active users have declined 30%, and new users have declined 34% since October.

Sustainability struggles stem from creating a truly engaging experience. pic.twitter.com/Jey1KlsXdw

— Messari (@MessariCrypto) February 12, 2023

Axie Infinity, the representative of P2E, has gained great popularity in Southeast Asia, and the number of active users per day reached 1.1 million at its peak in November 2021 (according to blockchain analysis platform Nansen).

According to Messari, the number of unique users of blockchain games in 2022 has fallen from a peak of 2.42 million per month in October last year to 1.7 million as of January. The number of unique users in January 2022 has halved from 6.29 million.

In addition, the number of new user inflows has decreased by 34% in the past three months. The data comes from Footprint Analytics, which visualizes data including NFTs and GameFi across 24 blockchains.

According to statistics site DappRadar, the blockchain games with the most unique address wallets (UAW) in the past month at the time of writing are: Among them, the decrease in users of two Polygon-based games is remarkable.

Source: DappRader

Messari pointed to the lack of “truly compelling experiences” as a factor in the decline in user size.

Challenges of the P2E model

The P2E model only works while new players enter the gaming ecosystem and create demand for old players’ assets.

As the bear market drags on, users who can’t expect their in-game assets to rise in the future are devoting resources to gameplay.

The proof is that the user base of Axie Infinity has increased and decreased along with the price change of the governance token AXS. From the end of 2020 to the first half of 2022, the correlation between price and number of players hit a high level of 0.76.

Source: Frontier

While several games are moving away from the unsustainable toquenomics of P2E and moving to alternative models such as “Play to Own,” new gamers are entering the Web3 gaming space. No compelling results have been obtained.

“NFL Rivals” by Mythical Games prepares an initial team at the start of the game, so users can work at zero initial cost. It also features “Play to Own”, where you can earn tokens and NFTs by winning matches or completing certain objectives.

connection:NFL Goes ‘Play-to-Own’, Backed by Major Developer Mythical Games

Entry of game development companies

Throughout 2022, the amount of investment in blockchain games and NFT projects remained steady compared to other genres.

According to Metaverse Post, 348 companies and projects specializing in NFT, Metaverse, games, AI, VR, and AR have raised a total of about 950 billion yen ($7,164,997,888). It increased by $4.8 billion year-on-year.

Among them, the blockchain game sector raised $4,487.3 million. Led by Yuga Labs, the company behind “Otherside,” the metaverse sector has raised a total of $1,828.9 million through 2022.

The momentum continued into January 2023, with the NFT/gaming sector raising the most funding of all categories, according to The Block Research.

Source: The Block Research

connection:U.S. Coinbase Report, What are the highlights of the cryptocurrency market in 2023?

From 2023 onwards, it is predicted that traditional gaming companies will adopt NFTs and gain more support than emerging projects of Web3 (decentralized web).

On January 18, it was revealed that the Web3 game platform “Intella X” launched by South Korean online game company Neowiz and Polygon (MATIC) has raised approximately 1.57 billion yen ($12 million).

Web3 company Gala Entertainment Properties announced in January the acquisition of more than 15 game titles owned by game developer Ember Entertainment. With these games, we will start mobile advances.

1/ The shift away from Play-to-Earn’s (P2E) ponzi-esque tokenomics to Play-to-Own (P2O) has been a step in the right direction, but is it enough to move gamers into the Web3 gaming sector?

Enter Bet-to-Play, a revolutionary model that allows gamers to bet on themselves.pic.twitter.com/BsSP9s8LEF

— Messari (@MessariCrypto) February 7, 2023

According to Messari, the next boom in blockchain games is expected to be “Bet-to-Play,” which combines gameplay with gambling.

Combined with sports betting and iGaming (online casino/on-casino market), the market size will reach $10 billion in just 11 months of 2021 in the US. Mobile games are also projected to grow to ¥26 trillion ($200 billion) by 2025.

Bet-to-Play is said to be more sustainable than P2E in that 100% of user revenue can be covered by game participation fees for the developer side.

connection:Web3 game Intella X raises 1.6 billion yen

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