The month of August featured a continued struggle for the blockchain games industry, but at the same time there were a few exciting signs of life. Macroeconomic conditions, a reduced interest in NFTs, and a lack of high quality published games are keeping the market from roaring back this summer, but portions of the ecosystem are showing ongoing development worth celebrating.
Additionally, new games can still quickly gain ground due to limited competition and web3-leaning players looking for their next fix, as was the case of Trickshot Blitz (discussed below), a casual pool-based game. Casual games in general show a lot of potential to bring in new users, which we expect to see continue.
Overall, even though transaction volumes remain weak post-NFT mania, a few rockstar teams are showing solid progress, and unique active wallets appear to be stabilizing and primed for an opportunity to grow. With Ethereum’s slowdown, chains like Immutable, Polygon, and Flow are starting to make increased strides forward, and we’re quite curious to see how “the merge” — Ethereum’s switch from proof-of-work to proof-of-stake — will affect sentiment and market activity this month. At minimum, the merge eliminates one common concern with gamers around Ethereum’s high use of energy. Venture fundraising also showed some signs of recovery this month, at least in blockchain gaming circles, which we cover in more depth further down.
With that, let’s dive into the highlights of August, including notable releases, daily active wallet trends, transaction trends, and fundraising news…
The month’s big release (based on quick uptake) is Trickshot Blitz from Joyride Games, the same studio behind a previously featured game, Solitaire Blitz. Despite being less casual than solitaire, pool/billiards still has decently broad appeal. Much like Solitaire Blitz, the game is still in a limited soft-launch, and it’s a mobile title that uses the same token ($RLY) for web3 rewards. Initial excitement around the game didn’t seem to stick, but Joyride has proven it can conduct big launches on Flow, and we expect that trend to continue with future Blitz games.
While there weren’t any other major game releases this month, there were some big updates in already established games:
The Sandbox finally launched season 3 of its alpha on August 24th, and much like the previous season, the team is slowly releasing new content. A great deal of money and content is riding on the success of the platform, so many eyes will be set on the project. Expectations are far reduced from where they were a few months ago, but this is a team with a tremendous amount to prove.
Axie Infinity: Origin finally transitioned all players over from Axie Infinity: Classic with the launch of Season 0, a 30-day in-game season that now supports SLP/AXS earning along with Rune and Charm NFT crafting. While “Season 0” denotes that there is still much work to be done, this is really the official start of Sky Mavis’s attempted comeback with Axie Infinity (alongside other projects like its creator program). It may take a couple seasons to learn if (or how) the new game and economy designs will drive outsized (and different) results — we’ve been clear about our reservations — but we’ll be paying close attention. Also, thanks to the game now being F2P, you can check it out yourself!
Castle Crush, a Clash Royale-like F2P mobile game from Wildlife Studios, finally launched its web3 functionality in the form of NFT cards that can be used in-game to earn tokens based on daily play. Unlike the addition of the TOWER token to Crazy Defense Heroes (a tower defense game), the NFT cards are heavily integrated into the game and provide a max level +1 version of the existing in-game cards. The launch was not without a few hiccups, but this will be a good test case for existing games looking to identify if it makes sense to integrate web3 functionality.
Unique Active Wallets
Source: DappRadar
In terms of daily unique active wallets (UAWs), there isn’t much new to share this month. Per DappRadar, blockchain gaming UAWs saw a small 0.7% increase to 858.3k from July to August (it’s also roughly flat YoY). This indicates a continued stabilization while everyone waits for a breakout hit to take UAWs to the next level again. Keep in mind, some games may release with substantial userbases, such as F2P mobile titles (or even a game like Axie Infinity: Origin), but not require a wallet as part of the onboarding, which skews the numbers.
As interest in many of the top blockchain games has died down over 2022, there is also a likelihood that some of the stability in UAWs may be an artifact of bots continuing to run even with reduced earnings. In general, many real player wallets are unlikely to be completely abandoned but may stay dormant in terms of game activity for the moment. Of course, this is all averages — some games did see a reduction in UAWs while others saw increases, which we’ll cover below.
As a reminder, UAWs are not a perfect indicator of users. A user can have more than one wallet - potentially overestimating actual user activity. Conversely, a user can play a game but not transact with a blockchain over a period of time - again, potentially underestimating actual user activity. Bots are also common across many games due to the ability to earn and will also show up in UAW numbers.
Top Games by Unique Active Wallets
Alien Worlds continues to be relatively stable at the top, and part of its stability is likely due to having a bot-heavy userbase.
Splinterlands, however, didn’t fare as well this month, with its 15% drop in UAWs likely due to both bots and players leaving because of changes in the rewards system. Many lower-level players and those not heavily invested in the game are seeing less overall benefit from playing, and it’s no surprise to see some churn as a result. It will be interesting to see if the game switching over to SPS rewards instead of DEC in September has any noticeable effect on the playerbase.
Axie Infinity also appears to be trying to maintain its existing playerbase despite the release of Season 0, which is essentially the debut of Origin and the end for Classic. Sky Mavis faces a bit of an uphill battle to grow the userbase after many of its previous players have moved on, and it’s also likely that DappRadar isn’t perfectly estimating this game’s audience due to its F2P nature now.
Solitaire Blitz saw continued growth — 24% this month — despite still being in soft launch. Although the game doesn’t provide huge crypto rewards, it still has nearly universal appeal and could see even more growth as it releases in more territories. Its sibling game, Trickshot Blitz, managed to prove that lightning can strike twice for Joyride Games, and the two games now sit at slots #3 and #4 on the UAW charts. Unlike Solitaire Blitz, however, Trickstar Blitz hasn’t showed the same level of retention; the game lost 81% of UAWs in the 3 days immediately after launch, going from 88k down to 16k. The most likely explanation for the quick drop is the game systems having a bit less casual appeal and higher skill requirements. While the UAW drop isn’t clearly reflected in this month’s data, we expect it to sink much lower in the September charts.
Gameta saw a huge 277% jump thanks to an alpha launch on the BNB chain, which took it from around 53k daily UAWs on the 28th to 91k daily UAWs by the end of the month. While the launch will undoubtedly benefit Gameta long-term, there has already been a slowdown in daily UAWs since the beginning of September, so it may be difficult for it to retain its high placement, although we do expect it to remain relevant in the top 10 next month.
Farmers World continues its slow decline as P2E continues to fade and as the WAX blockchain itself struggles to maintain relevance. On the farming front, Sunflower Land is also slowly bleeding players. It is running a new event that may help keep existing users interested, but it’s unlikely to draw in new players in the near future. We expect that without some major gameplay changes, both games will slowly drop out and mostly be played by diehards and bots.
Transaction Volume
Source: Cryptoslam
Total NFT transaction volumes saw some slight recovery in August, but secondary marketplaces, such as OpenSea, have seen major reductions in activity. Ethereum’s NFT transaction volumes are especially suffering; it fell from $539.6M to $496.6M month-over-month, which is inching closer to June 2021’s $396.40M in volume right before the NFT craze turbocharged volumes into the billions. The upcoming “Ethereum Merge” is likely to have a positive effect on Ethereum activity, but it won’t necessarily bring back the significant NFT hype.
Polygon appeared to have a very outsized growth this month, but much of that can be attributed to a single 65x transaction day for the Uniswap listing on Cryptoslam, and it’s unlikely to show as strong of share next month.
Immutable has been displaying notable growth due to increased activity around token staking and Gods Unchained. Its volume went from $5.2M in July to $28.7M in August, and we expect it to continue growing as the first week of September is already higher than July. While the chain is still primarily home to Gods Unchained, the release of the GameStop NFT marketplace and respective wallet has also helped boost interest. Eventual game launches, such as Illuvium and Guild of Guardians, should also significantly boost activity along with any surprise game or Dapp releases. The company has raised significant money in order to fuel growth, and its partnerships team has locked down agreements with upcoming games teams at an accelerated pace, so it will be worth keeping an eye on as it grows the Other category (for now).
Solana saw a small recovery from the July dip, going from $55.3M to $58.6M this month. The network hasn’t seen another major hit along the lines of StepN yet, so it will be interesting to see if FPS games like Ev.io and Mini Royale: Nations or fitness games like Genopets can boost the blockchain’s traction. Magic Eden as a marketplace also has a lot of funding to deploy that may be targeted to help grow the Solana gaming ecosystem.
Ronin saw a massive drop from $5.04M to $0.94M as Axie Infinity Classic wound down and Origin Season 0 required all marketplace listings to be recreated. With Season 0 lasting through most of September and there being little need for marketplace activity during this test run season, we expect that next month’s numbers won’t be much better. As the overall game meta has changed, we do expect some small interest in breeding and swapping Axie NFTs, but one big test will be seeing if Runes and Charms, which now can be crafted and traded on the marketplace, will have a significant impact on activity.
Flow and WAX both saw some recovery, going from $12.4M to $15.8M and $1.7M to $2M respectively. Flow, of course, benefits from the growth of the Blitz series games and the continued interest in NBA Top Shot (and its similar experiences for NFL and UFC). We wouldn’t be surprised to see WAX continue to struggle from not being perceived as a significant platform for emerging Dapps compared to Flow.
As a reminder, Cryptoslam only accounts for NFT volumes in the secondary market. It also only includes data on the following blockchains: Ethereum, Solana, Avalanche, Ronin, Flow, WAX, Polygon, Panini, Tezos, BSC, Theta, and Immutable.
Source: Cryptoslam
Top Games by NFT Transaction Volume
Cryptoslam continues to not accurately track certain projects like Decentraland and The Sandbox, which are missing from this list. Therefore, it’s not a 100% perfect representation, but there are still notable changes to spot and learn from.
Sorare has continued to do well despite the tough market for NFTs, and the recent announcements of adding baseball (MLB) and basketball (NBA) support are rather encouraging. The game should also see some uptick in activity due to the European football (soccer for Americans) season starting in mid-August. It could get some eventual competition from the Major League Soccer game being developed by Splinterlands, but it’s unlikely to have a large impact.
Otherdeed managed to repeat its 25% drop from last month with a 24% this month despite Snoop and Eminem’s efforts to keep it relevant at the VMAs. Without some significant updates that provide early utility for landholders, it is likely to continue dropping, especially as holders may decide they’d rather have liquidity in uncertain market conditions. There is still enough speculation, however, that we don’t expect it to drop out of the top 10 next month.
The big surprise activity driver of August is the free mint and resulting secondary market pumping of DigiDaigaku NFTs from Limit Break, which we covered in detail over the past couple weeks. The initial hype-based activity has since calmed down, but it may be rekindled by further NFT releases, such as the DigiDaigakuSpirit NFTs that were airdropped to holders of the original NFTs. The question will be if the benefits from holding the original NFT will incentivize continued holding or bring prices back up enough to tempt selling. Much of the plan for the NFTs and the game is yet to be revealed, but it appears to be broader than what Otherside has in store for the near future.
Webaverse released its Genesis Pass NFTs in early August, which drew some excitement at the time, but excitement has waned since. The NFT will eventually grant land in the Upstreet project, which seems to still be an exciting prospect to many despite the overall enthusiasm for land starting to dry up.
Zed Run is sticking around thanks to some continued interest after releasing its Zed governance token. Trading horses is cooling down a little, so it may be difficult to retain market activity in the long-term without improving the game and acquiring new users.
Metamon also managed to nearly return to its June numbers, driven by the hype of a closed beta happening in September. If the response is good, we may see another month with the game on the charts.
Gods Unchained had its best month since March thanks to new staking programs and the build-up to the release of the daily earning feature which launched on August 31st. The game is on track to have similar numbers next month, although user growth is likely to remain slow until the ever-delayed mobile release, as the trading card genre grows more and more crowded.
Genopets’ Habitats saw a burst of activity just prior to the relaunch of its KI token in response to the Solana wallet hack, which affected about 2% of circulating KI tokens. While the game is yet to be released, there is some growing anticipation, especially after the initial burst of activity that other fitness-related apps like StepN saw. There is a large overlapping market for both financialized fitness and pet monster-battling that Genopets is looking to capture, so we do expect some continued interest in the project.
Fundraising Events
In terms of funding, August was a much stronger month than July, with a 168% increase to $779M. There were also two notable fund launches made public, with Symbolic Capital’s new $50M fund and Playstudios’ $10M web3 fund.
The fluctuation between game studio and infrastructure funding we have seen in previous months continues, with this month’s funding leaning more in the infrastructure direction. As the industry continues building toward a larger vision of immersive and social virtual worlds, there is a persisting push towards avatar- and AI-related technologies. There are countless ways for both technologies (and the companies that build them) to succeed in the coming years across games, but it’s inevitable that quality of execution and network effects will drive the first early players to stand out. So far, Ready Player Me — a cross-game avatar platform that raised another $56M this month — has shown some good traction in working across different projects.
While there was little capital raised for many games this month, the huge standout is Limit Break, which quietly raised $200M over two rounds throughout the year. With the project still being in stealth mode and just teasing bits and pieces, it can be difficult to determine what exactly is behind the huge valuation that is rumored to be around $1.8B. A big reason for that does seem to be the person at the head of the project, Gabriel Leydon of Machine Zone (Game of War: Fire Age) fame, who also brought along a large team of former Machine Zone staff. Investors are clearly hoping for a repeat of his success in pioneering F2P on mobile with large revenues. Judging by the reactions to the free NFTs given out and the marketing buzz generated on Twitter, it seems to be off to a good start.
Animoca Brands also experienced a double-dip in funding this month, raising an additional $100M for the main company and $45M for its Japanese subsidiary, Animoca Brands KK. The company continues to accrue and deploy investment capital at what seems to be an unending pace. It’s too early to estimate the success of these investments, but some of the projects it’s created, such as Revv Racing, haven’t aged well, and a lot is riding on others like The Sandbox, which also face big questions.
Gunzilla also got a notable $45M raise for its battle royale project that involves well-known filmmaker Neill Blomkamp. As a genre, battle royale has faced ups and downs with being an overcrowded space that seems to be shifting towards mobile. It remains to be seen if the web3 twists to the genre will make a significant difference.
An unexpected raise this month is $100M from Socios going into football club FC Barcelona and its web3 metaverse projects. As mentioned previously, sports seems to be very willing to push heavily towards blockchain-based projects, and many sports organizations seem to see it as a play to stay relevant to fans.
This month’s increase in funding defies some crypto winter concerns, although it’s also somewhat to be expected given how much raised capital there still is to be deployed. We continue to believe that the next wave of blockchain games will be led by teams prioritizing great gameplay, which takes time to build (hence a long market slump), but the good news is that great teams with promise should easily be able to focus on building without much concern if they budget appropriately.
A big thanks to Devin Becker for writing this essay! If Naavik can be of help as you build or fund games, please reach out.
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