In March, there was a noticeable decrease in the excitement around the crypto market compared to earlier in the year. While crypto benefited from capital flight as a result of high-profile bank failures, there wasn't a significant shift in the popularity of NFTs and games. We observed a steady and unchanged number of tracked unique active wallets (UAWs) in the gaming industry, which is expected until a substantial new game release attracts more players to web3. However, some new games and ecosystems have made progress, and it’s now clear mobile will be a crucial factor in the push for web3 games this year.

Transaction volume on secondary markets experienced some slowdown as overall enthusiasm grew more muted without an ample enough number of new projects to rally behind. However, Yuga Labs and Immutable made some progress by expanding their presence in the top secondary market volume with the introduction of new NFTs. Both Polygon and Immutable also announced new zkEVM chains at the Game Developers Conference (GDC) last month. This news is expected to generate some excitement around the dominance of these two chains, but the full impact may not be apparent until next month. 

March did see an increase in fundraising, despite the lack of new project and game launches. We continue to see this alternating pattern of big and small fundraising months, although it’s a positive development that interest remains relatively stable. In another good sign, we noted a decrease in general hostility toward web3 at GDC. 

We’re still waiting for some of the bigger game launches, most of which do not have concrete release dates, but more and more early releases and betas have begun to trickle out. We’re also seeing a continued growth in Japanese and South Korean developers, like Square Enix, moving quickly into web3 and building on the South Korean blockchain Klaytn. Unfortunately, South Korea has yet to reverse its ban on web3 games over speculation concerns, but we anticipate that happening at some point in the future as pressure mounts and more web3 games gain traction.

Now, let’s dive into March’s notable game releases, UAW stats, transaction trends, and funding announcements.

Notable Releases

Hunters On-Chain, a web3 battle royale game, was released on the Polygon testnet for both web and mobile last month. While the testnet release only includes one mode, there are multiple modes in development. The game is a web3 remake of a previous Hunters game by the same team of experienced developers. The game is playable in the browser via Unity WebGL and on Android, and both versions are available on BoomLand’s website. The game also uses the Sequence wallet for easier onboarding.

Other Noteworthy Releases:

• Chainmonsters released on the Epic Game Store in Early Access. The game is a Pokémon-like monster collecting experience with web3 elements, including NFT of the collectible creatures and land ownership. 
• Cross the Ages, a web3 TCG backed by Ubisoft, released its mobile version globally at the end of the month. The game uses a unique grid system of card capturing instead of a typical TCG battlefield, but it still incorporates standard card collecting and deckbuilding. So far, interest in the mobile version seems low with Google Play only showing 1,000-plus downloads and zero reviews.
• Symbiogenesis, a web3 narrative game from Square Enix, launched a website last month that included some gameplay reveals and further hints via the project’s Discord server. The gameplay at the moment just revolves around zooming in on a large map image and clicking spots to find NFTs; see our previous write-up for more in-depth analysis on the project. The initial teaser quickly distributed all the 30,000 available NFT rewards, but Sqiuare Enix is planning to release more content released over the next few months.

Unique Active Wallets

• Per DappRadar, the rate of blockchain gaming daily UAWs in March continued to stagnate with a mere 0.5% change compared to the previous month's drop. There was a bit of variation among the top games for the month as newer titles replaced some of the existing titles. 
• Besides last month’s Oath of Peak release, most new games are still focused on web3 native audiences and therefore aren’t significantly growing the active gamer base.
  • It’s also worth noting that a wallet interacting with a game even once in a day will cause it to register as a monthly UAW on DappRadar’s tracker. This means that even if overall activity in the current crop of games is dwindling, as long as the remaining player base performs some form of contract interaction once a day it will look just as active as more significant daily interaction. 
  • This also means quick and easy-to-play games with low session times are more favored in the current UAW tracking metrics, and especially those games with consistent blockchain interaction. 
• There are still plenty of games in the alpha or beta stages that don’t show up in wallet tracking for quite some time. Many of the higher-quality games trying to attract traditional gamers remain far away from release.
  • We anticipate that UAWs will continue to remain mostly within the same range as the last few months or slightly lower until a new release captures a broader user base, most likely on mobile. 
  • If the macroeconomic market conditions grow worse, we could also see a reduction in UAWs from players liquidating their assets. There is some uncertainty around regulatory action that could have dramatic effects on UAWs, too, especially if it applies to both tokens and NFTs.
• As a reminder, UAWs are not a perfect indicator of a game’s general popularity. A user can have more than one wallet — meaning these figures may potentially overestimate actual user activity. Conversely, a user can play a game but not transact with a blockchain over a period of time — potentially underestimating actual user activity. Bots are also common across many web3 games as a function of play-to-earn economies and will also affect UAW metrics.

Top Games by Unique Active Wallets

• Alien Worlds, which saw UAWs decline 1% from February to March, has consistently maintained its UAW count when compared to rivals like Splinterlands. 

• The mix of quicker and easier web-based game actions and bot activity has managed to keep the game at least a continued habit among invested players. 
• Although a large portion of this number likely includes extractive bots and players using multiple wallets, maintaining such large numbers is still impressive going forward. That’s especially true given the game's unlikely potential for user base growth without significant upgrades from developer Dacoco. 

• Iskra made a strong debut as a South Korean game ecosystem on the regional Klaytn blockchain. There is currently only one live game so far, the RPG Three Kingdoms Multiverse, and it’s available on the Google Play Store.
  • Iskra also provides a daily free spin on its website to try and win tokens or NFTs, and it’s likely DappRadar also tracks this as UAW activity. 
  • The platform also has five more games in active development across multiple genres. Unlike other ecosystem plays like Gameta, Iskra isn’t focusing on simplistic hypercasual games, but rather higher-quality and polished titles. 
  • Despite the platform skewing towards play-to-earn games, so far the Iskra token price has increased, and there is some skepticism for long-term growth considering the lack of a multi-game economic design.
• Benji Bananas managed to recover from the dip it had last month thanks to increased community engagement on social media platforms and its #jungleparty competitions.
  • With relatively shallow gameplay and low retention mechanisms, the game is definitely relying on rewards and community efforts to keep its UAWs steady. 
  • Yet unless bots keep its UAWs artificially inflated, it’s likely that the game will eventually decline. Of course, a reduced player base does increase an individual’s chances of rewards, so there could be some benefit to remaining invested even as the player base dwindles.
• Hunters On-Chain, a web3 revamp of an older game called Hunters, launched on the Polygon testnet in early March with a strong debut of 55,000 UAW on launch day.
  • But that figure dropped quickly down to just 12,300 UAW by the end of the last month. Currently, only one game mode is available and it’s possible the other modes may need to follow quickly to maintain interest and avoid deeper declines. 
  • It’s also likely the case that with the testnet release, many players have simply lost interest for now. Minting happened right at the end of the month, so we’ll have to see if the game can maintain high enough UAWs to show up next month. So far, it’s looking doubtful. 
• Axie Infinity is continuing its slow decline and risks falling out of the Top 10 next month. There’s still clearly a committed player base for the game, but nothing from Sky Mavis so far is helping it grow.
  • Considering Ronin logged the lowest trading volume of any secondary market, it’s also likely that remaining players are spending less and less on the game as well. 
  • Some good news is coming, however, as Sky Mavis announced that they have selected five game studios to build new games on Ronin. However, the projects currently lack clear timelines or roadmaps.
• Trickshot Blitz managed to carry over some momentum from February with a great first week of March.
  • At this point, Trickshot Blitz is doing significantly better in terms of UAWs than its sibling game Solitaire Blitz, which dropped all the way down to the 35th spot with a mere 10,800 UAWs for the month of March.
  • It’s not a surprise as Trickshot Blitz has a bit more depth and Joyride Games shifted its UA spend accordingly. Considering the earnings-focused audience this type of game attracts, it’s doubtful the UA expenditure will be sustainable longer term. 

Transaction Volume

• Secondary market transaction volume took a bit of a hit in March with a 28.5% decline due in large part to Ethereum, which experienced significant growth at the beginning of the year that it has not been able to maintain. 

• With most of the trading volume still focused around non-game projects that don’t sustain long-term trading activity, these monthly numbers continue to depend on hype. Excitement around NFT projects is still surprisingly high given the tightening of money in the market, which in most cases should reduce spend. 
• It is worth considering, however, that marketplace volume incentivizing through rewards such as Blur tokens, marketplace fee competition, and royalty reductions can also juice the numbers to exaggerate activity.

• As we noted above, Ethereum suffered the biggest drop in secondary market volume of all the blockchains this month, dropping from $859 million in February down to just $541 million in March.
  • A substantial portion of this decline can be attributed to the drop in volume for bigger projects like Yuga Labs’ Sewer Pass NFT and Otherdeeds. 
  • Another big project that fell out of the Top 10 completely is Digidaigaku, which spent the entire month teasing the reveal of “Baby Dragons” from the “Dragon Egg” NFTs given away as part of Limit Break Super Bowl commercial. That left the rest of the ecosystem idle in the meantime. We do expect that there may be some heightened trading around the project now that the Baby Dragon NFTs are revealed, and Limit Break will likely have more activities planned for April. 
• The other culprit behind the Ethereum volume decline last month is the shift to competing blockchains. Immutable hit an all-time high in secondary market trading volume, going from $23 million in February to $28 million in March.
  • This was partly due to projects like Illuvium’s Illuvitars (see our coverage here) and Blocklords contributing to the Immutable market volume on top of the continued success of Gods Unchained. The increased interest in Immutable after its big GDC partnership announcement with Polygon for zkEVM technology (see our coverage here) may have also increased trading interest. 
• Solana also had a strong month, going from $76 million last month to $93 million in March and nearly doubling its market share among the chains from 7% to 13%.
  • Unfortunately Solana’s secondary market trading volume is still almost entirely NFT PFP projects. Despite supposedly being a gaming-friendly chain due to superior transaction speed, interest in developing games on Solana has continued to wane, especially in light of the web3 gaming industry’s shift to Polygon and Immutable. 
• Flow unfortunately continues to flounder, with little success with third-party developers outside of the Solitaire and Trickshot Blitz games. One of the more promising games for the network, Chainmonsters, also switched over to Immutable.
  • At this point, Flow’s secondary trading volume is still primarily driven by NBA Top Shot, NFL All Day, and UFC Strike. Considering Dapper Labs’ recent rounds of layoffs and cutbacks, it’s difficult to see how Flow will manage a turnaround fast enough to stop the bleeding.

Top Games by NFT Transaction Volume

• The top five games by NFT transaction volumes experienced a fair bit of shakeup in March. Part of this is due to the swap in volume from the Sewer Pass NFT to the NFT it transformed into, called HV-MTL NFTs (see our coverage here). 
• The Otherdeed land NFTs also experienced a surprising decline, despite the successful “Second Trip” play test Yuga Labs hosted inside its Otherside metaverse platform. This is even more surprising given the company also announced Legends of the Mara, which is a resource management game powered by Otherdeed land NFTs. 

• MG Land, now in second place, processed a large volume of land sales this month. Rather than building on 3D spaces, the virtual world is built using very PFP-centric islands in a very simple isometric 2D social space.
  • MG Land is definitely closer to something like Habbo Hotel in being essentially a graphical chat room inside a simple flat space designed by the land holder. 
  • The project leans heavily into NFT culture, including using 2D PFPs as avatars rather than trying to be a typical 3D virtual world like Decentraland or The Sandbox. 
  • Alpha Season 3 took up almost the entirety of March and required land to participate in the token contest, which helped drive secondary market volume. This also means this activity likely won’t be sustainable in the future. 
• Digidaigaku as a whole saw a big decline as the release of Dragon Egg NFTs was staggered as a result of the Super Bowl whitelist giveaway.
  • A lot of the trading volume around Digidaigaku NFTs revolves around the quest-based crafting system (see our coverage here) and airdrops for specific NFT holders. The airdrop for DigiDaigaku NFT holders this month was just “Dragon Essence,” an NFT related to Dragon Eggs NFTs of which there was only a free mint of 5,000 units. 
  • Limit Break’s lack of integration of past NFTs resulted in reduced trading volume for all of its other tokens. If the new Baby Dragon NFTs have some relationship with the other tokens, we expect to see trading volume ramp up again.
• Gods Unchained saw a decline in March, but with the release of new card set Band of the Wolf on March 30th, we expect to see some increased secondary market trading volume this month.
  • The set introduces a new “crafting” mechanic for upgrading card power levels that might boost excitement. Unfortunately, the mobile release is still not available to the public yet, but we anticipate that if bugs are kept to a minimum it could potentially expand the audience through mobile app store marketing. The current version is simply a downloaded executable from the website.
• Blocklords got a nice 31% transaction volume boost for its Banner NFTs around a promotion to claim new Hunter NFTs.
  • The game itself still is not out yet, but speculative interest has kept up trading for the game. With the pyramid-like feudal structure of the ecosystem, aggressive early adopters and traders will definitely be focused on the speculative gains. 
• Illutivars made a decent debut, although a little bit at the expense of diminished Illuvium Land sales.
  • These collectible NFT creatures are based on Illuvium IP and part of a collection game (see our write-up here). Given the limited “gameplay” of these collectibles we do expect that the newness will wear off quickly and reduced trading volume in April without some new announcement to renew interest.

Fundraising Events 

• Despite a 15% growth in fundraising compared to February, only a little more than half as many projects received funding. There were surprisingly no raises below $3 million this month and quite a few between $20 million and $30 million. Unfortunately, there were substantially fewer new game studios being formed. 
• The biggest and most interesting funding round belonged to Eve Online developer CCP Games, which raised $40 million in a round led by a16z to build a web3 game set in the Eve universe.
  • The announcement at GDC was a little light on details, but given CCP’s depth of knowledge and experience around driving complex virtual economies, the project is bound to be a highly anticipated web4 release well beyond today’s core blockchain gaming audience.
• Sports and web3 are still proving a great match with Matchday raising a solid $21 million last month to develop a suite of casual-friendly football games. The developer already has agreements with FIFA and backing from Lionel Messi’s VC firm Play Time.
  • A suite of games may be ambitious, but so far sports-related NFT and blockchain gaming projects have attracted some serious funding — NBA Top Shot, Arsenal and Unagi’s Soccerverse, and Sorare to name a few — so perhaps it is indeed a smart move. 
• Funding toward web3 shooters Jungle and VitalXP, which raised $6 million and $3 million respectively, still represent decently sized rounds given the difficulty of funding web3 games in the current economic climate.
  • Jungle is pursuing a strategy of acquiring existing web2 games that have a potential to be adapted into web3 games starting with a mobile shooter, while VitalXP is going for more of a gritty sci-fi aesthetic with its game Lowlife Forms.

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.