As has become the pattern over the last few months, blockchain gaming player activity remained mostly stable in May, but transaction and fundraising volumes fluctuated quite a bit. Despite the ongoing bear market and whispers of a “crypto winter,” there is still a consistent interest in blockchain gaming.

In May, not much changed across the top games outside of a new entrant at the very end of the month called Mining Network. Ethereum continued to dominate as the leading protocol for NFTs, but Solana is still showing strength (in part thanks to StepN, which we’ll cover next month in a deconstruction). Fundraising rebounded from last month and was more game-dominated as opposed to primarily infrastructure plays. Of course, there’s plenty of dry powder waiting to be deployed, both from older funds and from new funds that recently raised capital. Two anticipated games — Crypto Unicorns and Summoners Arena — were released, but they haven’t gained major traction yet, as it’s still very early.

We dive into these trends and their drivers in more detail below.

Notable Releases

Source: VentureBeat
  • Perhaps the most important release of the month was Crypto Unicorns, which landed on Polygon. Although not all features and game modes are live yet, there is still some fun to be had via land and unicorns in the farming experience. The game looks to evolve into a pretty complex economy over time with significant interdependencies, but for now the gameplay still mostly appeals to early adopters. The 3-month “Summer of Love” promotion should help engagement slowly ramp up, and breeding will make joining more affordable for new players. We’ll look to cover Crypto Unicorns in a future deconstruction.
  • The other highly anticipated release this month was Summoners Arena, an idle RPG that launched on the BNB mainnet. Much like Crypto Unicorns, the game has a large amount of features and content still on the roadmap for the rest of the year. Looking at reviews on Google Play, there seems to be much confusion and issues regarding the game, so it’s hard to say how much traction it will achieve on mobile in its current state. We’ll be keeping watch.

Unique Active Wallets

Source: DappRadar
  • Per DappRadar, blockchain gaming daily unique active wallets (UAWs) decreased 6.6% to 1.14 million month-over-month. To put things in broader context, UAWs have been bouncing consistently between 1.1M and 1.3M since October 2021. The good news is that despite the downfall of the once flagship game Axie Infinity, the general mass of players remains in the space even if just bouncing between games. The bad news is that overall growth has been stalled out for at least six months.
  • We don’t have an overall measure of player churn to know whether players are being replaced consistently, and we also can’t be entirely sure of the proportion of UAWs that represent bots. However, we can still generally conclude that the mass of early adopters remains fairly sticky, but we’re still waiting on new breakout hits to appeal to broader audiences. There are some great looking games coming out over the next year; many appeal to the same narrow crypto-native crowd, but a few others are hoping to achieve broader appeal. There are a few obvious factors holding back growth that still need improvement: easier onboarding, more F2P games, and appealing to new demographics willing to overcome the onboarding difficulties. Of course, waiting for high-quality games to develop, launch, and improve still requires patience.
  • 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 - potentially underestimating actual user activity.

Top Games by Unique Active Wallets

Source: DappRadar
  • Alien Worlds and Splinterlands continue to control the top two slots based on UAWs, as both make small but steady updates. They represent some of the earliest “on-chain” games to get traction, and their dominance underscores the above mentioned lack of fresh blood in the space in terms of players and successful games. The continued ability to stay in the top positions does show, however, that when players don’t have unrealistic expectations for token prices, the games can trudge on with a focus on gameplay. Upland, a property trading game, is also in a similar position and has the benefit of being mobile-native. The stickiness (so far) of Upland is driven by a heavy focus on daily check-ins, as well as negative effects when disengaging over an extended period of time.
  • The new surprise for this month is Mining Network, which jumped straight to 10k UAWs when it released on May 26th. By the 29th, it managed to reach a peak of 108k UAWs. The game itself is primarily about simulating token mining concepts through simulated staking. Being F2P is a big contributor to the uptake; however, despite what looks like rapid traction, there are already many accusations of bots, de-whitelisting from Atomic Hub, and problems with an exploit regarding the free NFTs. We would advise caution for anyone looking to jump into this project.
  • Crazy Defense Heroes managed to jump back into the top 10 because of a new monthly claim window. The normal daily UAWs hover mostly around 10-12k, but they jumped up to a peak of 100k in a single day on May 16th. A similar spike should be expected around mid-June as well. Impressively, new KYC restrictions on claims would suggest that Animoca Brands has managed to convince 100k actual users to complete KYC verification. Combined with other KYC pushes such as the recent Otherdeed sale, the trend towards rewards for completing KYC verification seems to be having some effect.
  • Bomb Crypto and DeFi Kingdoms both dropped out of the top 10 — down to 14th and 16th, respectively, with a 50-60% decrease each. Bomb Crypto is unlikely to meaningfully recover due to what the user base has been calling mismanagement of the game’s economy and marketplace features. Pegaxy, following a typical ponzinomics boom-and-bust cycle, is also back towards the bottom of the top 10 list despite the recent release of its mobile beta. The team is continuing to make tweaks and attempting to reinvigorate interest, but there is no guarantee that interest will meaningfully rebound.
  • Sunflower Land has continued to grow as it expands gameplay features, and, as discussed in last week’s update, it is even running the first ever cross-game + cross-chain event with Millions on Mars. Due to the way the economy rewards aggressive early adopter play over later players, it’s uncertain if the game has long-term potential.
  • Other games to watch out for that are showing some recent growth are Gameta, which uses hypercasual mobile games to transition web2 players to web3, and Era7, a BNB card game scheduled to also release on mobile in Q2. Crypto Unicorns may also see some greater traction as unicorn NFT prices come down over time due to breeding.

Transaction Volume

Source: CryptoSlam
  • Monthly NFT transaction volumes have been volatile for the past year, and May was no exception. The market experienced a light month-over-month correction, mainly because no project was able to follow up the successful sale of Yuga Labs’ Otherdeed in April. Plus, bear market and recessionary realities naturally mean many consumers are cutting back on discretionary spending. Transaction volumes will likely continue fluctuating throughout the rest of the year, depending on the release schedule of bigger games. There is also some potential for game NFTs to steal market share from art NFTs, because they hold more utility and that audience is already crypto-native. Of course, over the longer-term, NFTs will not only continue to grow, but they will likely branch into more standards-based variations beyond ERC-721.
  • Despite gas fees still being a source of friction for Ethereum, it continues to be the primary network for NFTs and will likely stay that way for some time. Gas fees may even see some relief this year if the merge to Eth 2.0 is successful and proof of stake becomes more greatly adopted. Success on the merge would further entrench Ethereum as the backbone of NFTs, especially when paired with impressive Layer 2 solutions like Polygon and Immutable.
  • Solana also continues to hold its own, representing roughly 10% of total NFT sales, especially after the recent OpenSea integration. While it’s uncertain how long StepN, in particular, will continue driving significant volume, there are still other interesting Solana games on the horizon. Barring any major disruptive Solana network issues, we expect the network to continue taking some of the pie from Ethereum.
  • Despite a lot of interest in Polygon, it hasn’t seemed to grab a critical mass of transaction volume yet and some of its bigger releases remain some time off. The network is aggressively ramping up and even came out with an uncapped fund to help take in refugee games from the recent Terra Network implosion. A couple of live but unfinished games like Crypto Unicorns, Phantom Galaxies, and The Sandbox may help grow the network’s share.
  • Ronin continues to only support Axie Infinity. While the Sky Mavis team is pretty focused on beta testing Axie Infinity: Origin, the network will likely see minimal impact on its transaction volumes in the near future. The recent progress with Sky Mavis’ Builders Program may make an eventual dent, but it is primarily intended for minigames (at least so far), so we’re not convinced it’ll take meaningful market share yet.
  • 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.
Source: CryptoSlam

Top Games by NFT Transaction Volume

Source: CryptoSlam
  • The fact that Otherdeed sits at #1 is an artifact of the residual transactions that took place during the first few days of May. Without some new driver of interest in June, the project should drop off.
  • Sorare saw a solid bounce back this month thanks in part to a recent announcement of a partnership with Major League Baseball to support the sport in the near future. The game overall remains strong and, barring any major missteps, will likely remain on the chart for some time, especially as more sports enthusiasts slowly join the crypto world thanks to other announced competing games like NFL Rivals.
  • Axie Infinity of course continued to tumble as it sits in the waiting period for an eventual Origin release. Without major progress towards a release and some indication of what the competitive meta might be, it will continue to drop next month as well.
  • Crabada saw a huge 85% drop that might be tied to the migration over to the swimmers network and not properly accounted for by Cryptoslam data. We will keep an eye on the data, as there still seems to be interest in the game and excitement around the migration.
  • Crypto Unicorns finally made a partial debut, and the chart placement is a combination of Land and Unicorn sales since both are used together. Prices and total supply have prevented much wider adoption and trading, but as breeding ramps up, at least Unicorn trading should as well. Hard to say if it will keep a volume high enough to stay in the top 10 until more significant gameplay is released, but the project seems to be off to a good start with positive reception.
  • Town Star also managed to climb up thanks to Gala Games including it consistently as part of its month-long May Madness promotional event. It most likely won’t retain its place in the top 10, but other future Gala Games releases could see appearances as they roll out throughout the year.
  • Genopets Habitats climbed up thanks to excitement around the slow rollout of the game. Staking for the GENE token was released this month, and hype around the move-to-earn genre thanks to StepN is also bleeding over to competitor Genopets. As the game gets towards a playable state, we expect to see it pop back up in the charts, even if only temporarily.
  • Interest in Virtual Worlds has hit a major downturn lately as the major metaverse plays have yet to hit much traction. The bear market along with the reduced interest saw NFT Worlds, WebbLand and Metroverse City Block take some significant dips. Until excitement about the space heats up again, we expect the genre to see continued downward pressure. If Decentraland or The Sandbox can drive excitement again, it may influence these projects as well.
  • Depending on the success despite high starting prices, Illuvium’s land sale may show up in next month’s chart and is something to watch out for.

Fundraising Events

Source: Various
  • As predicted last month, we saw a swing back to higher funding — approximately $634M in May, up 45% month-over-month. Games in general saw a nice jump in fundraising this month, too. The RPG, simulation, and battle-related genres, in particular, saw a lot of interest due to being good fits for player ownership on top of being popular genres, especially on mobile. Infrastructure and guilds still continue to see interest from investors, as the whole space is far from settled and no winners have been declared.
  • Animoca Brands conducted another big raise that put them up to a $1B valuation, and they also continue to be investors in many of the projects listed this month. Part of the $89M raised is earmarked for further investment in games, and we anticipate Animoca Brands will continue to be a big part of the fundraising landscape for some time.
  • With a16z in particular setting up extremely large funds for both gaming and crypto, we expect to see funds at large continue deploying meaningful capital throughout the year, especially into projects from more experienced game developers and those successfully building prototypes and attracting early adoption over the summer.
  • The bear market may see investment in many tech sectors weakening, but funding into blockchain gaming and web3 in general will continue to see at least moderate interest. There’s too much talent and capital flooding into the space, and the pace of building continues to accelerate.

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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