In October, the blockchain gaming landscape was short of big changes but still experienced a few smaller movements and shakeups. Ongoing game and infrastructure development — with steady improvements and a growing number of alphas — is a good sign, but it hasn’t yet led to major breakthroughs. Some metrics, like Unique Active Wallets (UAWs), remained relatively stable, but it appears that the same players are shuffling between games more so than new players joining the ecosystem at a notable scale. As a result, the top-ranking titles have remained generally the same, but transaction volumes continued showing weakness, and the top L1s and L2s continue competing heavily for market share.
Stagnation is never exciting, but the silver lining is that despite the bear market, players are still interested enough to wait for the next hit and not leave the ecosystem entirely. Of course, it won’t be until next year (at the earliest) that we see much higher-quality games which could really move the needle. It’s also worth noting that fundraising, which is always volatile (and leaning more towards infrastructure/services recently), has taken a step back for blockchain games (and web3 in general; fiascos like the FTX fallout certainly don’t help). However, funding is clearly still going, and it could always roar back once hit games start making traction.
Last month, Apple dropped the bombshell of NFT restrictions on its App Store, and we haven’t yet seen the repercussions of this. The language given is extremely restrictive, and taken at face value, it could handicap growth in the short-term. October also saw marketplaces starting to offer zero royalty fees as a way to compete for users via lowered prices. The lack of reliable transaction royalties and Apple’s new restrictions may lead to major business model changes around secondary markets and slow down game releases as teams consider pivoting. There is also uncertainty around regulation, as October saw the SEC probe into Yuga Labs (discussing whether to regulate NFTs as securities), and the FTX drama in early-November only adds fuel to the regulatory fire. All of this uncertainty is likely to impact the next few months as both game developers and investors seek out greater clarity.
With that, let’s dive into the highlights of October, including notable releases, daily active wallet trends, transaction trends, and fundraising news…
Notable Releases
- Gala Games has been working to build up its stack of fully playable blockchain games, and Spider Tanks is the latest addition released at the tail end of October. As the most noteworthy launch of the month, it is very action-driven and feels like a fun-first game, which should help remove any stigma around web3 games if it manages to achieve traction with a larger audience. The game is F2P but with NFT add-ons and token-earning capabilities, so it’s worth a try.
- A considerable number of playable alphas and closed betas were released in October, but they were primarily targeting existing NFT holders. While it may not be possible to try them all, videos and reviews online can give a good indication of future releases worth keeping an eye on. Here are a few of the notable games with alphas or demos from October:
- Grit (on Epic Games Store)
- MetalCore
- Chainmonsters
- Carrom Blitz
- STG Football
- Axie Infinity: Raylights
- Champions: Ascension
- Cross the Ages
Unique Active Wallets
- Per DappRadar, blockchain gaming daily unique active wallets (UAWs) fell 6.2% in October (a decrease of ~54K). With most games still only hitting alpha status for NFT holders, it’s likely that some players (and perhaps even bots) have lost interest in the current crop of titles. A big contributor to this drop may have been Gameta’s removal from DappRadar for unknown reasons. Considering last month Gameta accounted for nearly 2M UAWs, then October’s actual drop is likely slightly less than 6%.
- While many top blockchain games saw declines in UAWs, there were a few that saw growth, such as Trickshot Blitz and Planet IX (more on these below). Games like Alien Worlds, Splinterlands, and Upland continue updating enough to hold some portion of their audiences, but they still feel like early web3 prototypes and will likely eventually be replaced by more modern games (or just slowly bleed players).
- 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. Bots are also common across many games due to their ability to earn and will also show up in UAW numbers.
Top Games by Unique Active Wallets
- Like we mentioned above, the biggest change this month is that Gameta fell off the top 10 list because it was removed from DappRadar. Unfortunately, DappRadar rarely comments on wallet or game changes, so there is no way to know what the reason was. That said, according to our alternative data digging, Dune charts show that Gameta would still likely be topping the UAW rankings given its continued growth on the BNB Smart Chain (BSC).
- Alien Worlds made some interesting updates in October via its Planetary Syndicates in-game DAO system, but these efforts clearly weren’t enough to fully maintain or grow its playerbase. The game has been able to hold a somewhat stable (likely quite bot-heavy) playerbase, but it isn’t the type of game that will forever be at the top of this list.
- While Splinterlands is now down to 4th place, it actually saw the least change in UAWs in October (down 1%). The game is managing to hold its playerbase steady ever since it fell significantly in June, but the lack of growth is still unfortunate. The Splinterlands team has been pumping out a bunch of new content and projects such as the Riftwatchers expansion, reward changes, a tower defense game, Runi PFP cards, and an entirely new sports game ecosystem. It will take a while before the tower defense game and Genesis League Sports launch, so it remains to be seen how much these new efforts will actually catalyze growth.
- Trickshot Blitz (a hypercasual game) pulled a real trick-shot this month, switching places with Solitaire Blitz (another hypercasual game from the same team) and driving a massive 155% UAW increase. The increase came at the start of October and remained mostly steady throughout the month thanks to an internal shift in marketing budget away from Solitaire Blitz and toward Trickshot Blitz. Unsurprisingly, Solitaire Blitz saw a large 74% decline in UAWs as a result, which shows weak retention but perhaps indicates that players simply migrated over to Trickshot Blitz. It’s difficult to know for sure.
- Benji Bananas also remained stable, which in some ways isn’t surprising given the UAWs here are players who own the NFT required to earn. These players are likely going to continue to try and earn returns as long as $PRIMATE remains profitable. So far, the price of the token has been relatively stable, so the game will probably retain its steady position on November’s chart. Of course, it’s an extremely simplistic casual game with slim chances of staying on the charts once better games launch, and playing in order to earn is mostly a figment of the past.
- Axie Infinity: Origin continues to suffer from player bleed as it condenses to a base of mostly diehard fans and competitive players. No major game changes have been announced, and any other Axie ecosystem games are more likely to simply help with the retention of existing users. The game itself has continued to see balance changes and updates, but most of the players who played to earn are probably giving up (if they haven’t already). It’s possible that Sky Mavis may be waiting until the game is in good competitive shape before pushing for heavier user acquisition. Of course, like in many other titles, part of Origin’s game elements are not on-chain transactions, which means the UAW metric undercounts the total userbase; it’s more of an indicator of market interest than a perfect reflection of total engagement. We’re still curious where it goes, especially if/when the game launches on mobile.
- Planet IX, a strategy game based around ownership of small territories mapped onto the real world (somewhat similar to Upland), saw a massive 246% jump in UAWs that started in mid-October. The timing and subsequent dip later in the month correspond to the release of a new staking program which was most likely what drove the higher than usual activity. With lack of significant gameplay, it makes sense that staking would be a big draw for NFT owners. All that said, unless November seeds a big new feature or something to draw in players, Planet IX will probably drop off the charts.
Transaction Volume
- Total NFT secondary market transaction volumes saw a 9.3% dip in October — a decelerating decline compared to the 30.2% decline in September, but obviously it’s still moving in the wrong direction. While there were certainly some hot projects in October, there wasn’t anything at the scale of Otherdeed or even the initial Digidaigaku release to drive outsized trading. There are definitely still some FOMO moments, but there does seem to be a strong core interest in NFTs that isn’t completely speculative and has more to do with utility. Granted, it’s hard to say when the bottom will be, as it’s completely dependent on upcoming projects that could still lead to volatile months.
- Although not likely as a direct result of The Merge, Ethereum did rebound slightly from September’s drop in market share. According to the chart below, it appears that Ethereum mainly stole market share from Solana, which experienced the biggest drop in volume for October — going from $126M to $67M. Overall appeal of Solana may also be lessening as Polygon and Immutable, leading L2s for Ethereum, effectively compete to win over companies inside and outside of gaming. (The more recent FTX blow-up and its connection to Solana doesn’t help either.)
- While Polygon saw only a small increase in overall share, it did experience a pretty good jump, going from $3.8M to $13M. Polygon Studios has been spending a lot of time and investment lately, partnering with and supporting developers to help grow its chain. Unlike Ethereum, Polygon actually has marketing and business development people to expand its market share. More and more users and projects are getting comfortable with the chain and are using it in tandem with Ethereum, so we expect continued growth despite short-term ups and downs. The testing of its ZK-Rollup network may also lead to good gains down the road.
- Flow suffered the same fate as Solana, going from $19M to $10M in transaction volumes. Unfortunately, the “successful” Blitz series of games may lead to a lot of token transactions but not NFT ones. This puts most of the weight still on the NBA Top Shot, NFL All Day, and UFC Strike series, which aren’t all growing. Additionally, smaller NFT-driven games like Dimension X can do fairly well at the lower scale they’re built for, but they don’t impact the overall numbers very much. The Flow blockchain is still young, and we hope to see some third-party NFT successes offset the dependency on the aforementioned Dapper Labs projects.
- Immutable has been showing significant strength lately, with volumes of $23M in October compared to $14M in September. Being a gas-free transaction network for NFTs (unlike Polygon) definitely gives Immutable advantages in trade volume, especially when onboarding big names like GameStop (which officially went live with its game NFT marketplace). It’s also worth crediting the game that led to the blockchain’s creation, Gods Unchained, for making a notable turnaround lately and taking up a significant portion of trading volume. Given the growing number of games planning on using Immutable — not to mention several projects brought over from Luna and poached from Polygon — we expect to see continued growth.
- Sky Mavis’ Ronin, with only $0.14M in secondary NFT transaction volumes for October, continues to trade at volumes below even small networks like Palm ($0.81M) and (almost) Cronos ($0.12M). There is potential for a volume increase from other third-party Axie ecosystem games, but it’s unlikely to be significant. This is a drastic fall for a network that posted $5M in monthly trading volume as recently as July. While we would love to see Sky Mavis succeed, there doesn’t seem to be a lot of reasons to be bullish on Ronin in the near-term.
- WAX is another blockchain that hasn’t shown much in the way of gains for some time. While the $2.18M in transaction volumes for October is slightly better than July and August, it’s a step back from September. Farmers World and Alien Worlds continue to be the two leading games on the chain despite big pushes like Blockchain Brawlers. In general, WAX is beginning to look like an antiquated version of Immutable, and without significant pushes, it might slowly fade out.
- 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.
Top Games by NFT Transaction Volume
- Sorare’s NBA game launch led to a 25% increase in the title’s overall transaction volumes, making up for last month’s dip. Despite the simplicity of Sorare as a platform, its model has proven to be robust and sustainable over time. Much like annual franchise sports video games, fantasy sports titles experience the cyclical nature of real-world sports; however, now with three top-tier sports (football/soccer, baseball, and basketball), it should have more year-round appeal. We expect that unless overtaken by a stealthy competitor, it’s likely to remain the king of blockchain-based fantasy sports for some time.
- Gods Unchained, one of the elder NFT games, continued its major turnaround with huge transaction volume growth. Being gas-free (unlike the other games on the list) obviously helps, but credit is due to Immutable for both putting out limited-time content and driving increased play through earning incentives and improved retention methods. It’s unclear if the game will be able to greatly expand its playerbase, but it is definitely improving market activity. One wildcard is the game’s long-delayed mobile version that could provide a good boost given it doesn’t violate Apple’s new NFT rules — something that competitor Skyweaver may already have to contend with.
- Otherdeed continued its decline, which comes as no surprise with the lack of overall activity in its ecosystem, likely leading to “weaker hands” cashing out. Transaction volume is expected to spike once actual utility or activities for holders are announced, but until then it’s going to continue sliding.
- DigiDaigaku is also having some difficulty maintaining its initial hype. There is only limited utility at the moment, but more NFT forms are probably going to be announced. We expect that as the game reveals itself, transaction volumes will somewhat rebound, especially in the lead-up to the already hyped Super Bowl ad. This is a project worth keeping an eye on due to its much vaunted “factory NFT” and “free to own” models that encourage secondary market transactions over primary sales.
- R Planet made a good splash on October 25th (coming in at #6 for the month), but it quickly died down after, so we don’t expect to see it return next month, barring any surprises. Similarly, Apeiron made a big jump (to #7) driven by the launch of its new Star NFTs, but activity died down immediately after. It’s also unlikely to show up next month.
- Wolf Game maintained more or less the same volume as September amidst its V2 push. The game made a good impression on release and hopes to continue sparking interest. Players’ interest is still mostly focused on land, which may diminish in the short-term. We’re skeptical overall.
- The Sandbox made a surprise comeback with a huge amount of trade volume surrounding the end of alpha season 3 activities, which drove meaningful transactions and player engagement. Of course, with the season now complete and no details around a season 4 or further updates, transaction activity is likely to drop back down. There is also the lingering question of when the alpha phase will end and the platform will be considered “released.” Note: Decentraland, unfortunately, still doesn’t seem to be registering on Cryptoslam, so it doesn’t show up here.
Fundraising Events
- October repeated September‘s trend of declining venture funding — falling 18% month-over-month (at least based on the deals we saw). The number of raises increased over last month’s, driven by more seed-level rounds, and there were more Series A/B funding rounds. On the other hand, the largest funding was “only” $165M, less than the $200-300M+ raises we’ve seen recently.
- Uniswap Labs drove the largest raise this month, raising $165M for its Series B, but it’s also the least interesting in terms of games-related funding.
- Homa also completed a sizable $100M raise for its data-driven mobile gaming tools. There are big questions about the role of blockchains and crypto in mobile markets these days, namely because of Apple’s policies, but these tools could still be really important if it does turn into a growth market. In general, there is definitely a need for more game-native tools, so this should be a positive for developers in the space.
- Wallets saw quite a bit of heat this month. Both Braavos and Zerion raised double-digit millions for wallet solutions, but the one to keep your eyes on is Horizon, which (despite also being a game studio) raised $40M largely to reinvest into its Sequence wallet solution. Notwithstanding the occasional lack of attention on the project, Sequence has been usable on mobile for quite some time and well integrated into Skyweaver (Horizon’s game). The big growth opportunity is in expanding Sequence to other games, which was an announcement that accompanied the fundraise. Horizon will also use part of the funding for its newly released Niftyswap semi-fungible marketplace.
- As is to be expected at this point in time, several of this month’s raises above $10M went towards infrastructure and services. In the eyes of many VCs, what success looks like for games is still unclear, and infrastructure (the picks and shovels) is often deemed a safer bet. Of course, there were still quite a few game projects that received funding, but the amounts were almost negligible in comparison. This trend may continue until there’s more clarity around which gaming models are bound to be successful.
- A fair amount of fund capital still needs to be deployed (and new funds are raising), so it’s unlikely that future months will dip far lower. Of course, in a deflating or extended crypto winter situation, web3 funding in general may take more of a backseat, which could affect the blockchain gaming market too. We continue to look long-term, however; ultimately, the trajectory of the industry will be determined by both the ability of everyone to reset their priorities (to what is fun, sustainable, and high quality) as well as the success of the next wave of web3 games. We’re keeping an eye on the next breakout game(s) that might re-spark interest and heat funding up again.
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.
