Top News

#1: Virtual Land Volumes Are Holding Steady

Source: WeMeta

Even as individual NFTs and blockchain-based games continue to swing up and down in value, land and property in virtual worlds, most prominently Decentraland and The Sandbox, have shown persistence in sales. While floor prices have fallen back in the recent bear market, digital land continues trading around fairly sustainable volumes. In fact, and as seen in the chart above, land sales — driven by The Sandbox (in blue) — have mostly recovered from the lows of last week. Of course, it’ll continue to ebb and flow, but The Sandbox, in particular, is experiencing continued interest from land developers, creators, and brands. The Sandbox just released a new batch of land, but eventually land sales are likely to slow down and the emphasis must turn away from financial speculation and to user engagement.

Other game developers are also entering the blockchain-based virtual worlds space — with Square Enix most recently bringing its Dungeon Siege IP to The Sandbox. Virtual worlds can also become hosts to P2E games within them such as with Decentraland and ICE Poker (100k MAU, 6k DAU). The volatility will continue to rage on, but we’re interested to watch how these various virtual worlds projects find user traction over the coming months and years, which will eventually be the #1 determinant of price in the long-run.

#2: The Russia-Ukraine Conflict Begins Impacting Games

Source: The Limited Times

Amid the outburst of support for Ukraine across the world, Ukraine’s Vice Prime Minister Mykhalio Fedorov put out an open letter asking game companies to halt operations in Russia. Some studios are going further and actually sending funds to Ukraine. This has also led to tricky situations, such as with Lost Ark, whose Russian server is Russian run. Plus, several crypto exchanges are refusing the call to deny Russian users because it goes against their core beliefs around what censorship resistant money should enable.

Of course, there’s a difference between censorship resistant money and blockchain games, especially in times of war with rising economic sanctions. Notably, industry leader Animoca Brands decided to cut off Russian users. Even more importantly, many Ukrainian game studios and teams — blockchain and otherwise —  are also being negatively affected. Now is a time for these teams to prioritize safety, but we could see further challenges, sanctions, and delays emerge as war rages on. It should also be a wake-up call for those who view all of these games and teams as truly decentralized — they’re not.

Related, there are already some indications of heavy crypto purchasing from Russia, but it’s difficult to estimate what kind of outflow may go to blockchain games in an effort to better obfuscate dodging sanctions. Over the coming days and weeks we’ll see if other crypto gaming companies follow in Animoca Brands’ footsteps or not.

Game Announcements

Source: The Sandbox
  • On March 3rd, The Sandbox opened back up for its second alpha season along with a new land sale and changes to how its alpha pass works. Expect lots of new experiences, which will also be accessible to everyone for free. Link
  • Axie Infinity announced a 1% increase in marketplace transaction fees, which will go to content creators. It hasn’t gone over very well in the community so far. Link
  • Upland, a long-running mobile NFT game, is introducing player-owned shops called Metaventures. This will provide players an opportunity to acquire unique NFTs in addition to trading land. Link
  • Coda, a mobile game publishing platform, launched a new mobile casual/hypercasual developer ecosystem called Infinite Arcade. It begins with 10 games — with a goal of 200 by the end of 2022 — and the marketplace and tokens will launch later this month. Link

Funding Announcements

Source: Netmarble
  • Netmarble’s anticipated big entry into mobile NFT gaming, Golden Bros, sold out it’s pre-sale units in under a minute. Unfortunately, this was followed by a flood of fake NFTs for sale on OpenSea. Link
  • Hiro Capital launched a new $340 million fund for backing early-stage games and metaverse innovators. Link
  • Hack VC unveiled a new $200 million seed fund to invest in early-stage startups in crypto, blockchain, and Web3. The new fund is backed by Sequoia Capital, Fidelity, and a16z’s Marc Andreessen and Chris Dixon. Link
  • The developers of soon-to-release P2E game Idle StoneAge secured a $25 million seed round led by KuCoin Ventures. The game will be deployed on KuCoin’s Community Chain. Link
  • WorldSpark, developers of Edenbrawl, an upcoming MOBA brawler blockchain game, raised $3 million in seed funding led by Animoca Brands and Shima Capital. Link
  • The Arca NFT Fund acquired two Axie Genesis Land plots for 210 ETH. Keep in mind, land utility has yet to be released and was recently delayed. Link
  • Turnt Gaming raised $4.3 million to accelerate the development of Taunt Battleworld, a skill-based fight game. Link
  • Cosmic Guild raised $3 million, led by Link

Ecosystem Updates

  • IndiGG announced new partnerships with FTX and Sipheria to continue growing P2E gaming in India. While the Philippines were the original P2E success story, India may just be getting started.
  • The next big push to scale Ethereum Layer 2’s are ZK Rollups, and The Matter Labs team announced that its EVM-compatible zkSync 2.0 has launched on testnet. If successful it will be competing with Polygon’s as yet unreleased ZK chains. Link
  • Layer 2 networks in general are starting to gain market share, as seen by Ethereum usage showing some dips. The much anticipated Ethereum 2.0 doesn’t have a specific release date, and Layer 2 networks are meeting NFT-driven demand head on. Link
  • In addition to growing Layer 2 networks, alternative sidechains like Avalanche and Flow are also seeing market share gains. Link
  • Yield Guild Games has been making long-term plans and adjustments to deal with downturns in some of its investments like Axie Infinity. The guild has made a diverse array of investments, but many projects it’s involved in haven’t launched or are still tiny. Link

Notable Market Moves

Top 10 gaming tokens by market capitalisation
  • The overall market mostly bounced back from the dip we saw last week. These movements continue to follow the general trend of Bitcoin and Ethereum (up 11.79% and 10.14% in the week, respectively) although with less dramatic swings. Prices overall are still lower than 90 days ago, but higher than 1 year ago. Again, don’t overthink short-term volatility, which is inevitable for any early stage market. As we said last week and will continue to repeat, there are a number of high quality blockchain game projects with delivery roadmaps for this year and next, which will drive long-term growth.
  • The largest move this week in the largest gaming tokens came from Ultra, a game publishing platform and ecosystem. Ultra saw its price jump 19.72% this week with no changes in circulating supply, moving it from 10th to overtake Illuvium for 9th. This increase was on the backs of a recent announcement of a new game coming to the platform, Cross the Ages, and hype from social media that the token is currently undervalued.
  • Notable upcoming events for top 10 tokens:
    • The Sandbox just started its second alpha season which will run until the end of March.
    • Axie Infinity releases an alpha of the large Origin update later this month. 
    • Illuvium has a private beta slotted for Q1 with a public beta in Q2. 
    • Gala is making progress on its blockchain as mentioned in the last update.
    • WAX will be introducing EVM compatibility, but no release date is given.

Content Worth Consuming

  • Thetan Arena – The Mobile Game that Combines F2P and P2E (Deconstructor of Fun): “Though an interesting experiment, and one that has certainly turned a F2P underperformer into a meaningful P2E revenue generator for WolfFun, Thetan Arena is a great case to learn from but not a fully realized template for how gamedevs can reinvent their mobile underperformers as crypto game hits.” Link
  • Gabe Newell talks Steam Deck, crypto risks and why the PC industry “won’t tolerate” closed platforms (Rock Paper Shotgun): “The notion of digital ownership, and shared universes, are all pretty reasonable. The people in the space, though, tend to be involved in a lot of criminal activity and a lot of sketchy behaviours. So it’s much more about the actors than it is about the underlying technology, or the rationale for what we’re doing. There was the issue of volatility: you don’t want your pricing to vary when anchored to people’s wages. So if you think of ‘how much I make,’ right? It happens to be denominated in things like euros or dollars or whatever. They don’t want to find out that there’s tremendous volatility when they’re actually purchasing things day to day. Like, ‘why did I spend $497 one day to buy a game, and the next day I spent 47 cents, what’s going on here?’” Link
  • Why gamers shouldn’t hate NFTs (Bankless): “Blockchain games promise to unlock all of these earning potentials, and more. Critics of play-to-earn worry that the monetization model threatens to strip the ‘fun’ out of games but these arguments greatly miss the point. Play-to-earn empowers players with a welfare-enhancing alternative than the options currently available to them. That is much better than doing nothing.” Link
  • What’s real about crypto gaming with Ryan Wyatt (Bankless Podcast): “Ryan Wyatt is the CEO of Polygon Studios and former Head of Gaming at Youtube. Ryan is always on the frontier of gaming, having stewarded a new generation of content creators. He’s now shifting his focus to Web3, where the next wave of innovation is set to happen. Ryan presents a number of fascinating takes, including his feelings on Anti-NFT sentiment, the future of games, and the growing influence of gaming content. By building out the Polygon Metaverse, Ryan is colliding games and economies. In this episode, he shares what he’s learned — what’s real about crypto, and what’s not.” Link
  • Yat Siu Founder of Animoca Brands (The FTX Podcast): “Yat Siu is a Hong Kong based entrepreneur and angel investor who was born and raised in Vienna, Austria. At a very young age Yat Siu worked for Atari in Germany. Fast forward – Yat Siu is CEO & Founder of the game-company Outblaze & co-founder of Animoca Brands.”Link