Game7, a prominent booster organization focused on Web3 gaming, has recently unveiled a detailed report on the current landscape of Web3 gaming. The report, which scrutinizes 1,900 blockchain games and a thousand funding rounds from 2018 to October 2023, offers invaluable insights into fundraising trends, competitive dynamics, and the evolution of blockchain networks in gaming.
Table of Contents
Web3 gaming growth
According to the report, a staggering $19 billion has been invested in Web3 gaming-related projects since 2018. The year 2022 alone saw nearly half of this investment, marking a significant peak in the sector’s growth. Interestingly, while 2021 witnessed an $8 billion investment in this domain, the figure notably dropped to $1.5 billion in 2023.
Despite the substantial investments, Web3 gaming remains a volatile sector. The report highlights that while 811 Web3 games were launched in 2022, 14 were canceled. The subsequent year saw a decline in new games launched, with an increase in cancellations. This year, 223 games have been launched, but 43 faced cancellation.
Game7’s report underscores a growing trend in the number of networks targeting Web3 games. A remarkable increase from seven networks in 2021 to 53 in 2023 indicates a dynamic expansion in this domain. Furthermore, more than 81 new blockchain networks targeting gaming were announced in 2023 alone, reflecting a 40% growth year-on-year.
“The Web3 gaming market continues to grow, albeit slower after the 2022 market correction,”Game7 Report
In 2023, blockchain gaming-related funding rounds reached $1.5B, with over $800M exclusively dedicated to Web3 gaming.
Strong presence in the Asian market
Regionally, the Asia-Pacific region leads in Web3 game development, hosting 40% of game developers. This is followed by North America, EMEA, and Latin America. Notably, South Korea has almost doubled its contribution to Web3 gaming teams this year.
The report also sheds light on the funding patterns in Web3 gaming. Average funding rounds for game content projects have decreased over the years, with a notable drop in gaming infrastructure funding in 2023.
In terms of genres, sports, MMOs, RPGs, and action games are leading in investment. However, RPGs dominate the number of games developed. The distribution of games across platforms is relatively balanced, with a significant portion being launched across multiple platforms.
Web3 gaming is predominantly characterized by lower production budgets compared to mainstream development. Indie games and mid-tier productions constitute a major part of the sector.
The report reveals that four out of five Web3 games use general-use Layer 1 networks, such as Ethereum and Polygon. However, there is a growing trend towards Layer 2 and Layer 3 solutions, as well as application-specific networks.
Finally, the report categorizes the majority of Web3 games as those with on-chain assets, followed by hybrid on-chain games and fully on-chain games. This categorization reflects the evolving nature of blockchain integration in gaming.
Game7 report: Closing thoughts
GameFi tokens have recently experienced a significant rally that has captured the attention of investors and analysts alike.
Data sourced from CoinGecko indicates a bullish trend in the GameFi sector. Notably, half of the top ten GameFi projects have recorded over 10% growth in the past week. Among them, Immutable (IMX) has witnessed a remarkable 35% rally after its partnership announcement with Ubisoft, while Illuvium (ILV) enjoyed gains of 27% in the wake of its release on the Epic Games Store.
Despite the growth, Web3 games face challenges in mainstream distribution. Most games rely on direct distribution or Web2 and Web3 platforms. The Epic Game Store’s listing of Web3 games, however, marks a significant development in this aspect.
As the sector continues to evolve, Game7’s report serves as a valuable resource for understanding the complex dynamics of Web3 gaming.