New report shows blockchain gaming audience is dwindling despite growing investment
According to a recent DappRadar report, the blockchain gaming industry, which has been experiencing significant growth in recent years, has recorded a decline of 8.58% in unique active wallets (UAW) during the first quarter of 2023.
Fewer gamers but more investment in Web3 gaming
The report revealed that the number of UAWs decreased to 791,474, marking the first time in several quarters that the sector has witnessed a drop in its UAWs. Despite this decline, the report also stated that investments in Web3 gaming increased by more than 12%, reaching a total of $739 million.
The drop in UAWs is a notable development that suggests a decrease in the player base for blockchain games. UAWs are an essential metric for tracking in-game purchases and transactions, reflecting players’ engagement level with blockchain games.
The reduction in UAWs was observed across various blockchain gaming platforms, suggesting that the problem is not specific to a particular game or platform but rather a broader trend affecting the entire industry. Interestingly, while the UAWs count decreased in the gaming sector, the count remained constant for NFTs, indicating the prevalence of Web3 gaming.
Polygon assuming leadership
In Q1 2023, Polygon (MATIC) established its position as the leader in the sector, demonstrating a remarkable 29% increase in UAW numbers, soaring to 122,000 compared to the 94,000 recorded in the previous quarter. Conversely, BNB Chain (BNB) experienced the most substantial decline in UAW numbers, plunging by 36% to 87,000 from the 138,000 recorded in Q4 2022.
During Q1 2023, KLAY cemented its position as a solid gaming blockchain by increasing its UAW count to 15,000. Similarly, WAXP, the leading gaming chain, maintained its status despite experiencing a 1.76% drop in UAWs during the same period.
SocialFi and DeFi also negatively affected
According to the DappRadar report, there was a decrease in the UAW count not only in the gaming industry but also in the social and decentralized finance (DeFi) sectors. However, the NFT sphere maintained the same UAW count. These changes resulted in the dominance of Web3 gaming, which increased its share of the UAW count to 45.6% in Q1 2023 from 42.87% in the previous quarter.
In Q1 2023, investments in Web3 gaming surged by 12.95% to reach $739 million, despite the decline in the number of UAWs in the gaming industry. Although this increase is notable, it is still lower than the $1.22 billion invested in Q3 2022.
According to industry experts, various factors could contribute to the decline in unique active wallets (UAWs) in the blockchain gaming sector. The drop could be a result of market saturation, the introduction of new gaming technologies, or other economic factors.