Blockchain gaming enjoyed significant growth in 2020. Notably, last year was major for most categories in the blockchain dApp industry. However, that picture was vivid when it comes to blockchain gaming.
A Year Of Growth
There was growth in 2020. The decentralized finance (DeFi) category was the dominant catalyst for the general crypto market with $15 billion of locked value by the end of last year. In other sectors of the crypto space, growth was sporadic and pushed more by the dynamics of individual products instead of widespread growth across the industry.
Notably, the average total daily active unique wallets spread across all blockchain games tracked by DappRadar in December was 27,765. That number was up 35% compared to an average of 20,585 in January to reach 28,000 DAUWs.
The growth was achieved despite the general decline in activity for Ethereum games from May 2020 onwards. The analysis shows that the decline happened after gas transaction fees became highly expensive as a result of the DeFi boom.
Between January and December, the daily activity across all Ethereum games plunged by 45%. Nonetheless, a review on a per-product basis shows a radically different situation:
- My Crypto Heroes (Ethereum) declined by 97%
- Prospectors (EOS & WAX) declined by 31%
- Crypto Dynasty (EOS) declined by 48%
- Upland (EOS) grew by 516%
- Axie Infinity (Ethereum) grew by 810%
- Splinterlands (Hive) grew by 53%
At some point in 2020, all these were within the most popular games which shows varying and volatile audience engagement.
Last year, EOS dominated the blockchain gaming sector commanding 35% of all daily active unique wallets. Hive sliced some 17% of the market, Ethereum accounted for 14%, Thundercore got 10%, while WAX took 9%.
Dominant Performers
There was diverse audience variation that was experienced by many blockchain games last year. Some of the games performed better than others with their features and events influencing daily activity trends.
The most popular blockchain game of 2020 is Splinterlands. Its main highlight was its decision to switch from the Steem blockchain to operate on its hard forked version Hive.
Audience volatility was experienced in the project’s transition period in late May. However, Splinterlands got into a period of massive growth between early June and mid-August as new players joined the space. Also, the growth was underpinned by older players who got re-engaged by the publicity triggered by the switch.
No single event can be said to have catalyzed the year-long growth of the Upland mobile game.
Its incredible momentum started to accelerate as it began to roll out its marketing campaign and added features like new locations and fiat cash-out features.
The growth that was experienced by the Axie Infinity was linked to external events and forces, mainly the SLP token price that spiked 499% in early July.
Interest in this game surged further from September triggered by the top price paid for its rarest Mystic Axie’s NFTs appreciated from 150 ETH to 300 ETH in just two months. That price increase is likely driven by a growing interest in the game.
But, in these three cases, analysts must be careful not to assume all of such events are directly casual to user growth.
Altering Values
Daily activity did not grow significantly in 2020. However, the situation seemed quite positive with regard to total trading value.
In the case of blockchain gaming, annual growth was recorded at 191% surging from a $59,500 daily average in January to $173,500 by the end of December. It totaled around $54 million.
Nonetheless, all that is put into context considering the USD value of ETH rose by 470% during the time. Therefore, it means that the daily trading volumes decreased when analyzed on an ETH-basis.
This contradictory behavior can be explained to some extent since the cheaper game NFTs are psychologically valued in dollars by the traders. They take that strategy since they are worried about short-term value.
In the meantime, the more expensive NFTs attract high-net-worth cryptocurrency investors. They are priced in Ether since they are perceived to be long-term assets whose value is linked to the wider trends in crypto adoption.
But, the interplay between the two trends is complex with regards to individual games and across the whole industry.
It is also worth noting that there was a major rise in crypto art trading in the second half of 2020. Nevertheless, the trading of various game assets remains the biggest single driver of activity on marketplaces like OpenSea.
In January, there were about 1,050 daily active unique wallets that interacted with the marketplaces on average. By December, the number had soared by 226% to a daily average of about 3,400 with massive growth recorded from October onwards.
On the other hand, value growth for marketplaces in terms of dollars gained 785%, totaling $78 million, which is considerably more than ETH grew. The value grew from a daily average of $48,400 in January to almost $437,000 in December.
This particular activity accelerated in Q3 2020 as profits from DeFi flowed into the industry.
Ethereum Rules
Data analysis shows that Ethereum was the primary trigger of general growth in 2020. All games, blockchains, and marketplaces accounted for $132 million of trading value. Non-Ethereum marketplaces had 4% and non-Ethereum games accounted for 16% while Ethereum games enjoyed 25% as Ethereum-based marketplaces had a 54% share of the trading value.
This displays Ethereum’s dominance as the generator of financial wealth which integrated with its major NFT standard to ensure that value flowed from the token-oriented DeFi dApps into other asset classes.
EOS and Tron now have their local NFT standards. But, they are not quite mature or adequately supported compared to Ethereum’s ERC1155 and ERC721 standards.
WAX blockchain was the only platform that managed to successfully leverage the power of NFTs. It generated almost $6 million of trading but most of the money was from collectibles projects rather than blockchain games.
What Happens Next?
It can be concluded that 2020 was the year when the foundations of blockchain gaming were reinforced. In that context, over $70 million was invested into the firms that operate in this industry. Among them was Dapper Labs that got $11 million to help it launch and populate a new Flow blockchain that eventually raised $68 million. Also, the Sorare fantasy soccer game got $8 million of these investments.
The Sandbox and Axie Infinity also raised $4 million via private and public sales of their games’ tokens. F1 Delta Time and The Sandbox generated around $2million each through direct sales of their game NFTs to users.
Concurrently, peer-to-peer trading thrived within Axie Infinity. It recorded many NFT sales of over $100,000 as the value of its most rare Mystic Axies soared significantly.
Many projects launched their beta programs including Skyweaver, Nine Chronicles, The Sandbox, Soccer Manager Elite, and Blankos Block Party as they get ready for more formal launches in 2021.
Additionally, there has been a widespread migration of Ethereum-based projects including MegaCryptoPolis, Neon District, and Spells of Genesis to use Matic Network. That network is a layer two technology that supports faster and cheap transactions.
It means that the future of blockchain gaming is not yet here but it is steadily approaching.
