Whereas a fledgling business, blockchain gaming has already confronted large challenges—leading to a swath of video games being placed on indefinite pause by their respective builders, whereas others swap chains.
In 2022, a staggering 157 blockchain video games had been “halted” or in any other case stopped growth, whereas one other 43 titles had been halted in 2023, in line with a brand new Game7 report on the state of the Web3 gaming business. Game7 is a decentralized group or DAO targeted on blockchain gaming adoption.
Game7 core contributor George Isichos instructed Decrypt that the blockchain or “Web3” video games that stopped growth this yr struggled to get monetary assist and had been typically titles that had been established earlier than 2021.
Monetary troubles journey up video games
A lot of the blockchain video games that stopped growth or stay assist this yr had been additionally primarily from very small studios, whereas only a few “AA” or “AAA” video games had been shut down. Game7 defines “AA” as a studio with about $10-25 million in funding, and “AAA” studios as these with over $25 million in funding.
Regardless of this, nearly all of Web3 video games are literally nonetheless indie video games, in line with the report, with 42% of Web3 video games labeled as “indie” or developed by people or small groups with none monetary backers or publishers. Some 40% of Web3 video games are “midsize,” which means they’ve secured $10 million or much less in funding. AA video games make up simply 5% of the blockchain gaming ecosystem—and AAA titles even much less, comprising simply 1% of the business.
Extra chains, extra competitors
The variety of whole gaming-focused blockchain networks spiked this yr, going from 37 in 2022 to 53 in 2023. Competitors amongst blockchains vying for recreation builders to make use of their networks has spiked consequently, and is correlated with an increase in builders switching chains this yr.
Whereas most blockchain video games nonetheless use a layer-1 blockchain like Ethereum’s mainnet, many have adopted Ethereum-compatible sidechains or scaling networks as an alternative. About 81% of present blockchain video games use a non gaming-focused layer-1 blockchain, in line with Game7.
The Ethereum Digital Machine (EVM) is overwhelmingly the preferred selection for blockchain video games, with 74% of video games selecting to make use of an EVM community. Solana’s digital machine is available in a distant second, making up about 10% of video games.
So which networks are most blockchain video games utilizing in 2023? Ethereum sidechain Polygon stays the best choice, with Binance’s BNB Chain coming in second. Ethereum’s mainnet is the third hottest. Solana, Immutable, Avalanche, and Arbitrum take the fourth to seventh high spots, respectively.
Video games on the transfer
2023 is poised to be the yr of recreation migrations. In whole, 65 blockchain video games moved networks so this yr, up from 48 video games switching issues up throughout all of 2022. Whereas there are additionally many extra blockchain video games round now than in years previous, the quantity of chain-switching continues to be notable.
This yr, video games migrated to Polygon, Immutable, and Arbitrum within the largest numbers, respectively, per the report. And 60% of video games that left a layer-1 community moved to a layer-2 scaling community.
However switching blockchains is not any small feat. So why are video games migrating?
Indie developer Reinhardt Weyers is the creator of Untitled Platformer, a recreation launched again in 2021 on BNB Chain (previously Binance Sensible Chain, or BSC). Weyers instructed Decrypt by way of e mail that this yr, he determined it was time to maneuver to a gasless chain—one with out transaction charges—and migrated his recreation to SKALE.
Since Untitled Platformer made the swap, Weyers observed that “gamers began actively making an attempt my recreation extra, with some sticking round for fairly some time.”
Earlier this yr, each Mighty Motion Heroes and on-chain recreation Pirate Nation independently moved from Polygon to Arbitrum.
“As extra folks have migrated to Polygon, we simply began to run into scaling points with the Polygon chain,” Pirate Nation developer at Proof of Play, CEO Amitt Mahajan, beforehand instructed Decrypt.
“We had been paying between $3,000 and $4,000 a day on fuel. And so it simply bought untenable. It was stopping us from with the ability to scale the sport,” Mahajan mentioned.
Whereas some builders switched chains for decrease prices, others moved on account of broader market and regulatory issues.
Anito Legends Cofounder and CMO Jayvee Fernandez instructed Decrypt in an e mail that the Philippines-based studio selected to maneuver its first blockchain recreation from BNB Chain (aka BSC) to Polygon due to issues round crypto alternate Binance.
“Basic sentiment round BSC isn’t very favorable of late,” Fernandez instructed Decrypt.
“After launching in 2022, we slowly felt the market uncertainty and anxieties with the entire SBF and CZ fiasco. We additionally noticed Binance being below fireplace in different markets. We felt it was too ‘centralized’ and did not need our recreation’s future to be beholden to such drama,” the CMO shared.
Fernandez added that Polygon was chosen in the end as a result of the staff believes it’s extra decentralized—and noticed a chance to attach with many different Philippines-based video games utilizing the Ethereum sidechain.
Others have created their very own blockchains totally, like Corey Wilto, CEO of Mirai Labs, whose studio created the Pegaxy blockchain recreation.
“For us it got here all the way down to worth seize. Constructing a series got here at a fairly low value ($100K-$200K),” Wilto instructed Decrypt by way of e mail.
“The worth that it brings to the corporate when considered from a VC perspective and even simply monetizing customers by way of swaps, bridging, and different DeFi instruments, it got here as a no brainer as a result of we had the technical functionality internally,” Wilto shared.
Edited by Andrew Hayward
