Web3 Game Report March 2024: Market Trends and Investment Dynamics

Author: [email protected]

Data source: Footprint Analytics GameFi Research

In March 2024, Bitcoin continued to set new records and successfully crossed the mid-month low. Benefiting from the positive macroeconomic situation, the entire cryptocurrency market performed outstandingly. At the same time, the convening of the 2024 Game Developers Conference (GDC 2024) has become another important driving force for the development of the blockchain game industry, helping the market value of blockchain game tokens increase by 24.1% and the number of daily active users increase by 17.5%. Game industry giants and public chains are investing in cultivating the Web3 game ecosystem. Let us pay attention to how these initiatives will be implemented and what results they will bring.

The data in this report comes from the Web3 game research page of Footprint Analytics. This is an easy-to-use dashboard that contains the most important statistics and indicators for understanding the Web3 gaming industry, updated in real time.

Market Review of the Month

In March, Bitcoin experienced significant ups and downs between "breakouts" and "volatility". Starting the month at $61,213, it quickly broke through the previous high of $69,000 and hit a record high of $73,068 on March 14. Although it fell back 15.1% to $62,047 in the middle of the month, it recovered the lost ground at the end of the month and finally closed at $69,656, an increase of 13.8% for the whole month. In contrast, Ethereum's gains were relatively steady, starting at $3,344 and closing at $3,648, an increase of 9.1%.

Data source: Bitcoin and Ethereum price trends - Footprint Analytics

The cryptocurrency market performed strongly in March, mainly due to market expectations of lower interest rates despite a strong overall economic performance. This outlook has heightened inflation concerns, making assets such as Bitcoin and gold more attractive. Bitcoin's price movements are closely related to the performance of US Bitcoin spot ETFs. The mid-month price decline was mainly affected by the slowdown in Bitcoin spot ETF fund inflows and traditional traders reducing leverage. However, the market's expectations for the Bitcoin halving event in April have maintained its upward momentum.

Although Ethereum's gains are slightly lower than Bitcoin, it has maintained steady growth, partly because the prospects for the approval of US spot ETFs seem unclear. The major Ethereum network upgrade (Dencun Upgrade) on March 13 aims to reduce Ethereum's transaction costs, which in turn promotes activities within its ecosystem.

In March, the AI ​​industry became the focus of the market. Nvidia released the Blackwell GPU and GB200 super chip at the AI ​​event GTC 2024, which not only ignited the enthusiasm of the US and global stock markets, but also attracted widespread attention in the cryptocurrency market, driving the rise of the crypto AI sector.

Blockchain Game Market Overview

This month, the market value of blockchain game tokens increased by 24.1% to US$24.1 billion. This growth is not only due to the prosperity of the cryptocurrency market, but also due to the promotion of the 2024 Game Developers Conference (GDC 2024). The conference further stimulated the activity of Web3 game developers and significantly increased the market's attention to game tokens.

Game Developers Conference (GDC)

Under the combined influence of market dynamics and major industry events, the average number of daily active users (wallets) continued to grow in March, reaching 2.7 million, an increase of 17.5% from February.

Data Source: Blockchain Game Daily Active Users - Footprint Analytics

However, although transaction volumes have recovered since the third quarter of 2023, they have not yet returned to the peak level of the second quarter of 2022.

Data source: Blockchain game quarterly transaction volume - Footprint Analytics

Blockchain game public chain data

In March, the game player rankings showed that Ronin, Polygon and BNB chain were the platforms with the largest number of active players, accounting for 35.4%, 20.9% and 10.8% of the market share respectively. It is worth mentioning that Ronin and Polygon further consolidated their leading positions, with their market shares increasing by 6.3% and 7.8% respectively compared to February.

Data source: Percentage of active gamers - Footprint Analytics

In terms of transaction volume ranking, Ethereum, Ronin, and BNB chain dominate. In March, Ronin's transaction volume reached 81.7 million US dollars, a month-on-month increase of 35.1%, while BNB chain saw a 13% decline. With less than 10 games, Ronin's market share expansion momentum is strong. As Ronin continues to add new games, its growth potential is expected to increase further.

Data source: Ronin Popular Games - Footprint Analytics

Competition in the public chain field is becoming increasingly fierce, and major public chains have increased their investment and are committed to promoting the prosperity of the Web3 game ecosystem.

The Arbitrum Foundation announced a proposal to distribute 200 million $ARB tokens over two years to support game projects on its blockchain. Among them, 160 million $ARB will be allocated to game publishers and developers, while the remaining funds are planned to be used to improve infrastructure. This proposal needs to be approved by the Arbitrum DAO.

At the same time, the Starknet Foundation is also taking active action and has established a dedicated game committee to promote the development of the Starknet game ecosystem. The committee plans to distribute 50 million $STRK tokens to support gaming projects recognized by the committee, especially those that can incentivize game development and player participation.

In addition, Immutable, King River Capital and Polygon Labs have also jointly launched a $100 million "Inevitable Games Fund". This fund will combine the three parties' expertise in the gaming and blockchain fields to find and invest in promising game studios and Web3 infrastructure.

Blockchain Game Overview

In March, the number of active blockchain games remained stable at 2,879, and the market did not see significant fluctuations. However, the industry generally expects major breakthroughs to significantly increase user engagement.

Data source: Monthly active blockchain games - Footprint Analytics

Against this backdrop, a question arises: Will Notcoin, the hottest game of the month, become the game changer the market is looking forward to? This simple click game, based on the Telegram messaging app, has attracted more than 35 million players in just a few months. Players can earn game coins by simply interacting with the Notcoin bot through Telegram, inviting friends and starting the game. However, what motivates 35 million users to invest in this seemingly simple "click on the screen to get game coins" game? The answer lies in the upcoming airdrop event. Notcoin announced that it will use The Open Network (TON) in April to migrate its huge game coins to the blockchain, a move that has attracted great attention from the market. But this raises another question: If only the game currency is on the chain, and other game elements such as game mechanics, equipment, and data are not on the chain, can a game be called a "blockchain game"?

At the same time, several games and platforms have emerged in March. Among them, Gala Games' token $GALA rose by as much as 69.6%. Gala is committed to building a large AAA gaming platform that aims to give players unprecedented freedom, control and generous rewards.

On the other hand, Illuvium, an open-world fantasy combat game based on Ethereum, has also made considerable progress and successfully completed a $12 million Series A financing. Positioned as the first AAA game on Ethereum, Illuvium stands out with its full 3D environment, which is in stark contrast to other blockchain games. In March, the value of its $ILV token rose by 18.2%.

Illuvium

Blockchain game investment and financing

The game industry ushered in an investment boom, raising a total of US$151 million, an increase of 80.6% month-on-month, involving 26 rounds of financing. This significant growth highlights the continued favor and high attention of capital to the industry.

Investment and financing events in the blockchain game field in March 2024 (data source: crypto-fundraising.info)

As the infrastructure of the industry, the public chain is actively consolidating its position and promoting ecological expansion by investing in game projects. Among them, Solana has performed particularly well. Its Solana Ventures invested in Parallel, and the Solana Foundation invested in Elixir Games. Parallel became the largest project in terms of financing scale that month with a financing amount of up to US$35 million.

At the same time, Avalanche has also made significant progress. The Avalanche Foundation strongly supports two projects: BloodLoop and Crystals of Naramunz. In addition, Avalanche Ecosystem Fund Blizzard Fund provided financial support to Gunzilla Games, making the latter the second with a financing amount of US$30 million in March.

Gaming giant Square Enix not only develops its own blockchain products, but also invests in potential Web3 projects. In March, Square Enix injected funds into gaming platforms Elixir Games and HyperPlay, and plans to introduce its game Symbiogenesis to the HyperPlay platform.

Traditional crypto funds are also active. a16z Crypto has supported MyPrize and MadWorld, while Animoca Brands has supported Illuvium, MetaCene and gaming infrastructure Param Labs.