Report #5: BGA Games and DappRadar Shows Blockchain Gaming Is Bucking the Bear Market

Amid a brutal bear market, blockchain games are the vertical maintaining pace with the rest of the industry. Illuvium’s Galaverse and new move-to-earn ventures keep interest in this vertical alive.

The crypto market’s protracted bear season is affecting the dapp business, which is having its own difficulties. For the first time since 2020, the crypto market cap has dropped below $1 trillion. According to CoinMarketCap, the number of daily unique active wallets (UAW) in the dapp market plummeted to its lowest level since September last year.

In May, despite the weak market, 1.15 million UAW played blockchain games on average daily, a 5% drop from April. Blockchain games have shown that they can withstand the bear market more than any other blockchain sector. There have been a lot of exciting things happening in the dapp market recently, and this article will go through the most significant ones.

The Most Important Takeaways

• With 350,000 daily UAW in May, Splinterlands retains its status as the most popular blockchain game.
• Illuvium’s first land sale generated $72 million, proving the value of Layer2 solutions like Immutable.
• Massive changes are coming to TWD Empires and Mirandus, according to Galaverse, including GRIT and Project Saturn.
• More than $1.4 billion has been raised since May by Web3 games and other metaverse ventures linked to blockchain gaming.
• In response to the “move-to-earn” concept, STEPN now has over 2 million monthly users.

Table of Contents

• Despite the downturn, Splinterlands continues to operate at a steady 350,000 daily UAW.
• $72 million from the sale of Illuvium property, setting the stage for further NFT sales in the future
• It’s time to discuss the Galaverse.
• STEPN’s move-to-earn model continues to gain traction, with 2 million new customers signing up monthly.
• There were $1.3 billion in gaming and metaverse investments in May, led by A16z and Dapper Labs.
• The most popular games are preventing the market from collapsing.
• Is Avalanche on its way to becoming the next big gaming chain?
• Closing

Despite the weak market, Splinterlands continues to churn out 350,000 UAW daily. The most popular blockchain game doesn’t seem to acknowledge the bear market. The complex trading card mechanisms of Splinterlands dominated the gaming world for the eighth month in a row. Only 4% less than in April, Splinterlands drew 350,000 daily UAW in May.

[SPS chart]

SPS validator node licensing sales have been a significant success story for Hive, the popular mobile game. After selling out in less than 15 minutes on May 26, 14.5 million SPS were burned, and roughly $4 million was allocated to the game’s DAO.

A Delegated Proof of Stake (DPoS) consensus process will be used to authorize all transactions in the future Splinterlands ecosystem, which will need SPS node licenses.

SPS holders will decide the destiny of Splinterlands’ DAO. Delegating SPS for a portion of the benefits ascribed to the validator node will enable players to purchase the node licenses in the game marketplace, allowing a more equitable distribution of game awards.

$72 million from the sale of Illuvium property, setting the stage for further NFT sales in the future

With a lack of favorable market circumstances, the highly anticipated blockchain game Illuvium was able to sell out its initial land plots. Open world RPG 20,000 land plots sold from June 2 to 4 generated 4,018 Ethereum, worth $72 million at the time. Land ownership in Illuvium is critical since it provides easy access to fuel, the game’s primary resource.

Several players had the opportunity to see the game’s mystical monsters, the Illuvials, in combat before the land auction, which took place in Q1. A mobile version of Illuvium, Illuvium Zero, will allow players to construct a virtual industrial complex and mine for materials.

To operate Illuvium, Ethereum layer-2 solution Immutable-X (IMX) will be used, reducing gas expenses while still using Ethereum’s infrastructure benefits. This was avoided by Illuvium’s Dutch Auction, in contrast to the Otherside mint, which saw millions of ETH -$4,000 destroyed in horrendous gas warfare. The average gas charge for the property auction was $20.

A major AAA blockchain game has made a land sale for the first time. Scalability methods like L2 and sidechains are outlined, as is the best way to host blockchain gaming transactions in general.

Apart from Illuvium, IMX is host to Gods Unchained, a TCG blasting through the bear market, Guilds of Guardians, Ember Sword, and other exciting games expected to be integrated in upcoming months. Web3 games will thrive on IMX. 

Time to talk about the Galaverse

Gala Games is slowly building a blockchain game empire. The Gala ecosystem is no stranger to the space with live games in TownStar and Spider Tanks, while assets for games like TWD, and Mirandus, one of the most exciting Web3 games already available in Ethereum marketplaces. On top of that, Gala relies on decentralized nodes run by the players that power up all Gala game dapps, making this ecosystem unique.

From June 6 to June 8, Gala Games hosted the Galaverse, its own conference in Malta. The team unveiled enticing partnerships and shed some light on upcoming milestones for some of the dapps within their ecosystem.

First, Gala Games announced that GRIT’s shooter game would be available in Epic Games Store. The blockchain game will introduce Web3 gaming to the 30 million active Epic Games Store users.

Epic Games is the studio behind Fortnite and the 3D computer graphics game engine Unreal. This contradicts the mindset of Steam, which banned all blockchain games from its platform last October.

Another exciting Gala partnership was announced at the Galaverse event. Project Saturn will become a Battlestar Galactica-themed Web3 game running on the Gala Games ecosystem. To get rights for the IPs, Gala partnered with Universal Pictures. The relationship with AMC to develop Walking Dead Empires is another example of a significant Gala partnership.

In addition, Gala Games will be home to Forever Winter, a horror shooter game developed by Fun Dog, a game studio composed mainly of developers that worked on The Witcher 3, considered one of the best games in recent years.

Also, there is Last Expedition, a TPS highly anticipated game developed by the creators of Halo and COD, two of the most successful gaming franchises. Gala Games will be a Web3 game powerhouse for years to come.

While the price of GALA couldn’t defy the bear trend, it is worth noting that the GALA token follows a similar logic to BTC with a capped supply and yearly halvings. The following important event in the Gala Games universe is the Mirandus Exemplars airdrop, which will reward MTRM and will be considered for Mirandus’ next playtest.

STEPN registers 2 million monthly users as move-to-earn continues to shine

Apart from market crashes and ecosystems imploding, one of the hottest topics in the industry has been the rise of move-to-earn (M2E) as a Web3 paradigm. As its name suggests, M2E allows users to earn token rewards based on physical activity.

STEPN is still the most popular M2E dapp, with at least 2 million monthly users, according to TechCrunch. GMT, the project’s governance token, also appears to be a popular option among investors as the number of unique wallets (262,000) holding the GMT token keeps rising despite the negative market sentiment.

While STEPN’s on-chain activity has stalled on Solana, the project will enable a leasing function where players can rent the Sneakers NFTs from other users adding another economic layer to this move-to-earn ecosystem.

Moreover, with the floor price of the Sneakers (5 SOL at writing) and the price of SOL ($29) moving down, the entry barrier to the STEPN ecosystem is more affordable than ever.

Apart from STEPN, some dapps are making strides in the M2E rankings, although most are in the early stages.

Genopets, another Solana Move-to-Earn dapp, takes the gamification element to another level. Genopets follows a similar approach to Pokemon Go, where players catch Genopets monsters moving across different locations in the real world using AR.

The game recently launched Genopets Habitat, the project’s virtual world that will reward users with bonus tokens and crystal earnings. Even though the game is free-to-play, Genopets monster NFTs are available on the secondary market for 55 SOL, offering players an advantage in the game mechanics. Genopets is yet to launch its mobile version, but the pre-registration process is open on the game’s website.

Step App is an Avalanche-based move-to-earn dapp that follows similar mechanics to STEPN. The mobile dapp is yet to launch its beta version in the upcoming weeks, although the FITFI staking pools have opened to the public.

Dotmoovs, a multichain m2e dapp running on Ethereum, BNB, and Polygon, presents an exciting proposition to earn while exercising. Dotmoovs consists of PvP battles where players need to record themselves showing off their dancing and football skills. The free-to-play game is available to download on Android and iOS and rewards users with NFTs and MOOV tokens.

Finally, OliveX is a unique move-to-earn ecosystem with dapps like Dustland, Zombies Run, and Lympo Squat. OliveX is a digital health and fitness company backed by Animoca Brands focused on developing unique user experiences through fitness gamification, augmented reality, and play-to-earn experiences. The three dapps are available for download on Android and iOS app stores.

In all, the move-to-earn movement is one of the most intriguing concepts in Web3 as of lately. Whether these games can build a sustainable economic model remains to be seen. However, exercising while earning can become an excellent option to surf through the bear season.

A16z and Dapper Labs lead May’s gaming and metaverse investments with $1.3 billion in investments

Another bullish aspect of blockchain games has been the consistent amount of capital flowing into metaverse and game projects. In 2022, $4.9 billion has been poured into gaming and metaverse, including blockchain infrastructure, guilds, and incubators, to boost the gaming outlook. That amount doesn’t consider the $600 million committed by a16z to create the Games Fund One, a branch that will focus on boosting games studios and infrastructure.  

The other noticeable investment was the $725 million raised by Dapper Labs to expand further the Flow ecosystem. Flow has partnered with some of the biggest sports IP brands, namely NBA, NFL, La Liga, and UFC, and is home to OG game CryptoKitties.

It is a positive sign to see capital flowing into blockchain gaming, where $1.4 billion have been raised since May despite the market turmoil. At writing, 33% of the capital this year has gone to infrastructure projects, while metaverse gaming projects have submitted 25%. Even amid the bear season, the interest in this category is not slowing down. 

Top games driving resistance to the market crash

As noted in our May’s Industry Report, game dapps are the strongest vertical resisting the market crash. While new games, including the move-to-earn dapps, have played an important role in mounting this resistance, the engagement observed in the top game dapps has been the main driver behind blockchain games sidestepping the market crash.

Splinterlands continues its strong performance with engaging battle dynamics and an enticing decentralized economy represented by the node licenses explained above. Wax’s Alien Worlds and Farmers World complete the top three spots.

Impressively, Farmers World grew its player base by 18% in May, surpassing 133,000 daily UAW. The Mining network is another Wax Gamefi dapp posting high on-chain usage levels. However, it remains to be seen whether these numbers are coming from organic or bot-driven activity.

Upland has also become a synonym for consistency. The EOS virtual world has been one of the tops played games since Q1 2021. The number of Upland on-chain players increased 5% in May, surpassing 47,000 daily UAW. Upland’s player base has almost doubled (90%) since May 2021.

Polygon’s Sunflower Land and Arc8 also grew their player base despite the bear season. Sunflower land is completing its turnaround after the game’s first version collapsed earlier this year. Meanwhile, Arc8 keeps adding mini-games to their repertoire, finding positive responses with their football and basketball updates.

Apart from the incumbent blockchains, it is worth noting that Thundercore, an EVM-compatible chain, is building a complete mobile blockchain game offering. Galaxy Blocks and Jelly Squish increased their activity by 23% from the previous month, while Color Craze grew its player base by 53% from April’s levels.

On the other hand, BNB’s Bomb Crypto and Mobox lost 50% and 28%, respectively. The case of Bomb Crypto is a bit concerning, especially considering the background of Binance-based games.

The dapp’s player base has fallen sharply from the 22,000 daily UAW in Q1 to the 5,000 daily UAW registered in May. The case of Mobox might be directly related to the crash, as the game relies heavily on NFTs where specific projects have struggled.

Harmony’s DeFi Kingdoms (-41%) and Polygon’s Crazy Defense Heroes (-61%) have also struggled this month. To be fair, the steep decrease in the on-chain activity of these games is directly tied to the crash of their respective tokens – JEWEL and TOWER.

JEWEL has lost 99% since April, while TOWER is 92% down in the same timeframe. Still, both game dapps have over 12,000 daily UAW and remain among the top blockchain game options in the market.

Finally, Axie Infinity still feels the ramifications of Ronin’s bridge hack. Axie’s on-chain activity has shrunk -39% from April but is still 55% higher than May 2021. Axie Infinity released the Origin mobile test version, making the game more accessible to a broader audience.

We’ll continue to monitor the state of blockchain games.

Will Avalanche become another game powerhouse chain?

Avalanche is a network mostly known for its DeFi feature. Currently, the game category remains unexplored, mainly with Crabada spearheading the GameFi movement inside the red blockchain. Over the last 30 days, Crabada attracted over 5,250 UAW, decreasing 50% from the same period. However, the gaming future seems bright for the Ava Labs network.

Shrapnel, an AAA first-person shooter (FPS) game, is set to launch its open Alpha in Q4 2022. Shrapnel aims to become one of the first AAA FPS blockchain games with an in-game economy powered by SHARP, the game’s native token.

Shrapnel will allow players to extract loot boxes containing SHARP rewards as well as NFTs skins and weapons. Interestingly, creators will be in charge of designing the maps and some of the in-game assets.

At first glance, Shrapnel portrays all the desirable factors to create a self-sustaining gaming metaverse. The best scenario is Sharpnels becoming PUBG for blockchain. The mint phase for the first five avatars of the games known as Operators started on June 9 and will carry on for five weeks, with each avatar design available to purchase on OpenSea for 0.05 ETH or $60 unlocking each week. To be fair, the mint price is accessible for such an ambitious project.

Domi Online is another enticing gaming option expected to be part of the Avalanche ecosystem. Domi aims to become a Web3 MMORPG inspired by Runescape. DOMI, the game’s native token, is deployed on Ethereum and BNB apart from Avalanche. The alpha release, including its virtual world, is expected in Q3 2022.

But the future of Avalanche gaming doesn’t stop there. Ragnarok, an NFT-based metaverse RPG, is one of the most excited Avalanche projects. Ragnarok has launched its NFT avatar collection on Ethereum and currently has a 0.49 ETH floor price.

Ascenders, a sci-fi open-world ARPG, is expected to launch its alpha season during Q3 2022, allowing players to be part of the in-game economy. It will be interesting to monitor if Avalanche can replicate its DeFi success in the land of blockchain games.

Learn more about upcoming Avalanche games here.

Closing

Blockchain gaming is proving to be a true survivor during this bear market. We are on the cusp of finally seeing a good amount of blockchain games with truly immersive game mechanics that take entertainment to the next level. We will complete the transition from play-to-earn to play-and-earn.

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