According to the observations of GameFi in 2022, the ecosystem has already risen and fallen on the back of the 2021 NFT hype cycle. Early token rises and NFT mints were rewarded by the “NFT go up” mindset for games that were still in development and solely intended to provide players with an opportunity to earn money.
Many P2E gaming projects that were released in the last 12 months include sustainable design rather than providing genuinely enjoyable play experiences. These games instead of holding the Ponzi schemes are controllable using WASD (The game controlling keys other than arrow keys).
As traditional equities and other assets saw a wider worldwide decline, the 2022 cryptocurrency market also had a severe correction. Investors have tightened their decisions to risk-on assets, such as cryptocurrencies, as a result of rising interest rates that are intended to fight inflation. With the exception of Web3 gaming, which is proving to be a significant factor in the global growth of blockchain and cryptocurrencies, venture capital funding in those industries has also somewhat decreased. Despite the weak market, blockchain gaming has been demonstrating its strength in these trying times. Blockchain games may receive over $10 billion in investments this year, more than tripling the US$4 billion raised in 2021, according to a report by market watcher DappRadar. To be precise, 2022 has been a significant year for growth, investment, and development in both web3 gaming and NFTs, indicating a fruitful crypto winter.
According to the Binance research, the situation at current leading Blockchains in Web3 gaming are:
Moving forward let’s review some of the major topics and metrics that indicate the development of these markets in this 2022 Web3 Gaming report. Read below how these turning points handled the market slump and how things are shaping up for next year after a year of significant growth for cryptocurrency markets and increasing attention to the web3 gaming field in particular.
1. Gaming Model Switch
The gaming model transformation is partially a result of the game developers switching to concentrate on the game play aspect rather than the earning part. The phrase “play to earn” also establishes certain standards for the playerbase. In some regions of the world, playing Axie Infinity used to be a full-time job. However, their faltering economy made it clear that this was an unstable arrangement.
Developers started using the phrase “play AND earn” instead of “play to earn (P2E),” suggesting that you can make money while playing. Actually, this more closely reflects what true gamers desire. They prioritise enjoyable games. Additionally, if they manage to uncover a way to earn a little money while playing their games,
The problem gap arises when the small gaming startups embracing the new economic model and the profound AAA studios with high-calibre games devoted to a premium $60 price tag and paid subscriptions. But the twist comes as the AAA studios that are now converted to the wildly successful F2P(Free-to-Play) model. The difference between the rising P2E economic model and AAA game quality will eventually close.
Many studios and developers are working to create a Web3 game that is genuinely entertaining. Businesses are exercising a formula that is entertaining, equitable, and profitable for both the gamers and their creators of them.
Web3 gaming is not readily switching back to a free-to-play (F2P) model from a pay-to-earn (P2E) model, as both models can coexist in the web3 gaming space. However, there are a few reasons why some developers and players in the web3 gaming space are experimenting with F2P and other models such as play-to-play (P2P), Factory Models etc.:
Player engagement: F2P models give players the opportunity to earn rewards for their skill and effort, rather than just spending money. This can create a more engaging and satisfying experience for players.
Fairness: F2P models can be more inclusive and fair for players, as it allows everyone to access the game without spending money.
Revenue generation: F2P models can generate revenue through in-game purchases, while P2E models generate revenue through the sale of in-game assets or currency.
Community engagement: F2P models can build larger communities, as it’s more accessible to a wider range of players.
It’s worth noting that many developers and players are experimenting with different models to try and find the best balance between player engagement, revenue generation, and fairness.
2. Newly Launched Web3 Games in 2022
The top games with the most DAUs (Daily Active Users) in 2022 are listed by collective Research as follows:
- Alien Worlds is a space-themed metaverse game.
- Benji Bananas is a ridiculously informal smartphone game in which players gather bananas.
- Solitaire Blitz is a simple card game.
- Splinterlands is a game of card accumulation.
- Illuvium is an open-world RPG game that invites you to gather NFT monsters called Illuvials. In PvE and PvP arenas, the player must engage opponents using these monsters.
- Legends Reborn: Essentially a deck-building game, Legends Reborn by Gala Games is enhanced with web3 concepts.
- My Neighbor Alice: Similar to Animal Crossing, My Neighbor Alice is a multiplayer-building game.
3. 2022 As The Year of Alphas
An essential stage of development is the alpha release. In software development, reaching a working build that you’re ready to share with the public is a significant accomplishment. It’s encouraging to see so many alphas and betas released this year.
It is true that 2022 was the year of the alphas. Axes Metaverse, Mytheria, Everseed, Sunville Farms, Moonville Farms, Eternal Dragons, Big Time, Ancient Society, Phantom Galaxies, Star Atlas, Farsite, Spider Tanks, Mirandus, Legacy, Superior, War Park, Chicken Derby, Green Rabbit, Guild of Guardians, R-Planet: Conquest, Farming Tales, My Neighbor Alice, TreeVerse, Life Beyond, etc. are some examples of games that fall under the initial release category.
4. Web3 Gaming investments/Funding review
The Web3 gaming and metaverse sectors received a lot of investment from venture capital firms this year. But the overall amount of money invested in these sectors fell from $5.5 billion in 2021 to $3.7 billion in 2022. (Footprint Analytics).
Animoca Brands is the market leader as of the publication date of this study, having invested in 61 projects in the web3 gaming and Metaverse categories. They are followed by Shima Capital with 29 projects and Infinity Ventures Crypto with 30 projects (CoinMarketCap). Even if it is happening more slowly than in previous years, the number of Game-Fi projects is still increasing. Yat Siu, a co-founder of Animoca Brands, has also made plans to launch Animoca Capital, a $2 billion metaverse fund.
With a $50 million B round, indie gaming studio Theorycraft secured the largest investment of the month in September. The trend of well-known gaming firms and developers entering the Web3 area is evident, with the founding team including members of Blizzard, Riot Games, and Ubisoft (Cryptoslate).
In October, Ubisoft and Take-Two Interactive participated in a $40 million Series A fundraising round led by Horizon Blockchain Games, the company that created the video game Skyweaver (DappRadar). More recently, Web3 game producer Fenix Games secured $150 million in order to purchase, fund, and distribute blockchain games (DappRadar).
Despite the unpredictability and difficulty of the market in 2022, it is evident that investors are still upbeat about the future of the blockchain gaming sector.
5. Ecosystems and Web3
Even if Axie Infinity and STEPN may have been the first projects to become widely popular, they are no longer the leading initiatives in the field. Alien Worlds and Splinterlands are the current leaders in terms of active users, with Alien Worlds claiming 131K average active users and Splinterlands closely trailing at 98K. Only the players of these two games account for almost 30% of all gamers on the web3 platform (Footprint Analytics).
The best performers in terms of transactions are WAX and Hive. The popularity of Alien Worlds and Splinterlands, which account for 54.55% and 99.85% of each platform’s overall users, respectively, is crucial to both of them as a blockchain technology (Footprint Analytics). BNB, the third-largest chain in terms of gamers and gaming transactions, hasn’t yet created a standout game in the genre.
Despite this, BNB Chain is still one of the gaming industry’s most resilient chains. With 299 new projects debuting on the platform in 2022 alone (excluding December) and a 37% market share in terms of web3 gaming protocols, BNB continues to dominate in terms of both new project launches and market share (Footprint Analytics). When it comes to new initiatives, Ethereum comes in second.
It is obvious that the world of cryptocurrency gaming is continuously changing, with new players appearing and established ones fading away. Although Splinterlands and Alien Worlds may currently be the dominant powers, the future is still uncertain.
6. Rise of Metaverse
The six basic elements that make up the Metaverse—blockchain, interactivity, games, AI, networks, and IoTs—are more popular than ever. According to Goldman Sachs, the potential Metaverse economy could represent an $8 trillion opportunity by 2022, according to Gartner, which recently designated the Metaverse one of the top five emerging trends and technologies for that year (Bitcoin.com). Due to the fact that gamers have long been participating in immersive virtual experiences and creating social ties, gaming is crucial to the growth of the Metaverse.
- Free-to-Own: The Limit Break gaming studio’s Free-to-Own (F2O) marketing strategy is minting a genesis NFT collection (in Limit Break’s case, DigiDaigaku) and giving them away for free in an exclusive and covert manner. A new gaming economy is being proposed as an enhancement to both free-to-play mobile games and play-to-earn business models that sell game NFTs to players up front. F2O sets the groundwork for this new economy. This model is among the most encouraging ones we’ve seen in 2022 for web3 gaming, regardless of whether F2O is fair or not.
- Soulbound Tokens (SBT): SBTs are non-transferrable digital identity tokens that can stand in for a person’s or an organization’s credentials, expertise, and/or reputation. These tokens represent and publicly validate an individual’s reputation, accomplishments, and skill level in a novel way that will have broad repercussions for web3 games, guilds, players, etc. Although SBTs are still a relatively new idea, developers are actively working on SBT products that may be available by the end of the year.
- Permanent Death: This refers to the gameplay mechanic in which a player’s character is reset to zero upon death. The more battles they win as they advance in the game, the more competent their character becomes, and the more the game’s owner is rewarded. However, if they lose, their character passes away for good and the NFT that represents it is burned. As it promotes talent, strategies, and more deliberate risk-taking, the idea can assist web3 gaming transition from playing for profit to playing for fun and embracing difficulty.
- Physical Backed Tokens (PBT): The developers of Azuki, Chiru Labs, released this novel open-sourced token standard in October. It links a physical object to a virtual token on the Ethereum blockchain. Using physical objects to create digital experiences; tracking the ownership history of physical commodities; and decentralized verification of goods are all possible with PBT. With PBT, users may now create a collection that includes both digital and physical items, exchange authenticated goods, or take part in physical quests.
- ERC-4907: Since NFT rental platforms have grown in popularity in the digital sphere, the Double Protocol-proposed ERC-4907 standard has quickly emerged as one of the most significant token standards thanks to its novel and surprisingly straightforward implementation. The ERC-4907 standard does away with the requirement for collateral in lending and borrowing NFTs thanks to its dual-role capability. NFT owners, buyers, marketplaces, and artists will have access to safer and more lucrative opportunities if it becomes generally accepted as the norm for NFT creation and programming.
Sensational Projects In 2022
- Kiraverse: Built on Unreal Engine 5, is an online multiplayer game, which allows players from all over the world to participate, compete, and gain achievements to unlock or rent avatars, skins, weapons, and other items. Battle Royale and Elimination are the two game types that KIRAVERSE will debut with. To improve their gaming experience, players can acquire in-game achievements and own, buy, or rent characters, skins, weapons, and other items.
- Illuvium: A collectible 3D fantasy RPG game with 343k Twitter followers that has developed a substantial and devoted fan base. In addition to concluding a virtual land deal for over $72 million this year, Illuvium also just made the auto-battler game mode’s first private beta available. The game has received overwhelmingly positive reviews so far and has AAA visuals and gameplay.
- Shrapnel: The project has garnered a lot of interest from the public, particularly in the West. It is being developed by a team of seasoned developers that have won BAFTA and Emmy awards from series like HALO and Call of Duty. Shrapnel, which won “Most Anticipated Title” at the Polkastarter GAM3 Awards this year, is evidence that Web3 games’ quality will continue to rise.
- Big Time: A forthcoming multiplayer action role-playing game that is now in early access. This project’s aim of creating a “second-generation crypto game” in terms of its in-game economy has been obvious this year, among other things. Big Time recently unveiled full information on its token and economy, which aspires to build a player-driven circular economy.
- Tatsumeeko: A multi-chain MMORPG designed to “build communities and deepen worldly relationships” and based on the Tatsu.GG Gaming Bot in Discord. The Tatsumeeko proof-of-concept generated over $369K in microtransactions, surpassed 62K MAU, and over 4.7M virtual products sold. The well-known Discord communities of PewDiePie, Davie504, Moistcr1tikal, Mobile Legends, and Team Liquid, and the fan community of Kanye West, Ariana Grande, and Hololive Fan Server already have Tatsumeeko.
What’s in for 2023?
Cryptocurrency volatility is nothing new, and 2022 was a true rollercoaster for the entire sector. It also represents a remarkable chapter in the artifacts of crypto history. It will be a useful lesson to educate both experienced developers and beginners that cryptocurrency is still “a work in progress” while simultaneously highlighting how far it has come. Future developments in this quickly evolving industry will be shaped by innovators and visionaries who remain focused and persistent.
The two industries that are most likely to use blockchain technology to spread cryptocurrency are Web3 gaming and Metaverses. Following a bright start to 2022, economic and social unrest has had an impact on international markets, particularly tech.
Crypto and NFT advocates have had to deal with hacks, significant falls, and plummeting token prices. Web3 gaming and NFTs are still very much alive and moving forward in spite of all the FUD (Fear, Uncertainty and Doubt).
As the industry develops, there will be more obstacles and setbacks, but we also anticipate that market recovery, adoption by Web2 businesses, and significant technological advancements will serve as the catalysts for a number of innovative NFT and Web3 Gaming projects and trends in the coming year and for many years to come.
The blockchain sector may have been jolted by the bear market and other problems, but the web3 gaming alternatives are just becoming better. In 2023, It can be confidently expected that there will be even more advancements in blockchain gaming with good value returns.