It’s been a challenging few months for blockchain gaming. Between some historic hacks resulting in huge losses, and declining interest from players, things have certainly cooled off from the peak of blockchain gaming euphoria. With all that said, that short-term picture doesn’t tell the whole story. For that, you have to zoom out.
As a matter of fact, a new report from DappRadar and the Blockchain Game Alliance (BGA) has done just that. It found that the blockchain gaming sector has actually grown by 2,000% over this past year.
Blockchain gaming still attracting plenty of users, and investors
First of all, it’s important to note that external factors have impacted all sectors of the crypto industry in recent months. Threats of anti-crypto legislation, the war in Ukraine, hacks & scams, and an overall dip in the performance of cryptocurrencies have all contributed to a challenging start to the year.
Nevertheless, as the DappRadar x BGA report has found, there’s actually lots of evidence pointing to a level of stability in blockchain gaming. For one thing, blockchain gaming dapps still account for 52% of all blockchain activity according to the report.
Indeed, the daily average of Unique Active Wallets (UAW) connecting to blockchain gaming dapps in Q1 2022 was 1.17 million. On one hand, this was a 2% decrease from Q4 2021. On the other hand, the March daily average was over 1.22 million UAW. That is to say that blockchain gaming is already showing signs of recovery.
Another key point is that blockchain games raised $2.5 billion in Q1 of 2022. If fundraising was to continue at this rate, then blockchain gaming investments will be 150% higher than last year. Evidently, this shows that investors are still showing a lot of faith in the future of blockchain gaming. Perhaps the most notable example of this is the $450 million Yuga Labs raised, primarily to grow its upcoming gaming metaverse, Otherside.
Given the fact that the industry has seen 2,000% growth in a year, it’s easy to see why investors remain confident.
Sky Mavis showing strong signs of life even after historic hack
Without a doubt, the biggest recent development in the blockchain gaming sector was the hack of the Ronin network. To that end, the report also touches on the fallout from that.
As many now know, the network supporting the biggest blockchain game to date, Axie Infinity, was infamously hacked for over $600 million. Not only that, but it has come to the light that a North Korean hacking group was behind the attack.
Significantly, Axie Infinity was already on a slight decline before the hack happened. As the report points out, the blockchain gaming pioneer’s daily UAW was 22,000 in March. This was down quite a bit from its January peak of 55,000. To sum up, the report attributes the dip, which started in mid-February, to changes that Axie creators Sky Mavis made to stabilize the blockchain game’s in-game currency, SLP.
Even so, Sky Mavis and Axie Infinity have started their recovery from the attack. The company has already promised to return users’ funds out of its own coffers. Despite all these challenges, Axie Infinity is still among the top 10 most played blockchain games by daily usage. Given the popularity of the game, as well as its backing by industry giant Animoca Brands, it seems likely that Axie will bounce back.
All in all, the DappRadar x BGA report paints a picture of a young industry showing overall signs of growth. Naturally, this growth could not be without some drawbacks. All things considered, especially when noting the mass interest in gaming metaverses, it seems safe to say that the outlook for blockchain gaming this year is still very positive overall.
All investment/financial opinions expressed by NFTevening.com are not recommendations.
This article is educational material.
As always, make your own research prior to making any kind of investment.
