2024 Blockchain Gaming Industry Outlook: Traditional Game Developers to Drive Industry Growth
DeFi researcher Stacy Muur summarized Delphi Digital's outlook on the 2024 crypto market report, which indicates that the infrastructure and product content of the blockchain gaming GameFi industry are gradually maturing. With the participation of traditional game developers driving industry development, it is expected to usher in a new wave of growth.
Table of Contents
Crypto Gaming Supply Market
Traditional Game Developers Continue to Invest
Interest from traditional game companies entering the Web3 gaming market is growing. Major gaming companies such as Noxen, the developer of MapleStory, Netmarble, the developer of Lineage 2, Krafton, the developer of PUBG, and Bandai Namco, the developer of Elden Ring, have all started developing Web3 gaming products, with many projects expected to launch next year.
Traditional gaming companies bring significant capital and existing development capabilities, enhancing overall product quality competition in the industry, and are expected to accelerate industry development.
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Improving Web3 Gaming Infrastructure
The number of blockchain networks primarily serving gaming needs is increasing annually, with 76 new decentralized networks expected in 2023 alone, including general L1, specialized L2, L3, sidechains, zkEVM, etc. As a result, a more intense competition for users and liquidity among networks is expected in 2024.
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The on-chain transaction volume generated by blockchain games is on average 23 times that of DeFi protocols, and efficiency remains a key factor in the competition among many gaming networks, subnets, and chains.
The Delphi Digital team specifically points out the Telegram TON ecosystem, believing that the latter may see more opportunities in the gaming industry in the future. They also highlight HYTOPIA and Ronin as two gaming projects worth looking forward to next year.
On the other hand, as user experience technology and standards for crypto products improve, the barrier to entry for mobile game development lowers, making mobile games gradually the focus of Web3 gaming teams to align with market trends.
Enhancing Gaming Experience with AI Game Content Creation
Delphi Digital believes that creating game content through AI will be a key factor in future gaming experiences and highlights several AI integration projects in crypto gaming:
Full Chain Gaming
Currently, the MUD game engine built on the Optimism and OP Stack frameworks, and the Dojo game engine based on the StarkNet ecosystem, have dominated the development capacity and ecosystem of most full-chain games (FOCG), with the relationship between full-chain games and Layer2 becoming even closer in the future.
AAA Blockchain Games
Over the past two years, AAA games have been a focal point in the blockchain gaming industry. Some well-known AAA chain games include Big Time, Star Atlas, and Illuvium, garnering significant attention and liquidity in the market, with their token market values all exceeding $100 million.
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Delphi Digital believes that the development of 3A blockchain games is gradually maturing and can now compete with traditional games in terms of game content.
Crypto Gaming Capital Market Valued at Approximately $4 Billion
In 2023, Delphi Digital compiled a total of 183 gaming projects throughout the year, finding that their total market value remained relatively stable between $4 to $7 billion. However, this figure is still 86% lower than the historic peak of nearly $400 billion in 2022.
Crypto Gaming Demand Market
The Philippines Remains the Primary Demand Source
Currently, the main markets for blockchain games are the Philippines, Nigeria, Pakistan, Singapore, Vietnam, South Korea, Hong Kong, China, and the United Arab Emirates.
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Most Projects Have Daily Active Users Less Than 100
Among the existing playable blockchain games, only slightly over 5% of projects have daily active wallet addresses exceeding 100, with the actual number of players likely even fewer.
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However, the overall number of daily active wallet addresses in blockchain games exceeds 1.2 million unique addresses, with daily on-chain gaming transaction volumes of approximately 15 to 25 million transactions, indicating a prominent industry effect.
Increasing Customer Acquisition Costs in Web3 Gaming
Due to the financial nature of the current crypto gaming market, which rewards users for participating in games and cold starts, the operating costs of gaming projects are gradually increasing, making it challenging to sustain operations.
The cost of user acquisition in blockchain games is expensive. According to the report, in the casual gaming category, the customer acquisition cost for blockchain games is 77% higher compared to competing traditional games.
The Web3 Gaming Industry Is Indeed Advancing
In summary, the following key points can be gathered:
- Traditional game developers are driving the development of the chain gaming industry
- Blockchain gaming infrastructure is gradually improving
- 3A blockchain game development is becoming increasingly competitive
- How to attract and retain users remains a major challenge
- There is still room for optimization and consideration in chain game token economics
Common issues in Web3 gaming in the past, such as uninteresting game content, unsustainable token economics, poor performance of underlying networks, and bad user experiences, are gradually being addressed and emphasized, with the industry continuing to refine products even during market downturns.
While there will be many new challenges in the future, such as liquidity fragmentation or rising marketing costs, overall, the chain gaming industry has indeed made progress, making blockchain games more grounded and reliable.