August 2022 GameFi Report
While the number of new users entering GameFi has dropped precipitously, the average number of transactions per user is increasing steadily. Therefore, with the users in the market today more likely to be actively gaming, GameFi data from August can help us understand which projects and ecosystems are sustainable in the long run.
Splinterlands and Alien Worlds continue to be neck-and-neck as they steadily increase the number of users since June despite the market. In contrast, once promising Farmers World continues to bleed users.
A massive $200M funding round for stealth mode Web3 gaming studio Limit Break and large rounds for other developers like Animoca and Gunzilla Games show that investors are banking on studios to carry the torch once the market reverses.
Financing & Investment
Crypto Macro Overview
The crypto market saw its most substantial rally in half a year from mid-July to August, spearheaded by Ethereum’s jump above $2,000 in mid-August.
GameFi does not quickly recover on macro news
Either way, the trend did not translate to a significant increase in market cap or users for most games. The total GameFi token market cap rallied precariously in mid-August to $6.43 billion but then declined by 26% by the end of the month.
Most concerningly, the number of new GameFi users continues to sit at extreme lows. This is because the GameFi sector takes more resources and time investment to re-enter than others, requires active participation to generate yield, and is still highly speculative.
Splinterlands and Alien Worlds show a sustainable player base
Besides a collapse for Splinterlands user numbers in June, Splinterlands and Alien Worlds have shown steady growth in their user numbers.
Interestingly, both Splinterlands and Alien Worlds are relatively basic card and text-based games with no ability for the user to control characters in an immersive world. However, they involve strategy on the player’s part to win and achieve profitability.
Both are far from what people imagine gaming to look like in 2022 (the next major cohort of games, which includes Illuvium and Phantom Galaxies, aims to redress this.)
Investors bet big on game developers and studios
While overall funding has tanked, investors still close rounds for proven teams with a record of viable products in either Web3 or Web2.
The top financing rounds in August reflect a trend that’s been long building—investors are closing funding for Web3 game studios, and traditional developers are now seeking to enter GameFi. Studios and developers have had significantly more success in this bear market than GameFi infrastructure projects or individual games.
Among the rounds in August was $45 million for Animoca Brands, which has dozens of blockchain games in its portfolio, including The Sandbox, Crazy Defense Heroes, and the upcoming Phantom Galaxies. The round brings the company’s total investment funding to $775.3 million.
The top round for the month went to Limit Break, the studio behind the DigiDaiku NFT collection with plans to launch free-to-play blockchain games.
By the numbers, the GameFi industry has had a bad month in August as its rut continues, with little relief from the month’s Ethereum-driven rally.
Overall volume, the number of new projects, and investment stay near July levels or drop further.
However, now is a great time to build—proven developers and studios with ideas for future blockchain games and metaverse projects continue to receive record funding rounds. With the healthiest games right now being the relatively basic Splinterlands and Alien Worlds, there’s a lot of room for improvement.
The Footprint Analytics community contributed to this piece.
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