Written by: Stella L
In October 2024, the Web3 gaming market performed steadily, contrasting with the broader crypto market's growth trend. Bitcoin rose by 15.9% during the month, nearing its historical price peak, while the market cap of gaming tokens remained at $21.15 billion, close to last month. Daily active users reached 5.3 million, mainly driven by Telegram-based games, particularly blockchain projects like Matchain, Sui, and Core, which achieved significant user growth by integrating Telegram gaming.
This month saw several important developments: traditional gaming giant Ubisoft launched its first blockchain game on Oasys, and crypto fund VanEck invested in Gunzilla Games. Meanwhile, capital continues to flow into the industry, with Azra Games raising $42.7 million in funding.
Macroeconomic Market Review
In October, the crypto market showed mixed performance, with Bitcoin exhibiting significant strength while other sectors saw more moderate gains. Bitcoin rose from $60,764 to $70,398, an increase of 15.9%. Notably, Bitcoin hit $72,751 on October 29, nearing the historical high of $73,104 set on March 14, 2024. In contrast, Ethereum's performance was relatively flat, rising from $2,453 to $2,519, a mere increase of 2.7%.
Source: Bitcoin and Ethereum price trends
October's crypto market was significantly influenced by the macro environment. The strengthening dollar and weakening renminbi heightened concerns over trade tensions and tariff risks. This currency volatility accompanied a rise in bond yields and an increase in gold prices, indicating a complex shift in global risk perception and investment flows.
With the U.S. elections approaching, political factors increasingly influence market sentiment. Investors are positioning themselves ahead of potential policy changes, accelerating Bitcoin's rise as the market weighs the possible impacts of different election outcomes on digital asset regulation and financial policy.
Institutional activity remained strong this month, with Bitcoin exchange-traded products (ETPs) recording large net inflows. This ongoing institutional interest, combined with Bitcoin's performance significantly diverging from other crypto sectors, shows that large investors are increasingly selective in their allocations.
Regulatory developments continue to impact the market landscape. The FBI's investigation into NexFundAI tokens through 'sting operations' marked a significant milestone, leading to market manipulation charges against three cryptocurrency companies and 15 individuals. At the same time, Crypto.com's lawsuit against the SEC highlights the ongoing tension between industry participants and regulators.
Overview of the blockchain gaming market
In October, the blockchain gaming industry showed mixed signals, with token market caps stabilizing but user metrics undergoing significant changes. The market cap of blockchain gaming tokens slightly increased from $21.07 billion to $21.15 billion.
Source: Market cap of blockchain gaming tokens and Bitcoin's market cap
User engagement metrics showed more significant changes, with October's daily active users (DAU) reaching a new high of 5.3 million, an 11.3% increase over September. This growth was primarily influenced by Matchain's peak user metrics between October 10 and 13, during which it launched four games in the Telegram ecosystem. The surge in Telegram gaming-related activities continues to reshape user acquisition patterns.
Source: Daily active users of blockchain games
The number of transactions shows moderate growth, with an average daily transaction volume reaching 9.3 million, a slight increase of 2.1% compared to September. However, this growth rate is still lower than the growth of DAU, and the transaction volume per user remains the same as in September.
Source: Daily transaction counts in blockchain games
Transaction amounts showed slight contraction, with average daily transaction value decreasing by 1.9% to $7.5 million.
Source: Daily transaction amounts in blockchain games
These metrics hold particular significance within the broader context of cryptocurrency adoption. a16z released a report on the '2024 Crypto Landscape,' estimating that the current active crypto users range between 30 million to 60 million, accounting for 5-10% of the total global crypto users of 617 million reported by Crypto.com in June 2024. This significant gap highlights an important opportunity: converting existing cryptocurrency holders into active users. Although Web3 games have long been seen as a vital catalyst for the widespread adoption of blockchain, their performance in the current market cycle indicates that achieving this potential still faces challenges.
How are the builders of blockchain games adjusting their strategies to bridge this engagement gap? We will explore this further in the following sections.
Overview of public chains in blockchain gaming
In October, the number of active blockchain games reached 1,606, a slight increase of 1.6% compared to September. BNB Chain, Polygon, and Ethereum led the market with shares of 22.5%, 18.4%, and 13.6%, respectively.
Source: Proportion of active game projects on various public chains
DAU metrics indicate a shift in the competitive landscape, with opBNB, Ronin, and emerging Matchain becoming the best-performing chains. These chains had average DAUs of 1.2 million, 886,000, and 548,000, respectively, capturing 25.6%, 13.1%, and 11.2% of the DAU market share by the end of October.
Source: Daily active game users for each public chain
opBNB showed strong growth momentum, with average daily DAU increasing by 10.5% compared to September, primarily driven by GombleGames and Alliance Games, whose user bases grew by over 100% and 78%, respectively. Interestingly, this growth reflects BNB Chain's transition to opBNB for blockchain gaming development, while BNB Chain itself saw a decline in average daily DAU of 43.8%.
Matchain is a decentralized AI blockchain focused on data and identity sovereignty, which launched its mainnet in August. The daily average users of the chain surged from 78 in September to 548,000 in October, primarily driven by Telegram-based games like LOL, Jumper, and Digiverse. During the period from October 9 to 13, Matchain's performance peaked, averaging 2 million DAU, reaching a high of 3.3 million DAU on October 12. Although user numbers significantly declined afterward, they stabilized at around 615,000 in the last week of October. The DAU skyrocketed from 78 to 548,000, demonstrating the potential and challenges of acquiring users from the Telegram ecosystem. This is a common challenge faced within the Web3 gaming industry, where projects struggle to maintain the momentum of initial user growth and achieve sustained organic growth.
Source: Daily active users of Matchain
Sui performed strongly, with average daily DAU increasing by 105.1% to 186,000. Several Telegram-based projects drove this growth: BIRDS (a Memecoin and game mini-app) and MemeFi. Notably, MemeFi shifted its token issuance from Ethereum L2 Linea to Sui a few weeks before its airdrop event. This strategy of combining Memecoin with gaming appears to be Sui's method for maintaining user engagement.
Core's average daily DAU increased by 75.7% to 109,000, driven by traditional Web3 games like World of Dypians and Pixudi, as well as new Telegram-based games. 'Talk-to-Earn' and 'Tap-to-Earn' game TomTalk achieved significant success, accumulating over 1 million users on Core within a month. Core's strategy appears to focus on long-term ecosystem development through strong support, such as collaborations with TomTalk and Pixudi.
TON's average daily DAU decreased by 27.7%, dropping to 195,000, reflecting a decline in activity for several games after TGE. However, TON's success in acquiring Telegram users has sparked imitation across the industry. In addition to TON, several other chains are now actively vying for the Telegram ecosystem user base. Matchain, Sui, and Core have achieved significant success in this regard, while emerging chains including Sei, Ancient8, and Viction are also implementing similar strategies.
Meanwhile, other chains face their own challenges and opportunities. The Arbitrum community proposed a $220 million plan for the 'Game Catalyst Program' (GCP), suggesting that 220 million ARB tokens allocated by the foundation be returned to the treasury, highlighting demands for financial and operational transparency regarding GCP.
In contrast, Immutable zkEVM took a strategic step towards decentralization by removing its deployment whitelist and enabling permissionless deployment. Since launching its testnet in March 2024, Immutable zkEVM claims to have achieved significant growth, with over 2.5 million monthly active users on-chain in the first quarter.
Immutable
Overview of blockchain games
At the end of October, there were a total of 3,503 games in the blockchain gaming ecosystem, of which 1,336 remained active. 283 games attracted over 1,000 monthly active users (MAU), accounting for 8.1% of the total number of games and 21.2% of active games.
Source: Monthly active blockchain games count
The Telegram gaming phenomenon continues to shape the industry landscape, but it also faces sustainability challenges. Hamster Kombat leads October's Telegram Mini Apps with 51.9 million MAU. However, the gap between the claimed user numbers (nearly 300 million in August and September) and the latest retained user count, combined with a 70% drop in token price from its historical peak post-TGE, indicates that the project still faces opportunities and challenges in converting initial user interest into sustained engagement.
Source: Popular Telegram Mini Apps leaderboard
In other news, Ubisoft entered the blockchain gaming space with Champions Tactics: Grimoria Chronicles, a tactical RPG launched on October 23 on Oasys's Layer 2 Home Verse, focusing on PvP combat and team-building mechanics.
A notable investment event was VanEck's crypto fund announcing its investment in Gunzilla Games. VanEck had previously invested in Parallel. Gunzilla launched the highly anticipated game Off the Grid this month on PlayStation 5 and Epic Games. Off the Grid is built on its blockchain Gunzilla (recently upgraded from an Avalanche subnet to L1) but explicitly positions the game in its website Q&A as 'not an NFT game,' rather a battle royale game with 'optional NFT elements.' This reflects a trend of viewing blockchain features as auxiliary mechanisms for games rather than core essentials.
Off The Grid
This evolving integration of blockchain, particularly driven by established gaming companies, indicates market maturation, where technology is used to enhance rather than define gaming experiences. This subtle shift may bridge the gap between traditional and Web3 gaming.
Investment and financing conditions in blockchain gaming
In October, the Web3 gaming industry showed strong growth in investment activities, raising $94.6 million across 13 financing events, a significant increase of 44.2% compared to September. Four of the events did not disclose their financing amounts.
Investment and financing events in the blockchain gaming sector for October 2024 (Source: crypto-fundraising.info)
The highlight of this month is that Azra Games raised $42.7 million in Series A funding, led by Pantera Capital, with support from industry giants such as a16z crypto, A16Z GAMES, and NFX, indicating confidence in advanced mobile gaming experiences. Azra's vision of a 'fourth-generation mobile RPG' marks a significant evolution in mobile gaming, providing a console-level gaming experience that includes an open world, complex camera systems, real-time combat, and extensive PvE activities. An increasing number of investors are betting on the integration of console-level gaming experiences with mobile platforms, suggesting a potential shift in how Web3 games are consumed.
The infrastructure sector also showed activity, with Alliance Games securing $5 million in Series A funding led by Animoca Brands and Asymm Ventures. Alliance Games focuses on AI-driven decentralized infrastructure, addressing critical needs in the ecosystem.
