The collapse of crypto trading platform FTX has shaken the Web3 gaming market. It will have a deep and long-term impact on the broader crypto economy. In fact, the financial impact of the collapse extends far beyond the immediate FTX customer base. It has undermined the trust of customers and investors in general. This, in turn, affects the whole crypto industry, from cryptocurrencies to NFTs.

However, the gaming sector has shown significant resilience. Indeed, blockchain games raised almost $320 million in November 2022.

DappRadar's report clarifies the details of the situation.

Gaming activity

Web3 gaming is still the industry's main driver of growth despite the FTX crash. What’s more, games were responsible for almost half of all blockchain activity recorded by DappRadar in October and November 2022. This was across 50 networks. DappRadar also reported that there were 800,875 daily Unique Active Wallets (UAW) interacting with games' smart contracts in November.

Although there was a 12% decrease, nevertheless, Web3 gaming activity is still the most significant part of the industry. It makes up 42.67% of all blockchain activity.

The effect of blockchain games can be seen in the NFT market as well. In-game NFTs saw a total trade volume of $55 million over the same two months.

Main Web3 gaming protocols

Looking at the UAW of the top Web3 gaming protocols, WAX is still the most popular blockchain. Moreover, it is the only one where activity has increased consistently over the last three months. In October, it reached an average of 329,529 daily UAW, translating into a rise of 8.85% compared with September. Similarly, the gaming dApp's daily UAW climbed by 4.48% to 344,284 wallets in November.

Hive (the second Web3 gaming protocol), climbed by 4.94% in October, with an average of 169,655 daily UAW. On the other hand, in November it declined by 7.83%, reaching 156,369 daily UAW, the same activity observed in July. The trading card game Splinterlands is the main driver of activity on the Hive blockchain.

With a 3.95% surge in popularity in October, BNB Chain overtook Hive to take second place among Web3 gaming protocols. At that stage, BNB Chain had average daily UAW of 171,269, yet, it suffered a severe setback in November. Protocol activity fell by 35.08%, with average daily UAW of 111,188. 

Main Games

With a growth of 25% from the previous month, Alien Worlds had an average of 212,350 daily UAW in October. In fact, this made it the most popular blockchain game in October. 

Alien Worlds was also the most popular blockchain game in November, averaging 225,360 UAW per day. This was 6% higher than the previous month.

Other Web3 gaming trends include that Splinterlands had, on average, 169,445 daily UAW. Moreover, this was a 5% rise from the month before.

Activity for the smartphone game Trickshot Blitz increased by an astounding 70% month on month. It achieved 23,086 daily UAW on the Flow blockchain. Unsurprisingly, the surge was caused by the Season 7 Challenge.

Decentraland saw an increase in sales of 43.02% and a 31.34% increase in trading volume in October, reaching $1.2 million. On the other hand, the trading volume and the number of sales in November fell by 53.98% and 23.44% respectively.

Another negative Web3 gaming trend involves Axie Infinity. In October, it averaged 19,434 daily UAW (a 21% drop from September), hence, this game's negative trend has continued.

Investments in Web3 gaming

Despite fewer investments in recent months, $534 million was raised in October and November from blockchain-based gaming and metaverse ventures. It is also important to note that various efforts have been made to create the necessary framework for Web3 gaming.

The trend for investing in blockchain gaming is now on the rise. In fact, investments in blockchain gaming companies and ventures increased after September, which was the lowest month for such investments.

Looking at the bigger picture, in 2022, infrastructure has received 33.5% of blockchain game investments. Guilds and incubators received 19.4% of investments, with games and metaverse projects accounting for 26.9% of all Web3 gaming investments. Furthermore, investment companies received 14%, whereas NFT-in-gaming initiatives accounted for 5.6% of the investments. 

Notably, the major recipients of money are the projects relating to games, the metaverse and infrastructure. The most prominent investors this year have been Pantera Capital and Animoca Brands.

Conclusions

As can be seen, the Web3 gaming sector has experienced some ups and downs in recent times.

Indeed, the cryptocurrency market has come under pressure lately due to the collapse of the crypto exchange FTX. Thanks to the loss of money experienced by both customers and investors, distrust has spread throughout the market. A sense of caution has led to a reduction in liquidity and crypto assets achieving lower prices.

Web3 gaming, however, is the only sector of the crypto world to have been impacted in a limited way. In some cases, it has even continued to witness a positive trend. The resilience shown by the gaming sector is promising, not just for gaming itself, but for the whole blockchain industry. This is because gaming accounts for about half of all blockchain-based activity.

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