In 2023, the nascent blockchain gaming industry continued to grow and more polished experiences saw the light of day—but progress moved at a slower pace than in 2022.
Blockchain gaming saw $1.4 billion in investments between May and November 2023 alone, but the broader gaming industry has continued to see a decline in both the number of investments and lower deal values, according to Pitchbook data.
The overwhelming majority of blockchain games are indie or mid-size projects, with AA and AAA funding levels only making up 6% of the market, per a Game7 report. This year, half of all new blockchain games are based in Asia and the total number of gaming-focused blockchains has grown 84% year-over-year, Game7 found.
This year, Pitchbook dubbed blockchain gaming “forgotten but not gone” in its Q3 Gaming Report this year, arguing that while the initial hype cycle for such games has evaporated, some “significant titles” remain in development.
But what might 2024 have in store?
Some games will succeed—if they’re fun
NFT marketplace Magic Eden’s Chief Gaming Officer Chris Akhavan predicts that three Web3 games released in 2024 will be successful and popular enough that larger traditional game studios will take notice—and look to replicate that success.
“Non-Web3 game companies [will] once again kick off Web3 research and development efforts, and investors resume investing in Web3 games at meaningful volumes,” Akhavan told Decrypt.
Alec M. Wantoch, head of product at HyperPlay, a Web3-native game launcher and game store aggregator, also predicts that 2024 will be a year where many blockchain games finally release. We’ve seen more compelling games emerge in 2023, but many are unfinished or launched in early access. Still, they’re getting there.
“I think a lot of the industry has realized that these games need to be optimized for fun. We’re seeing a lot of new and innovative games that are indeed embracing the fun aspect, and that’s a good thing,” Wantoch told Decrypt.
“I also think we will see games continue to trend more in the Philippines and countries in Asia in general,” he continued. “We’ve already seen big interest in blockchain-based games in Asia. I should note that the technology is becoming smoother, and this will make gameplay a lot more immersive and interesting for users in 2024 and beyond.”
Josh Jones, co-founder and Co-CEO of open-world blockchain game Cornucopias, predicts that crypto game devs will prioritize the user experience and seek to keep potentially alienating blockchain jargon out of their games.
“Crypto gaming has thus far not found product-market fit,” Jones told Decrypt, adding that mainstream gamers expect a quality level that has not yet been seen in the crypto gaming market.
“For the coming year, games that really focus on elevating the user experience—that is, games that are fun, easy to use, and feature compelling storylines—will be a big theme. I also think we’ll see a lot of blockchain-based games trying to de-jargonize their terminology so that they are easy for both crypto-native and non-crypto users alike. So instead of saying ‘NFT,’ the term would be ‘in-game assets’ or ‘player-owned assets.’”
Jones sees crypto jargon as a deterrent to onboarding into Web3 games, and doesn’t think the narrative around crypto games will change until that does. The Cornucopias Co-CEO also emphasized that generative AI could improve games next year, allowing for more customization based on player choices.
“In 2024, I expect Web3 gaming to continue to see increased adoption,” shared OpenSea Head of Gaming Partnerships, Oliver Maroney.
“If I had to predict, we’ll likely see a couple of these titles reach more broad scale creators (and subsequently viewers) that will translate to an increased player base among these games and the ecosystems they’re a part of,” Maroney said. “As we saw with Fortnite and many of the biggest titles, content creators streaming and showcasing games are what really fuels the average gamer to get interested.”
Maroney also believes it’s possible more Web2 players will enter blockchain gaming in 2024, perhaps via established games that embrace crypto tech.
“I also think we see two or three large Web2 native IP and games that merge or make the switch to Web3 infrastructure layers,” Maroney added. “These will be catalysts for the space.”
Fully on-chain games will evolve
Ryze Labs research analyst Fred Li told Decrypt that on-chain games will lean toward being open-world games where players can make the rules.
“We anticipate the emergence of autonomous worlds reminiscent of Minecraft,” Li said. “People are not satisfied with merely being consumers of PGR (Professional Generated Rules) games; there’s a rising need to become creators in UGR (User Generated Rules) games. Fully on-chain games make it possible for people to create autonomous worlds.”
Li also predicts that 2024 and beyond will bring continued improvements to fully on-chain gaming infrastructure, but warned that fully on-chain games may struggle to meet expectations set by existing traditional games.
“We expect to see greater competition within the Web3 gaming space,” Li added.
Games will find an audience despite platform restrictions
Crypto IP firm Story Protocol’s CEO and co-founder Sy Lee predicts that in 2024, blockchain gaming will account for a dominant percentage of wallet activity, rising from its current range of making up roughly 30-40% of all decentralized app (dapp) transactions. Lee also believes that more and more game developers will support user-generated content and mods; games like Deadrop and Shrapnel have already placed heavy emphasis on enabling community-made game content.
Polygon Labs Head of Business Development Urvit Goel predicts that this year’s comparatively smaller funding rounds won’t stop a few great games from launching in 2024.
“In 2023, funding was down quite materially from 2022 and 2021—about 70% down year over year,” Goel said. “It’s a rough year for new stuff to get funded or existing teams to continue operations. Capital was tough.”
“As we see the rest of 2024 play out, we’ll see real games that are using blockchain,” Goel added.
While 2023 brought a slew of blockchain games to the Epic Games Store, one title, Gods Unchained, was delisted shortly after being added to Epic because the ESRB video game ratings board assigned it an “Adults Only” rating for its play-to-earn elements. It’s possible, according to the ESRB, that any game offering players items with “real-world value” like NFTs or crypto tokens could be assigned such a rating, which would bar them from consoles and potentially other platforms.
While Gods Unchained was relisted after Decrypt’s investigation into its Epic store removal and Epic said that it would no longer block games rated “AO” purely for blockchain integrations, such incidents are a reminder that distribution on third-party platforms isn’t guaranteed.
“That’s the next order problem,” Goel said of crypto games’ distribution question, adding that Web3-native game launchers could be one prevailing solution.
“If we get a great game, usually we’ll find a way to get it,” he said, suggesting that if a blockchain game is appealing enough to players, it will find an audience regardless of other potential restrictions.
Edited by Andrew Hayward
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Source: https://decrypt.co/210772/crypto-gaming-predictions-2024-breakout-year
