Author: flowie, ChainCatcher
Editor: Marco, ChainCatcher
It seems that Web3 games are entering a strong recovery phase.
Recently, with the social mini-game Notcoin (NOT) backed by 900 million active Telegram users being listed on two major exchanges, Binance and OKEx, Web3 games have once again attracted significant attention in the cryptocurrency market.
According to Jack Booth, the market director of the TON Foundation, Notcoin achieved 6 million daily active users during the mining phase, nearly 35 million users within 3 months, compared to the peak of 2 million daily active users for the first-generation Web3 game king, Axie Infinity.
On May 16th, official data from Notcoin showed that its market value exceeded 8.2 billion USD just one hour after being listed on various exchanges.
In addition to Notcoin's astonishing growth, the April blockchain game report released by DappRadar and the Blockchain Game Alliance showed a significant growth trend in the entire chain game market, with an average of 2.9 million daily unique active wallets (dUAW), a 17% increase compared to March.
Furthermore, the DappRadar report indicated that the investment scale in the blockchain game field reached 988 million USD in April, setting a new high since January 2021.
Two Major Venture Capital Funds Raised Nearly 900 Million USD, Boosting the Web3 Game Reserves
The total investment in Web3 games in the first quarter of 2024 was around 2.88 billion USD, and the total investment in April suddenly doubled, mainly due to the completion of a new round of fundraising by two major venture capital firms, a16z and Bitkraft Ventures.
On April 17th, a16z announced the successful raising of a huge new fund of 7.2 billion USD, of which 600 million USD will be allocated to the gaming industry, including companies developing new games, gaming platforms, gaming-related technologies, or other gaming industry innovations.
Regarding the use of the 600 million USD investment in the gaming industry, Andrew Chen, a general partner of a16z and head of a16z's gaming fund, Games Fund One, revealed that it will be used to create a second gaming fund covering more diverse areas: from AI, Web3 games, VR/AR, 3D tools, gaming apps to studios, and more.
Earlier, Andrew Chen had also announced that through the a16z Speedrun program, they would collectively invest 30 million USD in multiple gaming companies by May 19th, including Web3 games, with each participating startup receiving 750,000 USD.
RootData data shows that Web3 games are the second largest investment area in a16z's crypto investments, second only to infrastructure, and have already invested in at least 25 Web3 games.
Since the beginning of this year, a16z has participated in two investments in Web3 games, one being a 13 million USD Series A financing for the NFT shooting game MadWorld, and the other being an 8 million USD financing for the gambling ecosystem developer MyPrize.
In addition to a16z, another venture capital firm, Bitkraft Ventures, announced in April the launch of its third gaming fund, which has raised 275 million USD and will focus on seed and Series A stage game studios, technologies, and platforms.
Bitkraft Ventures recently announced the addition of two new executives to expand the Asian Web3 game market, namely Jin Oh, former president of Riot Games and CEO of Garena, and Jonathan Huang, former vice president of Temasek.
Bitkraft Ventures has been very active in investing in Web3 games. In 2021, Bitkraft Ventures raised 75 million USD and launched its first token fund for investing in blockchain games and the digital entertainment sector. At the end of March 2023, Bitkraft Ventures raised 220 million USD for its second "token fund".
As of now, Bitkraft Ventures has publicly announced nearly 50 investments, the vast majority of which are in the field of Web3 games, with representative cases including YGG and Immutable.
Since the beginning of this year, Bitkraft Ventures has participated in the investment of four gaming projects: Metalcore, MadWorld, Avalon, and My PetHooligan, with MadWorld being co-invested with a16z.
Record High Daily Active Users, Which Web3 Games Are the Leaders?
While the overall cryptocurrency market is in a downturn, the active users of Web3 games are on the rise.
Robin Guo, a gaming investor at a16z, quoted Footprint Analytics on social media, exclaiming, "The MAU (monthly active users) of Web3 games is 3.3 million, far exceeding the peak created by Axie. If the data has not been cleaned, I am sure many of them are bots, but the recent growth led by Pixels is still impressive. It feels like this is really being overlooked."
According to DappRadar's report, the dUAW (daily unique active wallets) of Web3 games reached 2.9 million in April, setting a new historical high.
Among the top ten Web3 game applications ranked by UAW (unique wallet addresses), all have exceeded 1.5 million. Pixels still maintains a dominant position, with UAW exceeding 20 million, followed closely by Sweat Economy and StarryNift, both with UAW exceeding 5 million.
Most of these 10 games were launched around 2020 and 2021.
Pixels is a pixel-themed farming game launched in 2021, which migrated from Polygon to the Ronin network at the end of last year. Ronin is an Ethereum Virtual Machine (EVM) chain developed by Sky Mavis, the developer of Axie Infinity. The growth of Pixels has also made Ronin the most active gaming chain at present.
In February this year, Pixels was listed on Binance, and as of May 21st, its fully diluted market value is around 19 billion USD. Recommended reading: Pixels' Two-Year Anniversary: Shouldering the Metaverse Pixel Farm Chain Game of the Ronin Ecosystem
Sweat Economy is a move-to-earn game with a fitness theme, which is a small game transformed from a traditional fitness app with 100 million users. Sweatcoin is built on the Near chain.
StarryNift is an AI-enhanced co-creation metaverse platform that provides immersive 3D virtual experiences for gaming, creation, and social interaction. The founder of StarryNift was a founding partner of Matrix and co-founder of DEx.top. StarryNift has completed three rounds of financing, with investors including OKX Ventures, SIG Haina Asia Venture Capital Fund, Binance Labs, GBV Capital, BNB Chain Fund, Alameda Research, LD Capital, CoinGecko Ventures, and others.
Another World was founded in 2021 and is a Korean Web3 metaverse project built on the Klaytn chain, originally named Terra World, and has just completed its public beta testing. According to public reports, Another World has received support from the Korean Kakao Group and LG Group, and has a large global user community of 200,000 and a strong blockchain token system.
Alien Worlds is a space exploration game that combines DeFi, NFT, and DAO. In 2021, it received a 2 million USD investment from participants including Animoca Brands and LD Capital. As of May 22nd, its token TLM has a fully diluted market value of over 100 million USD. Recommended reading: Understanding Alien Worlds in Three Minutes: A Space Exploration Game Combining DeFi, NFT, and DAO
MotoDex is a motorcycle racing game built on the Ethereum sidechain SKALE. According to DappRadar data, its UAW in the past 30 days has exceeded that of Pixels.
Nine Chronicles is a decentralized RPG that has completed two rounds of financing, with participation from Binance Labs and Animoca. As of May 22nd, the fully diluted circulating market value of Nine Chronicles' token WNCG is around 70 million USD.
Apeiron is a card battle and deity simulation game that announced its migration to the Ronin network in December last year. In 2022, it completed a 10 million USD seed round of financing led by Hashed. On February 28th, the Apeiron Arena open beta was released on the Epic Games Store, allowing players to participate in competitive gaming and earn ANIMA airdrop points. Its token APRS is listed on Bybit and the decentralized exchange Katana on the Ronin blockchain, with a fully diluted market value of 5.8 billion USD as of May 22nd. Recommended reading: Exploring Apeiron: Disrupting Traditional Blockchain Games, Integrating Mythology and Modern Gameplay
Ultiverse is an AI gaming platform with a strong lineup of investors. It has completed three rounds of financing, raising a total of 135 million USD, with two rounds of financing involving Binance Labs, as well as participation from IDG Capital, Animoca Brands, DWF Labs, and other well-known investment institutions. On May 3rd, Ultiverse's gold chip NFT24-hour trading volume exceeded 1100 ETH, ranking first on the BLUR trading list.
World of Defish is a decentralized NFT game world running on the BNB chain, incubated by the decentralized IDO platform Poolz and receiving investment from Poolz Ventures.
In addition to these 10 high-UAW Web3 games, the shooting mobile game Matr1x also had outstanding monthly activity in the past 30 days. Matr1x received strategic financing from Animoca in February and had previously completed three rounds of financing, with participation from well-known institutions such as OKX Ventures, SevenXVentures, Folius Ventures, ABCDE, and Hashkey Capital.
Conclusion
Although there are popular games like Pixels and Notcoin in this bull market, there still seems to be some gap compared to the phenomenon-level games like Axie and STEPN that led the new paradigm of Web3 games at the time.
From 2022 to 2023, the hotspots for venture capital investment in Web3 games were trying to create AAA blockbuster games that provide a Web2 gaming experience and striving to fully integrate game logic and assets onto the blockchain in full-chain games.
Currently, AAA chain games are questioned for being capital speculation due to their high production costs and long landing cycles. On the contrary, lightweight games like Notcoin have attracted a large amount of traffic. Will the next phenomenon-level Web3 game be born in social mini-games?
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