Game On Despite The Bear Crypto Market
Terra, what was then the second largest DeFi ecosystem, collapsed in May 2022 – A crash that bankrupted many investors and pulled down the entire crypto market with it. Over $400 billion in value was wiped out in terms of crypto market capitalization. [source] This crash applied downward pressure on the crypto market, dragging down Bitcoin, Ethereum, and the rest of the market with it. Meanwhile, the NFT market shows a 67% decline in trading volume and 21% in the number of transactions since May. [source]
In this “crypto winter,” in which mainstream investors lose interest and values remain low for months, there is one sector braving all odds.
DappRadar’s latest report claims that blockchain gaming is defying the crypto winter with its upward trend.
Covid-19 has transformed the way people interact forever, and thus had a significant impact on the gaming industry. With initial shelter-in-place procedures, many turned to games for entertainment and as a means to stay connected with friends and socialize virtually.
In 2020, gaming quickly emerged as one of the most popular activities as user engagement and spending surged between February and April of that year. Worldwide gaming spending on in-game content increased by 12 percent year-over-year. [source]
And this has undoubtedly garnered interest in the blockchain gaming industry, which even a crypto bear market could not discourage.
Many verticals of the crypto industry are facing the blows of macroeconomic pressures. While the collapse of the Terra ecosystem led to effects which caused a pullback across DeFi and NFT markets, the real winners during the bear market seem to be blockchain games, which grew by close to 10% since Q1. [source]
According to DappRadar x BGA games report Q2 2022, the gaming sector exhibited a bullish trend in July 2022 [source]:
Gaming accounted for up to 60% of blockchain activity in July.
Gaming in July saw approximately one million daily unique active wallets (UAW). The number rose to 57.3%, up from 52%, month-on-month.
The value of transactions made in this segment were recorded at $857 million.
Successful blockchain games showed a tendency to retain players, which indicates genuine engagement.
Over in gaming-related activity are virtual world NFTs, which saw their trading volume rise by 97% since the last quarter.
(Read: Do NFTs Have a Future in Gaming?)
The high usage implied by the number of active wallets was interpreted by investors as “a bullish signal to keep investing in blockchain games, says DappRadar.
The report states that the number of investments into blockchain games and metaverse projects has remained constant quarter-over-quarter, with $2.5 billion invested in both Q1 and Q2. This maintained the pace set in the first quarter, and already surpassed the annual milestone of $4 billion set in 2021.
Pointing to a new $4.5 billion crypto-focused fund by VC giant Andreesen Horowitz as a major source of future investments into the space, the report states that if this pace continues, we are projected to have a volume of $12 billion invested by the end of the year.
Pedro Herrera, Head of Research at DappRadar, commented that blockchain games have become “one of the most promising sectors of Web3.”
He added that the amount of capital raised, along with an “exodus of talent shifting from the leading traditional gaming companies to web3 game startups,” are other positive signs for the sector going forward.
“We are gradually seeing how Immutable-X, Gala Games, and other networks are positioning themselves to lead the rising category in years to come with impressive partnerships already in place,” Herrera said.
With such an exciting trajectory, we need a secure and seamless authentication method and wallet for the next generation of Web3 gamers. Magic has helped companies like Immutable X simplify the onboarding process for gamers onto their platform.
Magic Auth is a developer SDK that integrates with your application to enable passwordless onboarding (no seed phrases) and authentication using magic links such as email, social logins. Magic enables fully-customizable, secure passwordless login for Web3 onboarding that you can plug-and-play on top of your existing platform. Integrate Magic Auth to get your existing and new gamers entering your gaming platform in no time.