Author: Stella L (stella@footprint.network)

Data Source: Footprint Analytics Games Research Page

September saw blockchain game tokens’ market cap surge by 29.2%, reaching $23.2 billion, while daily active users (DAUs) increased by 12.3% to 4.7 million. A standout trend was the dramatic shift towards Telegram-based games, sparking intense competition among blockchain networks and centralized exchanges for user acquisition. However, this boom raised questions about sustainable on-chain engagement.

Meanwhile, regulatory challenges emerged in new areas, and some established projects reconsidered their blockchain integration strategies. As the industry navigates these dynamics, the focus remains on creating sustainable, engaging experiences that leverage blockchain technology effectively.

Crypto markets demonstrated robust performance in September. Bitcoin opened the month at $57,429 and closed at $63,485, reflecting a substantial 10.5% increase. Ethereum, while positive, continued to lag behind its larger counterpart. Ether started at $2,426 and finished at $2,603, marking a 7.3% increase. Notably, the ETH/BTC price ratio reached a new cycle low of 0.0386 in mid-September.

Source: BTC Price & ETH Price

Several key factors contributed to this positive market sentiment:

Monetary Policy Shift: On September 18, the U.S. Federal Open Market Committee (FOMC) surprised markets with a larger-than-expected 50 basis point (bp) rate cut. Later in the month, Chinese policymakers implemented macro stimulus measures, providing support to global equities.

Regulatory Advancements: The U.S. regulatory landscape showed signs of improvement. The SEC approved an application for the listing of options on spot Bitcoin ETPs (Exchange-Traded Products), with expectations that others will follow suit.

Institutional Adoption: In a move that could further legitimize cryptocurrencies in the financial sector, Bank of New York appears poised to offer crypto custody services.

Political Support: The political backdrop also showed positive shifts. Former President Trump announced a new DeFi protocol, while Vice President Harris made supportive comments about digital assets and blockchain technology.

September witnessed a rebound in the Web3 gaming sector, aligning with the broader crypto market’s upward trend. The market cap of blockchain game tokens surged from $18.0 billion to $23.2 billion, marking a substantial 29.2% increase. This recovery, following last month’s considerable decrease, demonstrates the sector’s correlation with macro crypto market movements.

Source: Games & Bitcoin Market Cap

User engagement continued its positive trajectory, with daily active users (DAUs), measured by unique wallets, rising to 4.7 million in September. This 12.3% increase from August was primarily driven by heightened activity on the opBNB network.

Source: Web3 Game Daily Active Users

Transaction metrics also showed improvement, with average daily transactions in blockchain games reaching 9.1 million, a modest 2.5% increase from August.

Source: Web3 Game Daily Transactions

However, daily trading volume for blockchain games experienced a 22.9% decrease, settling at 13.1 million. It’s worth noting that this figure excludes several abnormal data points from internal wallet transfers within the same game on September 13, 17, 25, and 27.

Source: Web3 Game Daily Trading Volume

The spotlight in September shifted dramatically towards Telegram-based games. This shift is occurring on two fronts:

On one hand, blockchain expansion: Beyond TON, multiple blockchain networks are now vying to capture users from the Telegram ecosystem, expanding on the trend we observed last month. BNB Chain, for instance, has integrated with Telegram to provide seamless access for users and developers.

On the other hand, CEX competition: Centralized exchanges (CEXs) are aggressively competing for Telegram traffic, recognizing its potential as a user acquisition channel. Binance, in particular, has made bold moves by listing four Telegram and TON tokens in quick succession. September saw the announcement of the 58th project on Binance Launchpool, Hamster Kombat (HMSTR), and the 59th, Catizen (CATI), following August’s launches of Toncoin (TON) and Dogs (DOGS). Other exchanges, like Bitget, are making strategic investments, such as a $30 million injection into The Open Network (TON) blockchain.

Catizen

The trend extends beyond exchanges, with various entities and projects launching their own Telegram-based initiatives. Binance is set to launch a Telegram mini-app game called Moonbix, while CryptoKitties has announced a Telegram game titled “CryptoKitties: All The Zen.”

Bybit CEO Ben Zhou provided insights into the impact of these initiatives during Token2049 Singapore 2024: “Some tokens brought in millions of new registrations, with 400,000–500,000 of those becoming deposit users. These new users are primarily coming from Eastern Europe, Africa, South Asia, Nigeria, India, and a few European countries.”

TON has effectively established a user acquisition pipeline with exchanges, inspiring similar strategies across the industry. However, there are signs that the acquisition effect may be diminishing, as the same users might be cycling between projects.

While these games excel in user acquisition, their contribution to on-chain activities appears limited. Most only have their tokens on-chain, with gameplay and assets remaining off-chain. This structure raises questions about long-term sustainability and economic viability.

The data suggests a disconnect between user acquisition and sustainable on-chain engagement. Without continuous on-chain user activity, these games and developments may struggle to maintain economic viability in the long run. As the industry evolves, bridging this gap between initial attraction and sustained blockchain engagement will be crucial for the healthy growth of the Web3 gaming ecosystem.

In September, the number of active games across blockchain networks rose to 1,563, marking a 4.5% increase from August. The market leaders remained consistent, with BNB Chain, Polygon, and Ethereum holding shares of 22.0%, 18.6%, and 14.8%, respectively.

Source: Active Games Shared by Chain

The DAU landscape saw dramatic changes, with opBNB, Ronin, and Nebula (a SKALE subnet) emerging as the top performers, averaging 1.1 million, 1.1 million, and 457.9K DAUs respectively. By the end of September, these chains commanded DAU market shares of 28.2%, 20.1%, and 9.2%, respectively.

Source: Daily Active Users by Chain

opBNB demonstrated remarkable growth, with its average DAU in September surging by 62.0% from August. Its market share expanded from 22.4% to 28.2% throughout the month. This growth was driven not only by the popular game SERAPH: In The Darkness but also by new entrants like Elfin Metaverse, an eSports gaming platform and open-world metaverse launched in mid-September.

Conversely, Ronin experienced a continued decline in its DAU market share, dropping from 29.5% to 20.1% over the month. This downward trend was primarily attributed to the performance of Pixels, which saw its DAU fall from over 700K to 470K. Notably, while Ronin’s average DAU in August was nearly double that of opBNB, September saw opBNB overtake Ronin, marking a significant shift in the competitive landscape.

Sui’s average DAU increased by 48.4% to 92.4K, driven by the Telegram game BIRDS, which accumulated 621.5K users within its first week of launch. This success underscores the growing trend of blockchains leveraging Telegram for user acquisition.

Core’s average DAU rose by 66.9% to 61.8K, boosted by the Core Ignition Drop Season 2, which expanded to include Web3 games alongside BTCFi. Games like World of Dypians and Pixudi played crucial roles in attracting users to the Core ecosystem.

Pixudi

The competition among blockchains for games and users continues to intensify. A notable development is the ongoing discussion within the Treasure DAO community regarding a proposal to migrate their Web3 gaming ecosystem from Arbitrum to ZKsync. This potential move is largely attributed to delays in Arbitrum’s “Gaming Catalyst Program,” which proposed allocating 200 million ARB tokens over two years to incentivize game development on the blockchain.

The blockchain gaming universe expanded to encompass 3,448 games, with 1,295 actively engaged. Significantly, 285 games attracted over 1,000 monthly active on-chain users (MAU), representing 8.3% of all games and 22.0% of active games. This distribution highlights the ongoing challenge of user retention and engagement in the blockchain gaming space.

Source: Monthly Active Web3 Games

The blockchain gaming sector faced new regulatory scrutiny in September, extending beyond the usual focus on CEXs, stablecoins, and DeFi. A notable case involved Sorare, a fantasy sports company, which was charged with providing unlicensed gambling facilities in the UK. This case highlights the growing attention from regulators on blockchain-based gaming platforms, particularly those that blur the lines between gaming, gambling, and digital asset trading.

September also witnessed notable exits from the blockchain gaming space. Dimensionals, a roguelike deck-building game by Mino Games, officially transitioned to a purely Web2 model, abandoning its initial blockchain and NFT integration. This shift is particularly significant given Mino Games’ substantial backing from venture firms like Andreessen Horowitz (a16z), Y Combinator, and Standard Crypto, with total funding of $18.2 million.

The project’s web3 journey, which began with the Genesis Stone collection launch in March 2023, faced numerous challenges including bot-overwhelmed whitelist giveaways and DDoS attacks. This transition from Web3 to Web2 by a well-funded project raises important questions about the challenges of integrating blockchain technology into traditional gaming models and the long-term viability of certain web3 gaming approaches.

Increasing regulatory scrutiny and technical implementation difficulties are forcing companies to reassess their strategies. Successful projects will need to navigate regulatory compliance, ensure robust security, develop engaging gameplay that justifies blockchain integration, and balance the expectations of both traditional gamers and crypto enthusiasts.

September saw Web3 gaming secure $65.6 million in investment across 13 funding events, marking a 6.6% increase from August. Three of these events did not disclose their funding amounts.

Web3 Gaming Industry Funding Rounds in September 2024 (Source: crypto-fundraising.info）

In a significant development, E-PAL, the gaming and social companion platform, unveiled Balance, its new AI-powered blockchain experience platform. This launch follows two successful funding rounds led by industry titans a16z and Galaxy Interactive. The substantial investment will primarily fuel the development of the Balance infrastructure, a critical step in E-PAL’s ambitious mission to construct an open, inclusive, and equitable Web3 ecosystem. This move underscores the growing convergence of AI, blockchain, and social gaming platforms.

Speaking of a16z, their dedicated gaming fund, Game Fund One, is making waves nearly two years after its $600 million launch. The fund has announced plans to invest $30 million in multiple gaming-related tech startups, with a focus on cutting-edge sectors including AI, VR/AR, and Web3 games. This initiative opens up exciting opportunities for innovators, with applications accepted from August 26th through September 30th, 2024. The program, set to kick off in January 2025 in San Francisco, promises a comprehensive support system for selected startups. Participants will benefit from expert speakers, personalized coaching, and a substantial $750,000 investment per startup, leveraging the expertise of the a16z SPEEDRUN team.

The month also saw intriguing innovations in the gaming and blockchain space securing funding.

Puffpaw, an innovative platform combining health initiatives with blockchain technology, has secured $6 million in seed funding. Their unique “vape to quit smoking & earn” model, built on Berachain, represents a novel approach to incentivizing positive health behaviors through blockchain rewards.

Universal Health Token (UHT) is pushing boundaries by gamifying healthcare through blockchain. They’ve successfully raised $1.2 million in a pre-seed round, attracting investments from industry leaders including Animoca Brands and Polygon. This project exemplifies the growing trend of applying gaming and blockchain principles to traditionally non-gaming sectors, potentially revolutionizing health engagement and management.

Data for this report was obtained from Footprint’s Games Research page, a real-time dashboard with comprehensive and trusted Web3 game stats. Please contact us if you notice any chain or game not included and would like it integrated. You can also submit contracts here.

About Footprint Analytics

Footprint Analytics is a comprehensive blockchain data analytics platform that simplifies complex analysis for businesses and projects in the Web3 ecosystem. It offers tailored solutions that eliminate the need for extensive expertise and infrastructure maintenance. The platform provides long-term growth tools designed to help build and manage communities step by step, emphasizing sustainable growth and user loyalty. By combining powerful analytics with community management tools, Footprint Analytics enables projects to leverage blockchain data effectively for decision-making and growth strategies across various sectors including GameFi, NFT, and DeFi.

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