Gaming is Eating the World — and Web3 (Part II)
It’s no secret that this has been a tough year for crypto. The industry has lost billions in value as the market pulled back from the peaks of 2021.
But while the big DeFi shakeout takes place, one sector within Web3 has continued to post growth and defy market trends: Gaming.
In Part One of this series, we covered the “why” — why gaming is such a compelling industry, as it speaks to our psychology and how humans are wired.
In this piece, we’ll be exploring the “what” — which companies are quietly building and holding strong throughout the storm.
Defying the Slowdown
In June 2022, amidst a clear market slowdown, DappRader pointed out that blockchain gaming was “fiercely defying the bear market.” In fact, the publication called such dapps the “strongest vertical resisting the market crash.”
Since then, others have echoed this sentiment — and put their money where their mouths are.
This September, Framework Ventures cofounder Michael Anderson told Decrypt that he believed crypto gaming will become “one of the largest forms of employment in the world” and would usher in the next 100 million users to Web3.
Indeed, Framework has earmarked nearly half of its $400 million fund to investments within blockchain-based games. And it has led major funding rounds in the space, such as a $30M Series A this October for Web3 gaming creator platform Stardust.
Others are seeing growth too. Immutable X, a Web3 gaming platform , launched a $500M fund earlier this year targeted at boosting adoption. It recently reported that it’s posting historic growth too, having onboarded more games in Q3 of 2022 than it has in its entire lifetime.
Another key sign of market strength is when major developers start delving into things. And just this fall, a slew of heavy hitters have entered the market.
First there’s Epic Games (EG). While most people know them as the developer of Fortnite, fewer know they are one of the biggest gaming companies in the world. The company is worth an estimated $4 billion, and it has developed some of the most popular all-time favourites, including the Gears of War franchise and Infinity Blade.
Based on recent reports, the ecosystem has over 194 million users and is continuing to grow, with users spending millions of dollars yearly on the company’s 470 odd strong list of titles.
This September, the developer listed its first two NFT games, Blankos Block Party and Star Atlas. Blankos Block Party is live and offers a free-to-play, open-world multiplayer concept, styled like a giant block party with collectible digital vinyl toys — each “Blanko” is an NFT that lives on the blockchain.
In October, EG announced and launched a demo of its space-themed strategy game, Star Atlas. It is meant to be a highly realistic and immersive MMORPG based in the year 2620, where players act as faction citizens of Star Atlas, part of an intergalactic conflict. Star Atlas will be built on Solana with a blockchain-based economy, along with a Decentralised Autonomous Organization (DAO) where players can participate in political gameplay and voting.
Next up is Brendan Greene, of PUBG
Breandan Greene is an Irish video game developer best known for his work on PUBG: Battlegrounds. PUBG has logged over one billion downloads on iOS and Android, plus 75 million more from its PC and console entries. Many credit it with popularizing the battle royale format alongside Fortnite, and today it boasts nearly 30 million daily players.
This September, in an interview with Hit Points, PlayerUnknown shared that his next project will be a new blockchain-based game called Artemis that will have NFTs and a metaverse.
Finally there’s David Jones of Grand Theft Auto.
David Jones is a Scottish video game programmer and entrepreneur, behind massive franchise titles like Grand Theft Auto, Lemmings, Crackdown, and APB: All Points Bulletin. Very few developers have had as many hits as Jones. Grand Theft Auto V alone has garnered over $6 billion in lifetime revenue, with over 155 million units sold worldwide.
This September, Jones backed blockchain gaming studio Random Games in a $7.6 million funding round and will also act as an advisor to the company. Random Games plans on creating an interoperable gaming franchise named the Unioverse.
The list goes on. South Korean gaming giant NCSoft (behind titles like Blade & Soul, Aion, and Guild Wars) just invested $15 million into Mysten Labs, which is developing infrastructure for Web3 gaming.
There’s smaller companies too, like Xternity, another blockchain-focused gaming platform which closed $4.5 million.
The Road Ahead
When looking at the communication from these developers, it’s clear to see that many can see the massive opportunity within Web3 games and are making the long-term play.
Epic Games, for example, has explained that Star Atlas will be released iteratively through game modules in both web and Unreal Engine 5 (the latest version of Epic Games’ creation platform) over the next 5–7 years, signalling that the major developer is bullish on the long-term future of blockchain-based gaming.
There’s no doubt that it’s been a tough year, and we do hope that everyone is keeping well. Here at STEPN, we hope to be a source of reassurance as we continue building, and hope that gaming as a whole category can continue to be a bright spot in the industry.
Ultimately, the up-and-down tides of the market will wash away what wasn’t built to last. In the end, the projects that truly deliver value will stand the test of time.
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