2024 Web3 Gaming Industry Trends Depth Insights

Web3 games have always been regarded as a key track to unlock the next traffic entrance in the Web3 industry. As the crypto market gradually warms up, Web3 games are showing some new development characteristics. For example, projects are improving in terms of gameplay and playability; the types of Web3 games are constantly innovating; and projects are gradually evolving towards platformization and ecosystem development, enhancing their risk resistance capabilities.

This article will provide an in-depth insight into the development trends of the Web3 gaming industry in 2024 from four aspects: industry overview, ecological panorama, development trends, and talent supply.

1. Industry Overview: A Three-Year Review of the Web3 Gaming Industry from 2021 to 2023

1. Market Size

From 2021 to 2023, the trading volume in the blockchain gaming industry remained relatively stable, with explosive growth in the first quarter of 2024. In 2021, the number of daily unique active wallets for Web3 games exceeded 1.4 million, accounting for 49% of the total wallet address usage in the entire cryptocurrency industry. In 2022, Web3 games attracted 1.15 million active wallets, maintaining the same share. The share declined in 2023. In the first quarter of 2024, the number of daily active wallets reached a historic high, averaging over 2 million per day, accounting for 30% of the total in the industry.

In 2023, there are over 3 billion game users worldwide, with a market size approaching $2,196.8 billion, of which Web3 games generate $5.2 billion in revenue. Although the number of users participating in Web3 games is still negligible compared to traditional Web2 games, the market for Web3 games has enormous growth potential with continued growth and the arrival of a bull market in 2024.

( 2. Development History

The focus of Web3 games has shifted from the early emphasis on "Fi" and "material rewards" to a greater mention of "gameplay" and "playability" today. Based on their development history, Web3 games can be divided into four categories:

• Focused on early Web3 games in Fi, with the core being Fi, collectively referred to as GameFi.
• Users participate in daily game activities to earn material rewards in the X to Earn)X2E### game.
• AAA games focused on high-quality graphics and playability to attract players
• Metaverse games that build virtual worlds

Therefore, to develop a successful GameFi ecosystem, it is necessary to go beyond the basic principles of DeFi, develop a complex in-game economy, and prioritize user experience in game design.

( 3. Financing and Fundraising

Between 2021 and 2023, the Web3 gaming industry attracted a large amount of investment and financing. The year 2021 can be regarded as the inaugural year for Web3 gaming financing, as traditional venture capital firms, cryptocurrency funds, and angel investors actively participated in investments within the industry. In 2022, global financing for Web3 gaming reached a historical peak, with investment amounts soaring to nearly 10 billion USD.

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( 4. Challenge Risk

From the perspective of the game itself, although Web3 games have begun to focus on improving gameplay and playability, the high-quality game content in the market from 2021 to 2023 is still lacking. The excessive Fi-ization of games makes it difficult for the industry to cope with market fluctuations and the risks of speculative behavior. The lack of usability and a friendly user interface also limits the participation and adoption of the general public. How to "break the circle" remains to be explored.

According to Game7 Research data, currently, more than half of Web3 games are developed by independent producers or small teams, while AAA or AA level productions only account for 6%. Some projects focus too much on the technical and economic aspects, neglecting the excellence, innovation, and diversity of game design and content. This may lead to player attrition and market saturation risks, limiting the long-term development of the industry.

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2. Industry Ecosystem: Web3 Game Ecosystem Panorama

( 1. Upstream - Infrastructure

Game public chains, as the most important infrastructure, are accelerating their layout, presenting a diverse and vibrant state. Currently, the public chains supporting Web3 games are mainly divided into three types: general public chains, Appchains, and game-specific chains.

When refined to the data level, the three categories of gaming public chains show distinct performances in terms of scale, user participation, and transaction levels. The number of on-chain projects can reflect the attractiveness and developmental vitality of public chains. Currently, the top three public chains for on-chain Web3 games are BNB Chain)28.9%###, Ethereum(22.6%), and Polygon(14.8%), with a total of 66.3%, accounting for half of the Web3 games.

The number of active on-chain users is one of the important indicators of user engagement. From the daily user data, the Web3 game users on public chains are mainly divided among Ronin(27.35%), Polygon(16.92%), Near(12.58%), and Klaytn(8.56%).

The trading volume can indicate the liquidity and trading activity of assets. From the perspective of trading volume share, the top 4 chains in the sector with the best trading performance are Wax(76%), Hive(8.2%), Sui(2.8%), and BNB Chain(2.3%).

Overall, the gaming public chain presents a situation of three-way division. The BNB Chain and Avalanche, which adopt the EVM Sidechains model, along with Polygon combining sidechains and Layer2, as well as Appchain-Wax and Hive, all show impressive performance.

( 2. Midstream - Game Release

An increasing number of platforms are beginning to target the positioning of Web3 game aggregation and distribution, aiming to bypass traditional Web2 centralized distribution channels and build a mutually beneficial bridge between game developers and users.

More and more platforms aim to become the "Steam of Web3", competing for dominance in Web3 game distribution. Compared to traditional Web2 games, Web3 game distribution platforms are designed to empower users through decentralization, thereby promoting a more player-centered and community-driven gaming ecosystem that places greater emphasis on user participation.

) 3. Downstream - Game Community

Unlike Web2 games, communities play a crucial role in the Web3 gaming ecosystem. In Web2 games, large communities sometimes strongly oppose certain updates or policy changes; however, in most cases, game studios respond little to this. In terms of Web3, mechanisms such as community governance voting in games enable users to directly influence the development of the project.

For Web3 games, the community represents the ecosystem of interaction and cooperation formed between players and project parties. This economic ecosystem incentivizes player participation and contributions, increasing the sustainability and appeal of the game.

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3. Industry Trends: Reviewing the New Changes in the Industry for 2024

( 1. The gameplay and playability of Web3 games have improved, and "gold farming" is no longer the only objective.

At this stage, Web3 games are advancing towards high-quality graphics, rich content, and excellent player experiences, even moving towards AAA production, aiming to attract more Web2 players by enhancing the playability of games. For example, BigTime, Illuvium, BLOCKLORDS, and Shrapnel are all promoting themselves as AAA-level Web3 games.

The driving force behind the promotion of Web3 games mainly comes from two aspects: first, the unsustainability of the excessive focus on Fi; second, the competitive pressure from peers breaking into Web2.

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( 2. The types of Web3 games are becoming increasingly diverse, with RPGs, action, strategy, and casual games being the most favored by developers.

Compared to the previous period, the types of Web3 games will continue to improve. As the industry develops, the types of games are becoming increasingly diverse, including but not limited to the following types:

1. RPG) Role-Playing### Game
2. Action Game
3. Strategy Game
4. Casual Games

The diversity and innovation of game types in the Web3 gaming field are still evolving. With technological advancements and changes in user demands, more novel game types and gameplay may emerge.

( 3. Web3 game projects are accelerating their evolution towards platformization and ecologicalization.

Web3 games are evolving towards platformization and ecologization to extend their lifecycle and strengthen links and integration with other sectors. On one hand, based on past market performance, each Web3 game has a lifecycle, and the duration of that cycle is influenced not only by the game's own factors but also by the overall trends of the Web3 market. In comparison to single game projects, gaming platforms and ecosystems have stronger risk resistance capabilities, longer lifecycles, and greater room for trial and error as well as development potential.

On the other hand, the platform is the best way to gather resources and connect the internal and external cycles of games. A Web3 game information aggregation platform is an important tool for players to access games, promoting a positive match between the game ecosystem and players.

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( 4. The community ecology of Web3 games may disrupt the traditional profit distribution model of the gaming industry.

The traditional Web2 gaming industry's profit distribution model is relatively centralized, with the power concentrated in the hands of a few leading companies. In contrast, Web3 games bring together diverse roles such as players, beneficiaries, and investors, introducing token economics and a complex economic system. This not only reshapes the profitability model and interaction methods of games but also centers the gaming economic ecosystem around decentralization and community interaction.

In contrast, the revenue distribution model of Web3 games is more decentralized. Players, publishers, and developers collaboratively create and distribute revenue, and this decentralized model provides a fairer and more transparent profit distribution mechanism for players and developers, while also enhancing the importance of community participation and decision-making.

In addition to a sustainable game economic system, the role of the community in Web3 games is becoming increasingly important, and a strong community is a key competitive advantage of Web3 games.

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4. Talent Supply: Productivity and Production Relations in the Era of Web3 Games

( 1. Production Release Energy: The Innovative Production Engine under the Web3 Game Technology Revolution

The gaming industry has always been at the forefront of technological innovation. Modern games are a combination of art and complex technology. After decades of development, an industrial path has formed, ranging from upstream foundational technology development, to midstream game content development and publishing, to downstream game distribution.

The Web3 technological revolution in the gaming industry brings new technologies, new key production factors, the development of new infrastructure, and emerging industries.

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( 2. Paradigm Evolution: The Production Relations and Institutional Reforms of Web3 Games

The emergence of new productive forces has not only brought about changes in productivity and socio-economic aspects but has also triggered profound transformations in production relations and social systems.

Web3 games are characterized by decentralization, openness, and practicality, and are reshaping human communities, enterprises, labor, and organizations. Based on blockchain technology and smart contracts, Web3 achieves the decentralization of organizational power, allowing anyone to create DAO communities and organizations around their own projects.