Journalist
Posted:
- Blockchain gaming revenues were a fraction of those of the traditional video game industry.
- With 1.16 million unique active users at the time of writing, the sector captured 33% of the dApp market.
On-chain gaming has become one of the fastest growing verticals in the blockchain sector and has attracted a lot of interest from enthusiasts over the years.
The prospect of decentralized ownership of in-game assets and the ability to trade them outside the gaming world added a new dimension to one of the most exciting technology industries today.
On-chain gaming set to expand
According to a recently published report According to Binance Research, the blockchain gaming market witnessed a revenue of $7.8 billion by 2023.
The industry was forecast to grow at a compound annual growth rate (CAGR) of 70.3% to over $22 billion by 2025.
Source: Binance research
While these figures were indeed impressive, we should not lose sight of the fact that the sector was still in its infancy.
As you can see in the chart above, blockchain gaming revenues were a fraction of those of the traditional video game industry.
To understand the difference, for every 1,000 players on Minecraft, the best-selling video game of all time, there was only 1 player on Alien Worlds, one of the most popular blockchain games.
However, on-chain game developers gambled on relative advantages over traditional counterparts to drive adoption.
Advantages over Web2 gaming
As highlighted in the report, the decentralized nature would ensure that in-game assets continue to exist even if the game publisher goes bankrupt. This was in contrast to Web2 games, where the failure of the centralized entity meant the end of the game as a whole.
Furthermore, the interoperability feature would allow users to transfer the assets they earned in one game and use them in another, or even outside the game world. A traditional gaming setup confines users in a controlled environment.
Current state of the market
Blockchain gaming continued to dominate the decentralized app (dApp) landscape, according to AMBCrypto’s examination of DappRadar data. With 1.16 million unique active users at the time of writing, the sector captured 33% of the dApp market.
Source: DappRadar
Moreover, with around 10.33 million transactions, it was the busiest dApp vertical, even surpassing the decentralized finance category.
Failure rate on the higher side
While these were encouraging signs, the reality on the ground was a bitter pill to swallow. AMBCrypto recently reported how three out of every four on-chain games failed in the past five years. Even in 2023, the failure rate was 70%.