The Sandbox, Axie Infinity See $278M Volume in August
UpOnly | Research #26: First-gen games lead as investors look for next big thing
Despite considerable investments in new blockchain gaming ventures, first-generation Web3 games dominate the niche. Metaverse game, The Sandbox, and Pokémon-inspired Axie Infinity brought in the biggest volumes in August and continue to see large economic activity despite the bear market.
This week’s UpOnly | Research reviews the continued market dominance of first-gen blockchain games and the latest high-profile investment news across the industry. We also discuss the improvements new gaming ventures need to take over first-gen ones. We will also consider how investors can capitalize on either outcome of the race.
The Sandbox and Axie Infinity top volume ranking for August
Blockchain gaming engagement and economic activity have remained relatively stable throughout the current crypto bear market. August proved no different. The top ten blockchain games raked in over $310 million in trading volume, according to DappRadar. The Sandbox and Axie Infinity claimed most of the market share, highlighting players’ confidence in exchanging value within top-rated games instead of upcoming projects.
The two games accounted for $278 million (over 80%) of the combined trading volume of the top five games. Axie Infinity also remains the most played blockchain game, with over 500,000 users in August.
Axie Infinity’s increased trading volume is attributed to the game’s ongoing breeding event and transition to the Origin game mode. The Sandbox, on the other hand, welcomed several key partners in August. This includes influencers such as Paris Hilton and Gordon Ramsey. The Metaverse game also recently entered its third alpha season, indicating increased trading volume in the weeks ahead.
Meanwhile, the rest of the top five games include two projects from BNB Chain — Metaverse Miner ($10.29 million) and APEmove ($7.2 million). Avalanche-based DeFi Kingdoms completes the ranking with roughly $10.6 million in assets traded.
How long will first-gen games remain dominant?
The bear market has not stopped the significant influx of capital into blockchain gaming. Investors are highly optimistic about the technology’s potential. They remain keen on being a part of the next breakthrough. However, the continued dominance of the first-generation games despite massive funding for upcoming games suggests it could take significant improvements and time for power to change hands.
Current blockchain games are often criticized for lacking the level of immersive experience seen in mainstream games. Most AAA blockchain games are still in development and will need time to gain traction when they go live. Additionally, issues surrounding token integration and mechanics for driving economic value for players remain unsolved. Axie Infinity’s infamous economic collapse threw down a gauntlet still unaddressed by newer gaming enterprises.
Until blockchain gaming addresses these issues, first-gen games will likely retain a considerable market share (similar to Bitcoin’s market share over other cryptocurrencies). Meanwhile, the next few years remain promising. The niche is continually attracting huge investments and world-class talent to improve existing gaming experiences. Just two Web3 gaming startups attracted over $240 million worth of investment capital in the past week alone.
Limit Break raises $200M for new blockchain game
Gabe Leydon and Halbert Nakagawa are veteran game developers famed for building free-to-play mobile games at US-based gaming studio Machine Zone. Leydon and Nakagawa have co-founded Limit Break, a Web3 gaming studio working on developing a new kind of blockchain game.
Limit Break recently disclosed a $200 million fundraising to build what it calls a “free-to-own” game. Current gaming projects typically raise development funds from NFT sales. Limit Break hopes to allow early gamers to mint in-game character NFTs for free and eventually create value for the tokens through active gameplay.
Limit Break’s profitability would come from holding early NFT mints until the game becomes successful enough for the tokens to become valuable. The startup believes this novel approach aligns with community and developer expectations and provides a bedrock for the in-game economy to thrive.
Web3 game publisher Xterio raises $40M
Switzerland-based Web3 game publisher Xterio recently announced a $40 million funding round. The core partner for funding was FunPlus. other popular blockchain-focused venture capital funds also participated, including FTX Ventures, Hashkey, Animoca Brands, and XPLA.
Xterio’s primary offerings include a user-facing blockchain gaming platform for Web3 gamers. It also offers a developer-focused backend to make it easier for Web2 developers to transition into blockchain gaming. The new fund will help build out Xterio’s platform to drive the adoption of Web3 games.
Stay on top of Web3 gaming data with UpOnly
The Web3 gaming space is on track to witness unparalleled growth, as new gaming projects address pressing issues and attempt to unseat market leaders. The UpOnly data directory provides comprehensive coverage of upcoming Web3 and Metaverse games, allowing investors to make informed decisions and position their portfolios for sizeable returns.
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