GameFi & Metaverse: What was 2022 like and what does 2023 promise?
There has already been a lot of talk about the 2022 bear market and its impact on different sectors of the blockchain industry. In general, cryptocurrencies have lost $2 trillion in value, and even the seemingly legendary Bitcoin has fallen in price by 70% since reaching its all-time high of almost $69,000.
The situation was extremely tense because even stablecoins were less stable — everyone remembers the collapse of Terra and LUNA due to the loss of the peg to the UST. A special stream of emotions caused the collapse of the FTX exchange. It also shocked the entire crypto market.
In the GameFi and Metaverse sectors, negative and positive changes have also taken place.
In this article, I present an analysis of the main events of 2022 in this industry and will try to give a forecast of what 2023 will be like for metaverses and blockchain games.
Was Everything Really that Bad?
Despite the chill of the crypto winter on the market during 2022, investors have been adding fuel to the fire. Funds continued to heavily sponsor the GameFi, Metaverse, and NFT sectors throughout the period, and I did my own analysis of what the investment situation was like.
According to cryptorank.io, around $5.02 billion was invested in GameFi in 2022. The projects that received the most funding were Epic Games ($2 billion), Limit Break ($200 million), Loot Mogul ($200 million), Axie Infinity ($150 million), and Fenix Games ($150 million).
Among the new projects, the most noteworthy, in my opinion, are Open World: The Lost Land ($2 million), Flappy Moonbird ($6 million), Rainmaker Games ($4.7 million), Read2N ($2 million), and Mars Metaverse ($1 million).
The most investment rounds in GameFi in 2022 were held by Animoca Brands (60 rounds), Infinity Ventures (29 rounds), and Shima Capital (28 rounds).
By comparison, in 2021, GameFi had an estimated $3.92 billion invested, with a maximum of 40 investment rounds from Animoca Brands.
Total investments in 2021
Among Metaverse projects, similar investment rates were observed. In 2022, $4.7 billion was invested in various projects, which is $1.4 billion more than in 2021.
Among the leading projects were Yuga Labs ($450 million) and Genies ($150 million).
The latest notable investments in 2022 were Utopia Groups ($10.6 million), Dogami ($7 million), and MetaVersusWorld ($2 million).
In general, analytics show that investors did not lose faith in promising projects: in many ways, investment indicators in 2022 even exceed what they were in 2021.
Troubles and Luxury
Still, things have not been going well in the GameFi and Metaverse sectors over the past year. There were several unpleasant events that hit the tokenomics of projects.
I mentioned earlier that Terra and LUNA crashed in 2022. So this event affected the cost of many game tokens: STEPN GMT (-93.9%), Axie Infinity AXS (-92.9%), The Sandbox SAND (-92.5%), Decentraland MANA (-90.3%). The bitmetis.io chart shows a sharp drop in the prices of most gaming tokens just in May when Terra crashed.
Things weren’t going well for the metaverses. Metaverse daily trading volumes were down 96% in November 2022 according to The Block report. In January, the platforms brought in $49.2 million in monthly trading volumes, and by November this figure was only $2 million.
In addition, the study found that metaverse land prices have also fallen 90% since the beginning of the year. The average cost of land was $15,000, and by November the average amount did not exceed $2,000.
The good news is about the number of GameFi and Metaverse users. A study by Footprint Analytics showed that GameFi’s maximum daily active addresses reached 1,747,436 in March, and the minimum number was 717,216 in November.
The maximum daily number of new users was seen in Alien Worlds in September 2022. In just one day, more than 160,000 new players joined the project. It is noteworthy that the most active users prefer mobile games since this is the most common, convenient, and accessible tool.
Also, despite the harsh conditions of the bear market, there was good demand for luxury NFTs. In mid-January 2023, Yuga Labs announced the launch of the Sewer Pass; a free NFT pass for Dookey Dash. The endless racer provides an opportunity to earn points, which in the future may be useful to holders. It is quite possible that this is due to the Otherside Metaverse, on which the company is actively working.
Not surprisingly, the brand survived the bear market. Users began selling passes on the secondary market, and by January 19, listings on the OpenSea exchange were showing a current floor price of 1.49 ETH (around $2,293) for a Sewer Pass. In less than 24 hours, 8,394 ETH transactions were made on the exchange and some NFTs were sold for 5.75 ETH. Naturally, the price grew every hour, given such a demand for passes.
2023: Prospects
Let’s make some predictions about what will happen to the GameFi and Metaverse sectors in 2023. Perhaps the projects will thoroughly integrate DAO solutions into the infrastructure of their products. The model is roughly the same everywhere: holders of a certain number of native tokens will be able to make decisions on managing the community. Alien Worlds has already implemented a similar concept, and other projects may be interested in this movement.
In game development, AI technologies may become more common. SIDUS Heroes has long used various AI tools for graphics, animation, combat generation, and character voice acting. You don’t need to be a crypto expert to see that AI mass adoption has already begun and the emerging blockchain game industry is unlikely to pass the technology by.
I also drew attention to the assumption that many projects will try to overcome dependence on ETH. Popular games like Axie Infinity, Gods Unchained, and Decentraland use the ETH blockchain platform. MarketsAndMarkets experts predict that dependence on Ethereum will decrease in favor of other platforms such as Solana, Polygon, and BNB Chain. This is due to the fact that the Ethereum blockchain, although quite accessible and widespread these days, is becoming more attractive for hacking and attacks by miners.
Among other trends, the growth of the UAW, the greater entry of large companies into the metaverse and the development of advertising on such platforms are expected. Trends indicate that we are getting closer to true mass adoption of GameFi and Metaverse.
Final Thoughts
Despite the bear market of 2022, GameFi and the Metaverse sector as a whole have shown strong performance. Yes, some game tokens have lost a lot of value, but more money has been invested in blockchain games and metaverses than in the previous 2021. The industry remained popular with users and was especially interested in luxury brands.
GameFi and Metaverses are expected to become more mass adopted in 2023. Advertising will rapidly spread there and the quality of games on the blockchain will noticeably improve due to AI and DAO technologies. In short, whatever obstacles get in the way of GameFi and Metaverse, they will continue to be a popular growing industry in the crypto world.
