June 2024 blockchain game research report: Pixels cause DAU fluctuations, and industry user retention rates vary significantly

Data source: Blockchain Game Research Page

In June 2024, the cryptocurrency market suffered a significant correction, with Bitcoin falling by 7.3% and Ethereum falling by 9.8%. This fluctuation inevitably spread to the blockchain gaming field, causing the total market value of game tokens to shrink by 28.1%. In addition, the number of daily transactions in blockchain games increased by 8.0%, but the number of daily active users (DAU) decreased by 8.8%, falling back to 3 million. Important developments in the industry include widespread discussion around the future of Web3 gaming, Ronin's announcement of the upcoming launch of its Layer 2, and significant changes in user engagement in games such as Pixels and Matr1x FIRE. As the blockchain gaming industry continues to evolve, its core focus has always been on leveraging blockchain technology to create sustainable and engaging gaming experiences.

The data for this report comes from Footprint Analytics’ blockchain game research page. This is an easy-to-use dashboard containing the most important statistics and indicators for understanding the blockchain gaming industry, updated in real time.

Macro Market Review

During June, the cryptocurrency market suffered a correction. The price of Bitcoin slipped from $67,730 at the beginning of the month to $62,795 at the end of the month, a drop of 7.3%. Ethereum price also fell, falling 9.8% from $3,820 at the beginning of the month to $3,444 at the end of the month.

Data Source: Bitcoin and Ethereum Price Trends

Sustained selling pressure from multiple sources has dealt a heavy blow to Bitcoin. On June 24, the Mt. Gox bankruptcy liquidation trustee announced that the repayment of Bitcoin and Bitcoin Cash (BCH) will start in July 2024. This move triggered market concerns about the conversion of assets by creditors into legal tender and the specific time table of wide uncertainty. Meanwhile, U.S. spot Bitcoin ETFs experienced net outflows in the second half of June.

Measures at the government level cannot be ignored either. A German government agency began liquidating bitcoins confiscated in 2013 and moved nearly 4,000 bitcoins to exchanges in June. Meanwhile, the U.S. government also moved 3,940 Bitcoins seized from the wallet of a convicted drug trafficker to Coinbase.

While the US market’s spot Ethereum ETF is going well, Bitcoin’s weakness appears to be spreading across the crypto market.

Blockchain Gaming Market Overview

In June, the total market value of blockchain gaming tokens shrank from US$27.2 billion to US$19.6 billion, a drop of 28.1%. This significant decline directly reflects the general downward trend in gaming token prices, which is due to the lackluster performance of Bitcoin and the overall cryptocurrency market.

Data source: Blockchain game tokens and Bitcoin market capitalization

The average daily number of transactions in blockchain games is 8.6 million, a month-on-month increase of 8.0%.

Data source: Daily transaction number of blockchain games

The overall industry DAU (calculated based on the number of wallets) dropped to 3 million, a month-on-month decrease of 8.8%. This unexpected decline was primarily driven by the Pixels game on the Ronin network, which is one of the largest Web3 games by DAU.

Data source: Blockchain game daily active users

Pixels has experienced significant growth in DAU after migrating from Polygon to the Ronin network in the fourth quarter of 2023, reaching 1 million on May 13 Peak. However, its DAU dropped sharply from 976,000 on June 11 to 252,000 on June 19, a drop of 74.2%. For comparison, the average DAU in May was 842,000, while in June it dropped to 647,000, a decrease of 23.2%.

Data source: Pixels daily active users

Pixels Chapter 2 was officially launched on June 18. This update not only brings improvements to the gameplay, but also optimizes the incentive design and reward distribution strategy, aiming to Improve the long-term sustainability of the game. The Pixels team stated on social media that they are actively implementing a series of systemic measures to effectively curb bot activity in the game, saying that "Chapter 2 breaks all bots."

Pixels’ DAU began to recover on June 20, reaching a level of 423,000 DAU at the end of the month. However, we don't know how many of these users may be evolved bots. Longer observations and data accumulation are required.

It is critical for Pixels, and many Web3 games, to ensure that bot activity is not economically sustainable.

Blockchain Game Public Chain

In June, there were a total of 1,580 active games on each chain. Among them, BNB Chain, Polygon and Ethereum lead the market share with 22.4%, 19.5% and 16.1% respectively.

Data source: Proportion of active games on each public chain

At the same time, among 3 million DAU, Ronin, Polygon and NEAR continue to lead, but they also face many challenges. Ronin’s DAU share was affected by Pixels, falling from 29.8% at the beginning of the month to 18.4% at the end of the month. As for Polygon, due to the DAU of its largest DAU game Matr1x FIRE falling by 31.6% month-on-month, its DAU proportion also shrank from 15.1% to 8.0%.

Oasys’ Layer 2 Saakuru Verse saw significant DAU growth in the last ten days of June. The successful launch of Copycat Killer, Panic and Parkour Battle by Web3 game publisher PlayGround has greatly promoted the surge in DAU on the Saakuru Verse chain, jumping from 18,000 on June 21 to 464,000 on June 30. The average DAU in the last week was as high as 379,000. If this growth momentum continues, Saakuru Verse is expected to quickly become one of the top three blockchain platforms by DAU.

On the other hand, opBNB also performed well in the last week of June, with its average DAU reaching 285,000, accounting for nearly 10% of all DAU.

Data source: Number of daily active game users of each public chain

The public chain field is actively strengthening its game ecosystem. Specific measures include launching special Grant programs for Web3 game developers. At the same time, building more chains has become a favored strategy. Ronin recently announced plans to build Layer 2 using the Polygon Development Kit (CDK), indicating that popular games such as Axie Infinity and Pixels are expected to run on their own game chains in the future. This move is in line with platforms such as Avalanche, Oasys and SKALE. The strategies adopted coincide with each other. So, can this strategy and others like it succeed? We will continue to pay attention.

Blockchain Game Project Overview

In June, the blockchain game market had a total of 3,289 games, of which 1,319 remained active. It is particularly worth mentioning that 257 games have successfully attracted more than 1,000 monthly on-chain users, which accounts for 7.8% of all games and 19.5% of active games.

Data source: Number of monthly active blockchain games

Data like this has been maintained for a while, triggering discussions about "Is blockchain gaming dead?" While we disagree with such exaggerated assertions, it is important to understand their context. It’s worth noting that these figures only reflect the number of users on the chain. In fact, many games provide ways to play without Web3 integration (such as no need to connect to a wallet). Their game data is basically off-chain, and it is difficult to accurately track this part of the data at this stage. Therefore, the importance of blockchain technology and on-chain data has become increasingly prominent.

We have more chains (Layer 1, Layer 2, Layer 3, subnets, etc.), more games and more DAUs. However, we recommend not just focusing on DAU growth, but also on the retention rate of each game. Retention rate, as a core indicator for evaluating game appeal and real user stickiness, can more accurately reflect the health and long-term development potential of the game.

For example, although Pixels’ DAU dropped significantly in June, its monthly retention rate has been strong since migrating to the Ronin platform, reaching a high level that is comparable to or even better than that of Web2 games. Specifically, Pixels' average retention rate exceeded 40% in the second month, and by month six, that number remained above 20%.

Data source: Pixels monthly user retention rate

In contrast, among the new users acquired by Matr1x FIRE in April and May, the retention rate in the second and third months was less than 10%. The game faces major challenges in user retention.

Data source: Matr1x FIRE monthly user retention rate

Blockchain games are in sharp contrast to traditional games through unique elements such as play-to-earn, play-and-earn and play-to-airdrop, but the essential fun of the game is always the core driving force. We must be careful not to let excessive pursuit of potential gains overshadow the pure joy of the game. Building a long-term sustainable blockchain game ecosystem is crucial to the healthy development of the entire industry. As we emphasized on social media: "Web3 games are not dead, Web3 games are under construction."

Blockchain game investment and financing situation

In June, the Web3 game field raised a total of 43.05 million through 12 financing activities U.S. dollars of funding, of which the specific amounts of four financing activities have not been announced to the public. That total was not much different from last month’s $44.95 million.

​June 2024 Investment and Financing Events in the Blockchain Game Field (Source: crypto-fundraising.info)

The Sandbox successfully raised US$20 million in funding through convertible promissory notes at a valuation of US$1 billion , the financing was led by Kingsway Capital and Animoca Brands. Over the past year, a primary focus of The Sandbox team has been on increasing the quality and quantity of user-generated content (UGC) globally.

On the other hand, Uniswap Labs announced the acquisition of an on-chain survival game called Crypto: The Game. The game quickly went viral on social media during its first season. In the game, players need to form a tribe and decide the fate of tribe members through various challenges. In the end, only the last survivor can win. The team at Crypto: The Game chose to join Uniswap Labs to leverage Uniswap’s deep resources and experience in blockchain and decentralized finance to further scale and grow the game.

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