- Blockchain gaming struggles with financial support, particularly for smaller studios, while indie games dominate the industry.
- The rise of gaming-focused blockchain networks has led to competition and game migrations.
- Game migrations occur due to factors such as cost reduction, scalability issues, and the search for a more decentralized environment.
In the rapidly evolving landscape of blockchain gaming, developers face significant challenges that impact the progress and sustainability of their projects. This article delves into the hurdles experienced by the blockchain gaming industry, shedding light on games that have been put on hold or migrated to different chains. We explore the financial struggles encountered by smaller studios, the dominance of indie games, the rise of competing blockchain networks, and the motivations behind game migrations.
The Struggles and Halted Development
Blockchain gaming, though still in its nascent stage, has encountered formidable challenges. A recent report by Game7, a decentralized community committed to blockchain gaming adoption, reveals that in 2022, a staggering 157 blockchain games halted their development, with an additional 43 titles paused in 2023. These games faced difficulties in securing financial support and were predominantly established before 2021.
Financial Troubles Trip Up Games
The majority of games that experienced halted development or lack of live support in 2023 were from small studios. In contrast, only a few “AA” or “AAA” games, denoting studios with substantial funding ranging from $10-25 million and over $25 million, respectively, were affected. Remarkably, the blockchain gaming ecosystem primarily comprises indie games, constituting 42% of the landscape. Indie games are developed by individuals or small teams without financial backers or publishers. Midsize games, securing $10 million or less in funding, account for 40% of the Web3 games. In comparison, AA games represent a mere 5%, and AAA titles merely 1% of the industry.
More Chains, More Competition
The number of blockchain networks targeting gaming applications surged from 37 in 2022 to 53 in 2023. This increase in gaming-focused blockchain networks has intensified competition among various chains, each vying for game developers to adopt their platforms. Consequently, developers have started switching chains, seeking advantages offered by alternative networks.
While many blockchain games still operate on layer-1 blockchains such as Ethereum’s mainnet, a significant number have embraced Ethereum-compatible sidechains or scaling networks. According to Game7, approximately 81% of current blockchain games utilize non-gaming-focused layer-1 blockchains. The Ethereum Virtual Machine (EVM) remains the overwhelmingly popular choice for blockchain games, with 74% of games opting for an EVM network. Solana’s virtual machine occupies a distant second place, accounting for roughly 10% of games.
Most Popular Blockchain Networks in 2023
In 2023, the most widely adopted blockchain networks for gaming purposes are as follows:
Games on the Move
Game migrations have become a pronounced trend in 2023. A total of 65 blockchain games switched networks this year, surpassing the 48 games that underwent similar transitions throughout 2022. Despite the increased number of blockchain games, the significant chain-switching activity remains noteworthy.
Reasons for Game Migrations
Game developers have several motivations for switching chains. Some developers shifted to different networks primarily to reduce costs associated with transaction fees. For instance, indie developer Reinhardt Weyers, creator of Untitled Platformer, migrated his game from BNB Chain to SKALE, a gasless chain. Weyers experienced increased player engagement following the switch, with players actively exploring and enjoying his game.
Other developers migrated due to scaling issues and concerns about the market and regulations. Mighty Action Heroes and Pirate Nation, on-chain games, independently moved from Polygon to Arbitrum earlier this year. Pirate Nation’s developer, CEO Amitt Mahajan from Proof of Play, explained that scaling issues on the Polygon chain led to exorbitant gas fees amounting to $3,000 to $4,000 per day, hindering the game’s scalability. On the other hand, broader market uncertainties and concerns about a centralized ecosystem led Anito Legends, a Philippines-based studio, to transition their blockchain game from BNB Chain to Polygon. The team believed that Polygon offered a more decentralized environment and an opportunity to connect with other Philippines-based games utilizing the Ethereum sidechain.
Some studios have even taken a bold step by creating their own blockchains. Mirai Labs, led by CEO Corey Wilto, developed the Pegaxy blockchain game on a custom-built chain. The decision to create their own chain stemmed from the desire to capture value efficiently and leverage various monetization opportunities. Wilto emphasized the low cost of building the chain, ranging from $100,000 to $200,000, making it a compelling choice for their studio.
Conclusion
Developers in the evolving landscape of blockchain gaming face significant challenges impacting project progress and sustainability. This article explores hurdles experienced by the industry, including paused or migrated games, financial struggles for smaller studios, dominance of indie games, rise of competing networks, and motivations behind game migrations. Join us as we navigate the dynamic realm of blockchain gaming and its quest for innovation.
Disclaimer
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