In 2024, the Web3 gaming industry presented a complex situation, achieving significant progress while facing numerous challenges. Although daily active user counts surged over 300%, and traditional gaming companies began concrete plans in the sector, the market performance reveals that the sector's market cap grew by only 60.5%, significantly lagging behind Meme coins and AI sectors. With Bitcoin hitting historic highs and various crypto sectors thriving, a key question arises: 'Did Web3 games miss their best opportunity for development in this bull market?'
However, behind these surface data, 2024 marks an important transformative period for the industry. The industry has moved from a purely speculative stage to maturity. This report will analyze how Web3 games evolved within the market cycle of 2024, exploring the sector's key metrics, technological advancements, and strategic shifts. From infrastructure development to user engagement models, we will investigate how the industry is building sustainable growth while addressing the challenges of mainstream adoption.
Note: Unless otherwise specified, all data in this report is as of December 15, 2024. Data sources are Footprint Analytics and CoinMarketCap.
Annual Key Metrics Overview
Market Cap: Reached $31.8 billion, growth of 60.5%;
Trading Volume: $5.2 billion, growth of 18.5%
Transaction Count: 5.3 billion transactions, down 30.3%
Daily Active Users: Reached 6.6 million by the end of the year, a growth of 308.6% compared to the beginning of the year;
Active Games: Out of 3,602 games, 1,361 remain active (37.8%);
Annual Financing: 220 financing events, totaling $910 million;
Leading Public Chains:
Transaction Volume Share: BNB Chain (23.1%), Ethereum (17.6%), Blast (9.2%);
Transaction Count Share: WAX (33.6%), Aptos (11.6%), Ronin (6.1%);
Daily Active Users: opBNB (2.2 million), Ronin (1.1 million), Nebula (458,000) (average for December).
Market Performance Analysis
Market Capitalization Performance
The Web3 gaming sector achieved strong growth in 2024, but underperformed compared to other crypto sectors. According to Footprint Analytics data, the market cap of gaming tokens reached $31.8 billion by year-end, an increase of 60.5% compared to the previous year. Although the sector hit a year-high of $47.4 billion in March, it still significantly lagged behind the historical high of $114.1 billion set in November 2021.
Although the overall crypto market performed strongly in the second half of 2024, particularly in the last two months driven by Bitcoin, gaming tokens lagged behind other sectors. CoinMarketCap data shows that Web3 games ranked eighth in market cap growth among the top ten sectors, significantly trailing leading sectors: Meme Coins (421.1%), AI and Big Data (168.0%), and the Solana ecosystem (124.1%).
This underperformance is also reflected in community engagement. In CoinMarketCap's most viewed sectors, Web3 games accounted for only 6.7% of views among the top ten sectors, ranking ninth, as the focus for the year primarily centered around Meme coin-related projects.
Trading Volume Analysis
The Web3 gaming sector's key metrics in 2024 showed mixed performances, with trading volume increasing but transaction counts continuing to decline.
Trading Volume Trend
In 2024, the total trading volume of Web3 games reached $5.2 billion, an increase of 18.5% compared to 2023. While it reversed the downward trend since 2021, the trading volume still remains significantly below the previous cycle peak. The 2024 data is only 6.2% of the 2021 peak ($84.1 billion) and 15.1% of the 2022 trading volume ($34.5 billion).
Transaction Count Trend
The total number of transactions in 2024 reached 5.3 billion, a decrease of 30.3% compared to the previous year. This level is comparable to the 5.1 billion transactions in 2021, but fails to reverse the downward trend that began in 2022.
User Engagement
Daily Active Users (DAU) achieved significant growth throughout 2024, increasing from an average of 1.6 million in January to 6.6 million by December, a year-on-year growth of 308.6%. This growth surpassed the previous cycle peak of 1.8 million DAU created in November 2021. Although these figures may include some bot activity, this growth still showcases significant user engagement in the industry.
Ecosystem Development
Public Chain Competition and Evolution
Major Public Chain Performance Analysis
In 2024, there was a significant shift in the dominance of different public chains within Web3 games, with each chain exhibiting different advantages in terms of trading volume, transaction count, and user engagement.
Transaction Volume Distribution by Chain
The BNB Chain retains its dominance in transaction volume, achieving $1.2 billion in trading volume (23.1% market share), followed by Ethereum with $920 million (17.6%). Blast and Ronin hold market shares of 9.2% and 9.0%, respectively.
Transaction Count by Chain
Despite an overall 30.3% decline in transaction counts in the industry, certain public chains demonstrated strong performances. WAX led with 1.8 billion transactions (accounting for 33.6% of the total). Aptos surged with its 'tap-to-earn' Telegram game Tapos, reaching 620 million transactions (11.6%), with 540 million transactions occurring in August alone. Ronin and opBNB maintained transaction counts of 321 million and 318 million, respectively.
User Count by Chain
User activity across chains showed significant growth, particularly in the second half of 2024. opBNB stood out in user engagement, with an average daily active user count of 2.2 million in December, surpassing long-time leader Ronin (1.1 million). Nebula, as a SKALE Layer 2, ranked third with an average DAU of 458,000. Public chains like NEAR, Sui, and Sei made it into the top ten DAUs, showcasing the expanding competitive landscape of ecosystems and users' willingness to try new platforms.
The diversification trend among the chains indicates that the ecosystem is maturing, with different public chains finding their respective niches for various gaming experiences and user preferences. Major networks are no longer just providing basic blockchain facilities but are evolving into comprehensive platforms for game developers. The $2 billion ARB Game Catalyst program from the Arbitrum Foundation, the $50 million STRK token distribution plan from the Starknet Foundation, and significant grant initiatives from Sui and Xai all demonstrate how each chain is strategically incentivizing to attract and retain quality game projects.
Technical Infrastructure Improvements
Capacity Enhancement
Blockchain processing capacity has significantly increased, with the current network's transaction processing capacity per second improving more than 50 times compared to four years ago. This growth is attributed to the rise of Ethereum Layer 2 and Layer 3 networks, including gaming chains based on Immutable zkEVM, Avalanche L1, Oasys, SKALE, Arbitrum Orbit, and other high-throughput blockchains like Solana, Sui, and Aptos.
Game-specific chains also made significant progress. Ronin announced its Layer 2 plan, Ronin zkEVM, in June 2024, allowing Ronin developers to create their own zkEVM Layer 2. Immutable zkEVM took a strategic step towards greater accessibility by removing deployment whitelists and enabling permissionless deployments. Additionally, Avalanche completed its most significant 'Avalanche9000' upgrade since its mainnet launch in 2020, addressing the barriers to custom L1 builds and improving interoperability.
Gas Fees Reduced
The Ethereum 'Cancun' upgrade in March 2024 (also known as 'Proto-Danksharding' or 'EIP-4844') marked a significant milestone, drastically reducing L2 network fees. The impact was substantial, with gas fees dropping from several dollars to mere cents, eliminating one of the biggest friction points faced by blockchain game developers and players.
Cross-Chain Interoperability Enhancement
The Chainlink Cross-Chain Interoperability Protocol (CCIP) made significant progress in 2024, enabling developers to create games that can interact with multi-chain assets. This improvement significantly enhanced the interoperability of in-game items.
The adoption of standardized formats for digital assets, particularly ERC-721 and ERC-1155, has become more widespread. These standards ensure that in-game NFTs can be recognized and used across various games and platforms, simplifying asset transfer and interaction.
2024 also witnessed the significant rise of decentralized platforms supporting cross-chain gaming. Platforms like Portal, Fractal ID, and Web3Games provided the necessary infrastructure for seamless asset transfer and interaction between different blockchain ecosystems.
Project Development
2024 is a significant year for the development of Web3 games. In addition to traditional gaming companies entering the space, the ecosystem witnessed several important game releases. Highly anticipated games like Off The Grid and MapleStory Universe entered early access, while Illuvium officially launched. Pirate Nation successfully completed its token generation event (TGE) and launched a successful 'play-to-airdrop' campaign.
Active Games Analysis
As of November 30, 2024, the total number of blockchain games reached 3,602, an increase from 2,997 in January. However, the active game metrics show some challenging trends. Among the total game count, only 1,361 (37.8%) remain active on-chain, while 2,241 (62.2%) are inactive. Additionally, despite the increase in total game count, the number of active games has actually decreased compared to 1,387 in January.
In-depth analysis of user engagement metrics shows a further concentration in the market. The number of games with over 100 monthly active users (MAU) dropped from 586 in June 2022 to 522 by the end of 2024. In November 2024, 161 games (accounting for 4.5% of the total) achieved over 10,000 MAU, with 96 games (accounting for 2.7% of the total) exceeding 100,000 MAU.
This trend of user concentration indicates that the market is maturing, with successful games attracting larger audiences. This phenomenon is influenced by several factors, including intense competition, rapid iteration strategies, and the 'head effect' formed by top games within the ecosystem.
Innovation Landscape
Cross-Platform Gaming Trends
Mobile gaming emphasized accessibility and seamless user experience, establishing its position as the primary platform for Web3 games in 2024. The mobile-first approach has influenced how developers design blockchain games, focusing on intuitive interfaces and simplified onboarding processes. Mobile games accounted for 29.4% of the newly launched Web3 games in 2024.
Social platforms, particularly Telegram, have become a powerful catalyst for the adoption of Web3 games, accounting for 20.9% of newly launched Web3 games. Telegram's success stems from its large user base, simplified in-app experience, and ability to bypass traditional app store restrictions. The platform's influence peaked in the third quarter of 2024, with 11 games exceeding 10 million MAU. Notably, TON successfully converted this vast user base into on-chain participants, creating spillover effects in Web3 gaming, Meme coins, and DeFi sectors. This success has prompted numerous blockchain networks outside of TON to compete for Telegram traffic, with Aptos, Sui, Core, and others launching or supporting Telegram-based games.
Similarly, Line announced in December 2024 a plan to launch 20 mini dApps, marking an increasing interest from mainstream messaging platforms in the integration of blockchain gaming.
The console gaming sector remains relatively undeveloped in Web3 games, with major manufacturers like Microsoft and Sony maintaining a cautious stance. However, new approaches are beginning to emerge to bridge this gap. Some developers, such as Gunzilla Games with Off The Grid, choose to separate core gameplay from blockchain functionalities to meet traditional console gaming expectations. At the same time, blockchain platforms are starting to develop their own Web3 gaming handhelds, such as Sui's SuiPlay0X1 and Solana's Play Solana Gen1 (PSG1), potentially creating a new category of dedicated Web3 gaming devices.
The entry of traditional gaming companies
2024 marks a significant shift in traditional gaming companies' attitudes towards blockchain gaming, with major studios moving from experimental actions to strategic development.
Ubisoft released Champions Tactics: Grimoria Chronicles on Oasys Layer 2 HOME Verse in October. This tactical RPG integrates a range of NFT-based features while maintaining traditional gaming elements.
Square Enix is strengthening its blockchain sector through strategic investments and collaborations. In addition to investing in gaming platforms Elixir Games and HyperPlay, the company announced it would bring its Symbiogenesis game to HyperPlay.
Sony Group's involvement marks a significant advance towards blockchain gaming, both through investments and infrastructure development. While supporting double jump.tokyo Inc. with a $10 million Series D funding, Sony also announced the launch of Soneium, a Layer 2 network aimed at connecting Web3 innovations with consumer applications in gaming and entertainment.
AI Integration in Game Development
As artificial intelligence revolutionizes various industries in 2024, the Web3 gaming sector has become a significant beneficiary of AI innovation, opening new opportunities for game development and player experiences.
AI has revolutionized in-game interaction and content generation. Game studios are utilizing AI to create more complex non-player characters (NPCs) that can adapt to player behavior and generate personalized tasks based on individual gaming history and preferences. This personalization enhances player engagement by making the gaming experience more relevant and individualized.
In development, AI has significantly streamlined the creation process. Developers are leveraging AI tools to automatically generate game environments and assets, drastically reducing production time and costs. This enables small teams to create high-quality games that can compete with larger studios.
AI has also enhanced the operational aspects of Web3 games. This technology has been utilized to automate game testing processes and monitor on-chain transactions to guard against potential fraud or cheating, which is particularly important in games with complex economic systems. Furthermore, AI algorithms are helping to optimize game economies and token models, addressing one of the major challenges in Web3 game design.
Investment Landscape
Annual Financing Event Overview
Web3 games raised $910 million through 220 financing events in 2024. Although the amount decreased by 7.3% compared to 2023 and is significantly lower than the boom periods of 2021-2022 (which raised $3.2 billion and $2.7 billion, respectively), the number of financing events increased by 48.7% compared to 2023, indicating sustained investor interest despite the decreased size of individual transactions.
This year showed a clear tilt towards early-stage investments, with 76 early-stage transactions (accounting for 34.6%) compared to only 20 Series A or later financing rounds (accounting for 9.1%). This trend indicates that while new projects continue to attract initial funding, many projects from the 2021-2022 boom are facing challenges in securing follow-up financing.
Among investors, Animoca Brands maintained its leading position, completing 38 investments, a growth of 192.3% compared to 2023, participating in 17.3% of all funding events in 2024. Spartan Group and Big Brain Holdings followed closely with 22 and 15 investments, respectively, while the top ten investors completed a total of 152 investments.
Major Financing Events
In 2024, seven projects raised over $20 million in a single funding event. Azra Games led the way with $42.7 million in Series A funding, focusing on bringing console-level gaming experiences to mobile platforms.
In terms of cumulative financing, Monkey Tilt raised $51 million through two rounds of financing, operating as a platform for a 'gaming-entertainment-gambling' hybrid model. Gunzilla Games secured four rounds of funding from notable investors including VanEck, Coinbase Ventures, Delphi Ventures, and Avalanche's Blizzard Fund, showcasing strong investor confidence.
Strategic Investment Trends
As the industry transitions from the 2021-2022 frenzy to maturity, the focus has shifted to fewer but higher-quality projects, with investors becoming more selective in their approaches.
Financing increasingly targets game infrastructure and development tools, rather than just the games themselves. Notable examples include NPC Labs raising $18 million in seed funding to build Web3 games on Base, and Alliance Games raising $5 million in Series A funding for AI-driven decentralized infrastructure. This trend reflects growing investor interest in foundational technologies that can support multiple games and platforms.
Platforms and multi-chain development attracted significant attention, especially projects focused on building cross-chain gaming ecosystems. Seeds Labs raised $12 million for their flagship product Bladerite on Solana, while B3's launch of Open Gaming Layer demonstrated investor interest in expanding cross-chain gaming capabilities.
Moreover, new game categories received significant investor attention in 2024, particularly Telegram-based games and gambling projects, despite facing regulatory challenges.
Industry Evolution and Future Outlook
The Web3 gaming sector experienced a significant evolution in gaming models in 2024. The previously dominant 'play-to-earn' model gave way to more sustainable approaches. Telegram-based 'tap-to-earn' games demonstrated unprecedented user acquisition capabilities, while Pirate Nation and Pixels' 'play-to-airdrop' strategies provided new methods for user acquisition. Simultaneously, mature projects shifted to 'play-and-earn' models, placing gameplay above financial incentives.
However, the sector continues to face ongoing challenges. Technical barriers remain significant, particularly in achieving seamless blockchain integration without impacting the gaming experience. Regulatory uncertainties, especially surrounding gambling characteristics and token classification issues, continue to affect development decisions.
Crucially, maintaining on-chain engagement has become a fundamental issue. This is particularly evident in the performance of Telegram games: Hamster Kombat's monthly active users fell from over 100 million in September to 22.9 million by mid-December, with only 0.0004% of users engaging in on-chain gaming activities. While other Telegram games exhibited higher conversion rates, most still fell below 1%. Notably, these metrics particularly reflect on-chain gaming activities, as the core gameplay of most Telegram games remains off-chain, with users likely more active in other sectors like Meme coins or DeFi. This highlights the ongoing challenge of converting platform users into active blockchain game players.
Outlook for 2025: Redefining Relevance
As Web3 games seek to re-establish their position in the crypto landscape, several key trends emerge as potential catalysts for transformation:
The integration of social platforms stands as the most promising path toward mainstream relevance. The remarkable success of Telegram games demonstrates the power of meeting users where they are, with platforms like Line and TikTok poised to follow suit. This approach may ultimately address the user acquisition challenges in the space by leveraging existing social networks rather than building communities from scratch.
AI integration is evolving from a marketing feature to a fundamental driver of innovation. In addition to enhancing game development and NPC interactions, AI may address core challenges in economic design and user retention within the sector, areas where Web3 games have traditionally struggled to compete with conventional gaming experiences.
Achieving sustainable growth through integration may ultimately determine the relevance of the sector. Success may not stem from competing with traditional games or other crypto sectors but rather from seamlessly blending with them. This means focusing on how blockchain enhances rather than defines the gaming experience, developing more sophisticated token economics, and placing user experience above crypto-native features.
In summary, the role of Web3 games within the crypto ecosystem may not be about dominance, but rather about integration. By cleverly connecting traditional gaming, social platforms, and blockchain technology, Web3 games are poised to create genuine innovative value. This evolution not only aims to help the industry break through the limitations of being 'just another crypto vertical' but also has the potential to become a key force in reshaping the future of the gaming industry.
This report is an annual report jointly launched by Footprint Analytics and CoinMarketCap Research.
