Article source: Footprint Analytics
In 2024, the Web3 gaming industry exhibited a complex landscape, achieving significant progress while also facing numerous challenges. Although daily active users surged by over 300%, and traditional gaming companies began to make concrete moves in the space, the market performance shows that the sector's market capitalization increased by only 60.5%, significantly lagging behind meme coins and AI sectors. As Bitcoin reached new historical highs and various crypto sectors thrived, a critical question emerged: 'Did Web3 gaming miss its best development opportunity in this bull market?'
However, behind these surface-level statistics, 2024 marks a significant transformation period for the industry. The sector has shifted from a purely speculative phase towards maturity. This report will analyze how Web3 games evolved within the market cycle of 2024, exploring the key indicators, technological advancements, and strategic shifts. From infrastructure development to user engagement models, we will examine how the industry builds sustainable growth while addressing mainstream adoption challenges.
Note: Unless otherwise specified, all data in this report is as of December 15, 2024. Data sources are Footprint Analytics and CoinMarketCap.
Annual key indicator overview
Market capitalization: reached $31.8 billion, an increase of 60.5%;
Trading volume: $5.2 billion, an increase of 18.5%
Transaction counts: 5.3 billion, a decrease of 30.3%
Daily active users: reached 6.6 million by year-end, growing 308.6% compared to the beginning of the year;
Active games: out of 3,602 games, 1,361 remained active (37.8%);
Annual financing: 220 financing events, totaling $910 million;
Leading public chains:
Trading 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) (December average).
Market performance analysis
Market capitalization performance
The Web3 gaming sector experienced strong growth in 2024, but underperformed compared to other crypto sectors. According to Footprint Analytics data, the market capitalization of gaming tokens reached $31.8 billion by the end of the year, an increase of 60.5% compared to the previous year. Although the sector hit an intrayear peak of $47.4 billion in March, it remained significantly below the historical high of $114.1 billion set in November 2021.
Despite the overall crypto market performing strongly in the latter half of 2024, particularly in the last two months driven by Bitcoin, gaming tokens lagged behind other sectors. CoinMarketCap data shows Web3 gaming ranked eighth among the top ten sectors in market cap growth, significantly trailing behind leading sectors: meme coins (421.1%), AI and big data (168.0%), and the Solana ecosystem (124.1%).
This underperformance extended to community attention. In the most-watched sectors on CoinMarketCap, Web3 gaming only accounted for 6.7% of views among the top ten sectors, ranking ninth, as the year's focus primarily centered on meme coin-related projects.
Trading volume analysis
The key performance indicators for the Web3 gaming sector in 2024 showed mixed results, with trading volume increasing but transaction counts continuing to decline.
Trading volume trends
The total trading volume of Web3 games in 2024 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's 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 trends
The total transaction count for 2024 reached 5.3 billion, down 30.3% from the previous year. This level is comparable to the 5.1 billion transactions in 2021 but failed to reverse the downward trend that began in 2022.
User engagement
Daily active users (DAU) experienced significant growth throughout 2024, rising from an average of 1.6 million in January to 6.6 million in December, a year-on-year increase of 308.6%. This growth surpassed the previous cycle's peak of 1.8 million DAU set in November 2021. Although these figures may include some bot activity, this growth still showcases significant user engagement in the sector.
Ecosystem development
Public chain competition and evolution
Analysis of major public chain performance
In 2024, there was a significant shift in the dominance of different public chains in Web3 gaming, with each chain showing different strengths in trading volume, transaction counts, and user engagement.
Transaction volume distribution across chains
The BNB Chain maintained its dominance in trading volume, achieving $1.2 billion in trading volume (23.1% market share), followed by Ethereum with $920 million (17.6%). Blast and Ronin accounted for 9.2% and 9.0% of the market share, respectively.
Transaction counts across chains
Despite a 30.3% decline in overall transaction counts in the industry, certain public chains showed strong performance. WAX led with 1.8 billion transactions (33.6% of the total). Aptos emerged with its 'tap-to-earn' model through the Telegram game Tapos, reaching 620 million transactions (11.6%), with 540 million transactions occurring just in August. Ronin and opBNB maintained 321 million and 318 million transactions, respectively.
User counts across chains
User activity across chains has shown significant growth, especially in the second half of 2024. opBNB emerged prominently in user engagement, with an average DAU of 2.2 million in December, surpassing long-time leader Ronin (1.1 million). Nebula, as SKALE Layer 2, ranked third with an average DAU of 458,000. Public chains like NEAR, Sui, and Sei entered the top ten DAUs, demonstrating an expanding competitive landscape in the ecosystem and a willingness among users to try new platforms.
The diversification of usage across chains indicates a maturing ecosystem, 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 program from the Starknet Foundation, and significant grant programs from Sui and Xai all showcase how each chain is attracting and retaining quality game projects through strategic incentives.
Technical infrastructure improvements
Capacity enhancement
Blockchain processing capabilities have significantly improved, with the current network's transaction processing capacity increasing 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 Immutable zkEVM, Avalanche L1-based chains, Oasys, SKALE, Arbitrum Orbit game chains, and other high-throughput blockchains such as Solana, Sui, and Aptos.
Game-specific chains have also made significant progress. Ronin announced its Layer 2 plan Ronin zkEVM in June 2024, enabling Ronin developers to create their own zkEVM Layer 2. Immutable zkEVM has taken a strategic step toward greater accessibility by removing deployment whitelists and enabling permissionless deployments. Additionally, Avalanche completed its most significant 'Avalanche9000' upgrade since the mainnet launch in 2020, focusing on addressing the barriers to custom L1 builds and improving interoperability.
Gas fees reduction
The Ethereum 'Cancun' upgrade in March 2024 (also known as 'Proto-Danksharding' or 'EIP-4844') is a significant milestone that dramatically reduced fees on L2 networks. The impact was profound, with Gas fees dropping from several dollars to just a few cents or even lower, eliminating one of the biggest friction points faced by blockchain game developers and players.
Cross-chain interoperability improvement
The Chainlink Cross-Chain Interoperability Protocol (CCIP) saw significant development in 2024, enabling developers to create games that can interact with multi-chain assets. This improvement greatly 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 transfers and interactions.
2024 also witnessed the significant rise of decentralized platforms supporting cross-chain games. Platforms like Portal, Fractal ID, and Web3Games provided the necessary infrastructure for seamless asset transfers and interactions between different blockchain ecosystems.
Project development
2024 was an important year for the development of Web3 gaming. In addition to the entry of traditional gaming companies, the ecosystem also witnessed several significant game releases. Anticipated games like Off The Grid and MapleStory Universe entered early access, while Illuvium finally officially launched. Pirate Nation successfully completed its token generation event (TGE) and launched a successful 'play-to-airdrop' campaign.
Active game analysis
As of November 30, 2024, the total number of blockchain games reached 3,602, an increase from 2,997 in January. However, active game metrics reveal some challenging trends. Out of the total number of games, only 1,361 (37.8%) remained actively on-chain, meaning 2,241 (62.2%) were inactive. Furthermore, despite the increase in total game numbers, the number of active games actually declined compared to 1,387 in January.
In-depth analysis of user engagement metrics shows further market concentration. The number of games with over 100 monthly active users (MAU) dropped from 586 in June 2022 to 522 at the end of 2024. In November 2024, 161 games (4.5% of the total) achieved over 10,000 MAU, with 96 games (2.7% of the total) surpassing 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 multiple factors, including intense competition, rapid iteration strategies, and the 'head effect' formed by leading games in the ecosystem.
Innovation landscape
Cross-platform gaming trends
Mobile gaming emphasized accessibility and seamless user experiences, establishing itself as the primary platform for Web3 games in 2024. A 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 newly launched Web3 games in 2024.
Social platforms, especially 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, streamlined 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 surpassing 10 million MAU. Notably, TON successfully converted this vast user base into on-chain participants, generating spillover effects in Web3 gaming, meme coins, and DeFi sectors. This success has prompted several 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 plans to launch 20 mini dApps in December 2024, marking a growing interest from mainstream messaging platforms in integrating blockchain gaming.
The console gaming sector remains relatively undeveloped in Web3 games, with major manufacturers Microsoft and Sony taking cautious stances. However, new approaches are emerging to bridge this gap. Some developers, like Gunzilla Games' Off The Grid, choose to separate core gameplay from blockchain functionalities to align with traditional console gaming expectations. Meanwhile, 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.
Traditional gaming companies entering the space
2024 marked a significant shift in the attitudes of traditional gaming companies toward blockchain gaming, with major game studios transitioning from experimental actions to strategic development.
Ubisoft released Champions Tactics: Grimoria Chronicles on the Oasys Layer 2 HOME Verse in October. This tactical RPG achieved a range of NFT-based features while maintaining traditional gaming elements.
Square Enix strengthened the development of its blockchain sector through strategic investments and collaborations. In addition to investing in the gaming platform Elixir Games and HyperPlay, the company announced plans to bring its game Symbiogenesis to HyperPlay.
Sony Group's involvement marks a significant advance toward blockchain gaming, both through investments and infrastructure development. While supporting double jump.tokyo Inc. in a $10 million Series D funding round, 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 into game development
As artificial intelligence revolutionizes various industries in 2024, the Web3 gaming sector has become a significant beneficiary of AI innovations, opening up new opportunities for game development and player experiences.
AI has revolutionized in-game interactions and content generation. Game studios are using AI to create more complex non-player characters (NPCs) that can adapt to player behaviors and generate personalized quests based on individual gaming histories and preferences. This personalization enhances player engagement by making the gaming experience more relevant and tailored.
In development, AI significantly simplified the creation process. Developers are leveraging AI tools to automate the generation of game environments and assets, greatly reducing production time and costs. This has given small teams the opportunity to create high-quality games that can compete with large studios.
AI has also enhanced the operational aspects of Web3 games. This technology is used 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. Additionally, 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 funding amount decreased by 7.3% compared to 2023 and is significantly lower than the boom periods of 2021 and 2022 (respectively $3.2 billion and $2.7 billion), the number of financing events increased by 48.7% compared to 2023, indicating sustained investor interest despite the smaller average deal sizes.
This year has shown a clear trend towards early-stage investments, with 76 early-stage deals (34.6% of total events) compared to only 20 Series A or later financing rounds (9.1%). This trend indicates that, while new projects continue to attract initial funding, many projects from the 2021-2022 boom period face challenges in securing follow-up financing.
Among investors, Animoca Brands maintained its lead, completing 38 investments, a 192.3% increase from 2023, participating in 17.3% of all financing events in 2024. The Spartan Group and Big Brain Holdings followed closely with 22 and 15 investments, respectively, with the top ten investors completing a total of 152 investments.
Major financing events
In 2024, seven projects raised over $20 million in a single event. Azra Games led with $42.7 million in Series A funding, focusing on bringing console-level gaming experiences to mobile platforms.
In cumulative financing, Monkey Tilt raised $51 million through two rounds of funding, positioning itself as a platform for the 'game-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 frenzy of 2021-2022 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 a seed round to build Web3 games on Base, and Alliance Games raising $5 million in Series A for AI-driven decentralized infrastructure. This trend reflects growing investor interest in foundational technologies that can support multiple games and platforms.
Platform and multichain development attracted significant attention, especially projects building cross-chain gaming ecosystems. Seeds Labs raised $12 million for its flagship product Bladerite on Solana, while B3 launched Open Gaming Layer, showcasing investor interest in expanding cross-chain gaming capabilities.
Additionally, new game categories garnered significant investor attention in 2024, particularly Telegram-based games and gambling game projects, despite facing regulatory challenges.
Industry evolution and future outlook
The Web3 gaming industry underwent 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 the 'play-to-airdrop' strategy of Pirate Nation and Pixels provided new user acquisition methods. Meanwhile, mature projects shifted to the 'play-and-earn' model, prioritizing gameplay over financial incentives.
However, the sector still faces ongoing challenges. Technical barriers remain significant, especially in achieving seamless blockchain integration without affecting the gaming experience. Regulatory uncertainty, particularly around gambling characteristics and token classification issues, continues to impact development decisions.
Crucially, maintaining on-chain engagement has become a fundamental issue. This is particularly evident in the performance of Telegram games: the monthly active users of Hamster Kombat dropped from over 100 million in September to 22.9 million by mid-December, with only 0.0004% of users engaging in on-chain game activities. While other Telegram games have shown higher conversion rates, most remain below 1%. Notably, these metrics reflect on-chain gaming activities specifically, as the core gameplay of most Telegram games remains off-chain, and users may be more active in other sectors like meme coins or DeFi. This highlights the ongoing challenge of converting platform users into active blockchain game players.
2025 Outlook: Reshaping Relevance
As Web3 games seek to reestablish their position in the crypto landscape, several key trends have emerged as potential transformative catalysts:
Integration with social platforms stands on 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 could ultimately address the user acquisition challenges in the sector by leveraging existing social networks rather than building communities from scratch.
AI integration is evolving from marketing features 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 that have traditionally made it difficult for Web3 games to compete with traditional gaming experiences.
Achieving sustainable growth through integration may ultimately determine the relevance of the sector. Success may not come from competing with traditional games or other crypto sectors, but from seamlessly integrating with them. This means focusing on how blockchain enhances rather than defines the gaming experience, developing more complex 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 about integration. By cleverly connecting traditional gaming, social platforms, and blockchain technology, Web3 games have the potential to create real innovative value. This evolution will not only help the industry break through the current limitations of 'just another crypto vertical' but is also likely 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.
