2023 is the BUIDL year for cryptogames

2022 was a big year for the play-to-earn (P2E) gaming scene. The influx of capital and users has been followed by a sharp drop in the price of tokens for the blockchain game and a decrease in the number of players — and the market is still reeling. And with the fallout from the FTX disaster affecting every corner of the industry, the game’s prospects for making money look bleak at first glance. But if we look under the hood, the numbers tell a different story: strong funding this year has set the stage for a serious “build-out” in 2023.

A consistent stream of strong raises for Web3 gaming studios has been quietly flooding the market with funding for months. In August, UnCaged studios raised $24 million, adding to the nearly $750 million raised by the Web3 gaming studio in that month alone. The momentum continued in September when Revolving Games raised $25 million and in October when Odyssey Interactive, Stardust and SkyWeaver raised $19 million, $30 million and $40 million respectively. Thirdverse raised $15 million in November for Web3 and virtual reality (VR) games;

These numbers are in direct contrast to falling asset prices and player enthusiasm for the Web3 gaming space. But even as players and tokens stumble, venture capitalists are betting big on the future of blockchain gaming. Which studios will win in the year ahead? And why?

Instead of gambling on guesswork, VCs bet on experience

One notable element in all the raises that have occurred in recent months is that most of the studios that have received funding are not conducting seed or pre-seed rounds. Instead, they hold a series of Aces.

Of course, there are exceptions to this rule. Some studios have successfully completed initial or pre-seed rounds. But even then, their founding teams have serious gaming experience. For example, Ruckus Games, which recently raised $5.5 million in seed funding, is a game studio started by former Gearbox and Riot Games developers. This indicates that VCs are focusing on studios with a gaming experience – a departure from the early days of Web3 gaming.

How blockchain gaming investments are distributed in 2022. Source: DappRadar

During this early period, many Web3 game projects received strong funding without a clear plan for launching their products or establishing teams with a proven track record to make it happen. Indeed, the YOLO days of late 2021 and early 2022 are long gone. Today, studios that receive funding already have a proven level of success in building Web3 games. VCs are now thinking deeper into the future, even five to ten years down the line.

Related: 2023 will be the death of play-to-earn gaming

While this timeframe may seem like a long lifespan in the crypto world, this horizon is normal for studies in the traditional gaming sphere. The shift to long-term thinking also shows that studios are starting to realize that individual games have a shelf life – and that investing in the studios that make the games is a more efficient approach.

How will crypto gaming change?

Looking at these increases combined with long-term trends in Web3 gaming, we’re starting to see some patterns starting to shape the future of the industry.

So what will be the effect of all the raises in a few years?

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We can certainly expect a strong emphasis on mobile gaming. In September, DappRadar reported that hyper-casual mobile blockchain games drove more than 1.7 million users from Web2 to Web3 gaming in one week.

With these changes underway, it seems likely that Web3 gaming will enter the “mainstream” and that within the next five years, the global index of the top 100 gaming studios will include studios that have strong blockchain elements.

Here’s to the long game

We probably haven’t seen the last of the big raises happening in the Web3 gaming space in recent months. The Web3 gaming hype cycle is officially over, and the space is in “buidl” mode. And this time, investors are interested in studies that play the long game (pun fully intended).

This shift in focus, combined with significant fluctuations in the larger blockchain technology industry, will create new dynamics and opportunities for builders in the P2E market in 2023. Increased expectations of both players and financiers will separate the wheat from the chaff. Priorities in 2023 and beyond will be focused on quality instead of quantity. In the end, those who can create the most excellent games will win. So the game continues.

Corey Wilton is the co-founder and CEO of Mirai Labs, the international gaming studio behind Pegaxy. A well-known speaker and thought leader on the game for money, he founded his first company within crypto in 2018, a customer support service designed to help cryptocurrency companies with their customer service.

This article is for general information purposes and is not intended and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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