Why So Many Crypto Video games Are Switching Chains—Or Calling it Quits

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Whereas a fledgling trade, blockchain gaming has already confronted large challenges—leading to a swath of video games being placed on indefinite pause by their respective builders, whereas others change chains.

In 2022, a staggering 157 blockchain video games had been “halted” or in any other case stopped growth, whereas one other 43 titles had been halted in 2023, in line with a brand new Game7 report on the state of the Web3 gaming trade. Game7 is a decentralized neighborhood or DAO centered on blockchain gaming adoption.

Game7 core contributor George Isichos instructed Decrypt that the blockchain or “Web3” video games that stopped growth this 12 months struggled to get monetary help and had been usually titles that had been established earlier than 2021.

Monetary troubles journey up video games

A lot of the blockchain video games that stopped growth or stay help this 12 months had been additionally primarily from very small studios, whereas only a few “AA” or “AAA” video games had been shut down. Game7 defines “AA” as a studio with about $10-25 million in funding, and “AAA” studios as these with over $25 million in funding.

Regardless of this, the vast majority of Web3 video games are literally nonetheless indie video games, in line with the report, with 42% of Web3 video games labeled as “indie” or developed by people or small groups with none monetary backers or publishers. Some 40% of Web3 video games are “midsize,” which means they’ve secured $10 million or much less in funding. AA video games make up simply 5% of the blockchain gaming ecosystem—and AAA titles even much less, comprising simply 1% of the trade. 

Picture: Game7.

Extra chains, extra competitors

The variety of complete gaming-focused blockchain networks spiked this 12 months, going from 37 in 2022 to 53 in 2023. Competitors amongst blockchains vying for recreation builders to make use of their networks has spiked because of this, and is correlated with an increase in builders switching chains this 12 months.

Whereas most blockchain video games nonetheless use a layer-1 blockchain like Ethereum’s mainnet, many have adopted Ethereum-compatible sidechains or scaling networks as a substitute. About 81% of present blockchain video games use a non gaming-focused layer-1 blockchain, in line with Game7.

The Ethereum Virtual Machine (EVM) is overwhelmingly the most well-liked selection for blockchain video games, with 74% of video games selecting to make use of an EVM community. Solana’s digital machine is available in a distant second, making up about 10% of video games.

So which networks are most blockchain video games utilizing in 2023? Ethereum sidechain Polygon stays the best choice, with Binance’s BNB Chain coming in second. Ethereum’s mainnet is the third hottest. Solana, Immutable, Avalanche, and Arbitrum take the fourth to seventh prime spots, respectively.

Picture: Game7.

Video games on the transfer

2023 is poised to be the 12 months of recreation migrations. In complete, 65 blockchain video games moved networks so this 12 months, up from 48 video games switching issues up throughout all of 2022. Whereas there are additionally many extra blockchain video games round now than in years previous, the quantity of chain-switching remains to be notable.

This 12 months, video games migrated to Polygon, Immutable, and Arbitrum within the largest numbers, respectively, per the report. And 60% of video games that left a layer-1 community moved to a layer-2 scaling community.

However switching blockchains is not any small feat. So why are video games migrating?

Indie developer Reinhardt Weyers is the creator of Untitled Platformer, a recreation launched again in 2021 on BNB Chain (previously Binance Good Chain, or BSC). Weyers instructed Decrypt through e mail that this 12 months, he determined it was time to maneuver to a gasless chain—one with out transaction charges—and migrated his recreation to SKALE.  

Since Untitled Platformer made the change, Weyers seen that “gamers began actively attempting my recreation extra, with some sticking round for fairly some time.”

Earlier this 12 months, each Mighty Action Heroes and on-chain recreation Pirate Nation independently moved from Polygon to Arbitrum.

“As extra folks have migrated to Polygon, we simply began to run into scaling points with the Polygon chain,” Pirate Nation developer at Proof of Play, CEO Amitt Mahajan, beforehand instructed Decrypt

“We had been paying between $3,000 and $4,000 a day on gasoline. And so it simply bought untenable. It was stopping us from with the ability to scale the sport,” Mahajan stated.

Whereas some builders switched chains for decrease prices, others moved resulting from broader market and regulatory issues.

Anito Legends Cofounder and CMO Jayvee Fernandez instructed Decrypt in an e mail that the Philippines-based studio selected to maneuver its first blockchain recreation from BNB Chain (aka BSC) to Polygon due to issues round crypto alternate Binance.

“Normal sentiment round BSC isn’t very favorable of late,” Fernandez instructed Decrypt.

“After launching in 2022, we slowly felt the market uncertainty and anxieties with the entire SBF and CZ fiasco. We additionally noticed Binance being under fire in different markets. We felt it was too ‘centralized’ and did not need our recreation’s future to be beholden to such drama,” the CMO shared.

Fernandez added that Polygon was chosen in the end as a result of the staff believes it’s extra decentralized—and noticed a possibility to attach with many different Philippines-based video games utilizing the Ethereum sidechain.

Others have created their very own blockchains fully, like Corey Wilto, CEO of Mirai Labs, whose studio created the Pegaxy blockchain recreation.

“For us it got here right down to worth seize. Constructing a series got here at a fairly low value ($100K-$200K),” Wilto instructed Decrypt through e mail. 

“The worth that it brings to the corporate when considered from a VC perspective and even simply monetizing customers via swaps, bridging, and different DeFi instruments, it got here as a no brainer as a result of we had the technical functionality internally,” Wilto shared.

Edited by Andrew Hayward

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