Not immune to the ongoing slump in the global crypto market, the number of active users has seen a gradual decline during the first bear cycle for the gaming industry. But 2022 has proven to be the year for GameFi fundraising.
A recent report by CoinMarketCap x Footprint Analytics shows that projects built upon hype and an unsustainable play-to-earn model collapsed the hardest during this downturn. It reveals that GameFi and metaverse projects had large influxes of VC funding relative to other categories in the blockchain industry, but no single smart contract platform managed to maximize and become the go-to GameFi chain.
The whole market, as per the report, has been trending downward amidst the harsh macro conditions and rising inflation. It highlighted the Fear & Greed Index reached an extreme fear state, and GameFi active users measured by the unique wallet addresses interacting with the protocol smart contracts for a certain period of time gradually declined.
Fortnite developer Epic Games emerged as the biggest deal funded – receiving $2 billion in April 2022 from Sony Group Corporations and KIRKBI. Animoca Brands, Sandbox’s parent company, came in second as it raised $359 million to build out the open metaverse. It invested in the highest number of discrete GameFi projects, around 52 as of July. Infinity Ventures Crypto has 25 projects and Shima Capital has 23. In August, Animoca Brands secured another $100 million from Temasek, a Singapore-based venture capitalist, to fund its metaverse ambitions.
CoinMarketCap believes GameFi and the metaverse market are still in the early development phase, given that 48% of the investments are concentrated in the seed round. However, a breakthrough mainstream hit remains elusive and no go-to blockchain for GameFi has come up either.
