While a fledgling industry, blockchain gaming has already faced massive challenges—resulting in a swath of games being put on indefinite pause by their respective developers, while others switch chains. In 2022, a staggering 157 blockchain games were “halted” or otherwise stopped development, while another 43 titles were halted in 2023, according to a new Game7 report on the state of the Web3 gaming industry. Game7 is a decentralized community or DAO focused on blockchain gaming adoption. Game7 core contributor George Isichos told Decrypt that the blockchain or “Web3” games that stopped development this year struggled to get financial support and were generally titles that were established before 2021.

Most of the blockchain games that stopped development or live support this year were also mainly from very small studios, whereas very few “AA” or “AAA” games were shut down. Game7 defines “AA” as a studio with about $10-25 million in funding, and “AAA” studios as those with over $25 million in funding. Despite this, the majority of Web3 games are actually still indie games, according to the report, with 42% of Web3 games classified as “indie” or developed by individuals or small teams without any financial backers or publishers. Some 40% of Web3 games are “midsize,” meaning they have secured $10 million or less in funding. AA games make up just 5% of the blockchain gaming ecosystem—and AAA titles even less, comprising just 1% of the industry. 

The number of total gaming-focused blockchain networks spiked this year, going from 37 in 2022 to 53 in 2023. Competition among blockchains vying for game developers to use their networks has spiked as a result, and is correlated with a rise in developers switching chains this year. While most blockchain games still use a layer-1 blockchain like Ethereum ’s mainnet, many have adopted Ethereum-compatible sidechains or scaling networks instead. About 81% of current blockchain games use a non gaming-focused layer-1 blockchain, according to Game7.

2023 is poised to be the year of game migrations. In total, 65 blockchain games moved networks so this year, up from 48 games switching things up across all of 2022. While there are also many more blockchain games around now than in years past, the amount of chain-switching is still notable. This year, games migrated to Polygon, Immutable , and Arbitrum in the largest numbers, respectively, per the report. And 60% of games that left a layer-1 network moved to a layer-2 scaling network.

This year, developers have been switching chains for various reasons, including lower costs, broader market and regulatory concerns, and creating their own blockchains. Despite the challenges, the blockchain gaming industry continues to grow, with more developers switching chains and creating innovative games.

Edited by Andrew Hayward

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You can read more about this topic here: Decrypt: Why So Many Crypto Games Are Switching Chains—Or Calling it Quits

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