Crypto Gaming Predictions: Will 2024 Be The Breakout Year?

In 2023, the nascent blockchain gaming industry continued to grow and more polished experiences saw the light of day – but progress moved at a slower pace than in 2022.

Blockchain game saw $1.4 billion in investments between May and November 2023 alone, but the wider gaming industry continued to see a decline in both the number of investments and lower transaction values, according to Pitchbook data.

The overwhelming majority of blockchain games are indie or mid-sized projects, with AA and AAA funding levels accounting for only 6% of the market, according to a Game7 report. This year, half of all new blockchain games are based in Asia and the total number of game-focused blockchains grew 84% year-over-year, Game7 found.

This year, Pitchbook called blockchain games “forgotten, but not gone.” Q3 Game Report this year, arguing that while the initial hype cycle for such games has evaporated, some “significant titles” remain in development.

But what could 2024 hold?

Some games will succeed—if they’re fun

Chris Akhavan, NFT marketplace Magic Eden’s head of games, predicts that three Web3 games released in 2024 will be successful and popular enough that larger traditional game studios will take notice – and try to replicate that success .

“Non-Web3 Game Companies [will] Web3 research and development efforts are starting again, and investors are resuming investing in Web3 games at significant volumes,” said Akhavan Decrypt.

Alec M. Wantoch, head of product at HyperPlay, a Web3 native game launcher and game store aggregator, also predicts that 2024 will be a year where many blockchain games are finally released. We’ve seen more compelling games emerge in 2023, but many were unfinished or launched in early access. Yet they get there.

“I think a lot of the industry has realized that these games need to be optimized for fun. We’re seeing a lot of new and innovative games that are indeed embracing the fun aspect, and that’s a good thing,” said Wantoch Decrypt.

“I also think we’ll see gaming continue to trend more in the Philippines and countries in Asia in general,” he continued. “We’ve already seen a lot of interest in it blockchain-based games in Asia. I must note that the technology is becoming smoother, and this will make the game much more immersive and interesting for users in 2024 and beyond.

Josh Jones, co-founder and co-CEO of the open-world blockchain game Cornucopias, predicts that cryptogame developers will prioritize the user experience and seek to keep potentially alienating blockchain jargon out of their games.

“Crypto games haven’t found product-market fit so far,” Jones said Decryptand adds that mainstream gamers expect a level of quality never seen before in the crypto gaming market.

“For the coming year, games that really focus on enhancing the user experience – that is, games that are fun, easy to use and have compelling storylines – will be a big theme. I also think we will see a lot of blockchain- based games trying to de-jargonize their terminology so that it is easy for both crypto-natives and non-crypto users alike, so instead of saying ‘NFT’, the term ‘in-game assets’ would or be ‘player owned assets’.”

Jones sees crypto jargon as a deterrent to Web3 gaming, and doesn’t think the narrative around crypto gaming will change until it does. The Cornucopias Co-CEO also emphasized that generative AI could improve games next year, allowing for more customization based on player choices.

“In 2024, I expect Web3 gaming to continue to experience greater adoption,” shared OpenSea’s Head of Gaming Partnerships, Oliver Maroney.

“If I had to predict, we’ll probably see some of these titles reach more broad scale creators (and later viewers) which will lead to a larger player base among these games and the ecosystems they’re a part of,” Maroney said. “As we’ve seen with Fortnite and many of the biggest titles, it’s content creators who stream and showcase games that really get the average gamer interested.”

Maroney also believes that it is possible that more Web2 players will enter blockchain gaming in 2024, perhaps via established games that embrace crypto technology.

“I also think we’re seeing two or three major Web2 native IP and games converging or transitioning to Web3 infrastructure layers,” Maroney added. “These will be catalysts for space.”

Fully on-chain games will evolve

Ryze Labs research analyst Fred Li said Decrypt that on-chain games will tend to be open-world games where players can make the rules.

“We expect the emergence of autonomous worlds reminiscent of Minecraft,” Li said. “People are not content to simply be consumers of PGR (Professional Generated Rules) games; there is an increasing need to become creators in UGR (User Generated Rules) games. Fully on-chain games enable people to create autonomous worlds.”

Li also predicts that 2024 and beyond will bring continued improvements to fully on-chain gaming infrastructure, but warned that fully on-chain gaming may struggle to meet expectations set by existing traditional games.

“We expect to see increased competition within the Web3 gaming space,” Li added.

Games will find an audience despite platform limitations

The CEO and co-founder of Crypto IP firm Story Protocol, Sy Lee, predicts that blockchain gaming will account for a dominant percentage of wallet activity in 2024, rising from the current range of approx. 30-40% of all decentralized application (dapp) transactions. Lee also believes that more and more game developers will support user-generated content and mods; games like Deaddrop and Shrapnel have already put a lot of emphasis on enabling community-made game content.

Polygon Labs head of business development Urvit Goel predicts that this year’s relatively smaller funding rounds won’t stop some great games from launching in 2024.

“In 2023, funding was down significantly from 2022 and 2021—about 70% year over year,” Goel said. “It’s a rough year for new stuff to get funded or existing teams to continue their operations. Capital was difficult.”

“As we see the rest of 2024 play out, we will see real games using blockchain,” Goel added.

While 2023 brought a slew of blockchain games to the Epic Games Store, one title, Gods unleashed, was delisted shortly after it was added to Epic because the ESRB video game ratings board assigned it an “Adults Only” rating for its play-to-earn elements. It’s possible, according to the ESRB, that any game that offers players items of “real world value” such as NFTs or crypto tokens could receive such a rating, which would ban them from consoles and possibly other platforms.

While Gods Unchained is listed again after Decrypt‘s investigation into its Epic Store removal and Epic saying it will no longer block games rated “AO” purely for blockchain integrations, such incidents are a reminder that distribution on third-party platforms is not guaranteed.

“It’s the next order problem,” Goel said of cryptogames’ distribution demand, adding that Web3 native game launchers could be one prevalent solution.

“If we get a great game, we’ll usually find a way to get it,” he said, suggesting that if a blockchain game is attractive enough to players, it will find an audience regardless of other potential limitations.

Edited by Andrew Hayward