The third of this four-part series breaks down the extensive CoinMarketcap and Naavik 2022 Blockchain Gaming Report, looking at the blockchain gaming deal market and state of guilds.
Part 2 of this four-part series on the recently-published CoinMarketCap and Naavik Blockchain Gaming Report covered how the speculation bubble in play-to-earn games popped. Part 3 analyzes how the funding and the guild landscape have changed from the peak of the bull market.
Q3 2021 Funding Landscape
Source: CoinMarketCap and Naavik Blockchain Gaming Report
First, the report looks at the funding landscape in Q3 2021. That quarter saw an exponential growth in capital, with more than $1 billion flowing into the sector. Companies building platform layers and infrastructure for future games to live on benefited the most, in terms of funding size. Game developers were getting funded — albeit with less capital — but there was an emerging divide between small budget, big ambition developers and the triple-A developers.
Q3 2022 Funding Landscape
Source: CoinMarketCap and Naavik Blockchain Gaming Report
Moving forward to Q3 2022, total deal value was down by 19% YoY ($875M vs $1.1B) — the first time for this sector. However, the total deal number was up 2.6X YoY (58 vs 22). Seed round checks were somewhat smaller ($7m compared to $12M), and 2021’s seed round companies graduated to Series A, and some to Series B/B+. The biggest Q3 2022 deals were Limit Break’s $200M raise and Animoca Brands’ $110M raise.
Overall, the deal market is maturing, with more capital going towards blockchain gaming studios that utilizes blockchain gaming infrastructure to produce engaging gaming content. Finally, Naavik adds, deal activity will continue to normalize going into 2023, as the bear market will reset the market.
Guilds
Source: CoinMarketCap and Naavik Blockchain Gaming Report
In Q3 2022, guilds are one sector that did not see much funding. A large majority of guilds were created during the speculative bull market, and focused on play-to-earn game Axie Infinity. Guilds, which are essentially scholarships for players that want to earn yield on in-game assets, raised $200M over the past two years, with participation from notable VC firms like a16z. But as pointed out in Part 2 of this series, the P2E model is unsustainable and experiencing a major decline. Super guilds like Yield Guild Games are looking at significant revenue declines.
Source: CoinMarketCap and Naavik Blockchain Gaming Report
So far, most of them relied on community and investment management. That is, building an ecosystem around game scholars and efficiently managing the income from game yields.
But that is not enough to sustain all of the 24,000 guilds on the market right now. 97% of players are in micro guilds (10-100 players), while only 1% of players are in macro guilds (1,000+ players).
Source: CoinMarketCap and Naavik Blockchain Gaming Report
Therefore, most guilds are undergoing a pivot throughout 2022-23. Unsurprisingly, large guilds like YGG and Meric Circle have better chances of executing this into a long-term sustainable business model. To do that, they can leverage existing strengths or build new strengths to evolve.
For instance, YGG is pivoting into becoming an esports organization. Another avenue is building new technology products like NFT marketplaces or ID layers allowing players to track their in-game assets across games. Guilds can also leverage the experience and human capital they acquired, such as providing beta testing services by its lower-skilled scholars. Such value-add services would provide a whole new revenue stream. Another area is content, where guilds could drive interest through articles, videos, streams and other media.
Still, the future of guilds hangs very much in the balance. With a market in its consolidation phase, it is premature to predict the future of guilds.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
