The Explosive Growth of Blockchain Gaming in 2023

Launched in November 2017 by accelerator startup Axiom Zen, the first major game known to adopt blockchain technology was CryptoKitties. The game allowed players to buy non-fungible tokens (NFTs) of virtual pets using Ether (ETH). Each player would then breed their pets, passing on different “cattributes”, including patterns, colors, and fur, to their offspring. CryptoKitties became a huge success and clogged the Ethereum blockchain so much that it was once responsible for about 25% of all Ethereum traffic.

Since CryptoKitties, several other blockchain games have launched to a very receptive audience of blockchain gamers. According to a DappRadar and BGA Games report, blockchain gaming in Q1 2022 jumped 2,000% from the same period in 2021. The report also stated that blockchain games attracted over 1.22 million unique active wallets (UAW) in March 2022, accounting for 52% of all blockchain activity.

Why is Blockchain Gaming So Popular?

The following are a few reasons why blockchain gaming has gained popularity:

• Low Transaction Fees: Transaction fees sometimes affect deposits and withdrawals depending on a gamer’s preferred method. However, this problem is uncommon with platforms that allow crypto payments because blockchain transactions are much cheaper than traditional transactions. Even in the iGaming sector, online casinos are now accepting crypto deposits and withdrawals for cost-effectiveness. Playing slots, keno, or any table games at a Bitcoin Live Casino where transaction fees are cheap owing to crypto use helps the casino attract more customers and also keep existing ones. In addition to the advantage for players, low crypto transaction fees help the casino save money that can be directed to exciting bonuses for customers.
• Ownership: Through blockchain technology, players can own the in-game items they purchase or earn during gameplay. Unlike traditional gaming, where these assets only hold value within the game’s ecosystem, blockchain gaming allows players to sell assets on a public blockchain outside of the gaming ecosystem.

• Security: Blockchain gaming significantly reduces the risk of fraud, hacking, and other potential security risks associated with traditional banking methods. Because data recorded on the blockchain is unchangeable in most cases, players can sustain their gaming progress and ensure their assets are safe even from the game’s developers.

• Transparency: Games powered by blockchain technology ensure a level of security not available with traditional gaming. For public blockchains, all recorded transactions remain on the network and can be viewed by anyone interested. This forces parties to remain transparent, especially since anyone can audit transactions to detect foul play. Also, blockchain technology is the framework behind provably fair gaming, an algorithm commonly used by online casinos that ensures transparency by providing players with data points that can be used to audit the results of a bet.

Blockchain Gaming in the Future

Most forecasts predict significant growth in the blockchain gaming industry. The value of the blockchain gaming market was $4.83 billion in 2022, but experts predict a remarkable 68.3% compound annual growth rate (CAGR) between 2023 and 2030. The explosive growth in the sector is attributed to several factors, including a need for heightened security and transparency. 

Another reason for this growth is the inherent decentralization found in blockchain technology. Anyone can build on a blockchain network to either create new titles, or improve scalability and other issues plaguing existing networks. Furthermore, blockchain gaming traffic is also increasing because these networks support the organic formation of gaming economies. Since there is a high chance of interaction in these games, organic communities quickly form, helping to expand the game’s popularity and attract new players.

Blockchain gaming is already enjoying attractive investments and is likely to attract more funding in the future. For instance, blockchain game developer Animoca Brands, behind The Sandbox, raised $110 million in September 2022. Animoca Brands noted it would use the funds for intellectual property acquisition, metaverse expansion, and product development. A month later, Ethereum game development company Horizon Blockchain Games successfully raised $40 million to create more products and scale its operations. Following increased interest and investments, the world of blockchain gaming will likely spread further into the mainstream in 2023 and beyond.