KEY POINTS

  • "Axie Infinity" one of the most played P2E games
  • The NFT game suffered from a $600 million hack in mid-February
  • Blockchain gaming attracts more investors this year

Blockchain-based gaming, an emerging niche in the video games industry, is anticipated to see a massive growth surge as investors funnelled $2.5 billion in Q1 2022, as crypto pushes beyond Bitcoin and altcoins and creates a world of its own with the emergence of the Metaverse.

This year could be the year for crypto games developers, as suggested by the latest report from DappRadar and the Blockchain Game Alliance (BGA) which noted that despite the security incidents, the war in Ukraine, and the scanty performance of the crypto market, blockchain gaming activity skyrocketed 2000% from Q1 2021.

The niche has attracted the interest of venture capitalists who invested $2.5 billion in Q1 2022 alone, noting that should this pace continue the figure could inflate to $10 billion by the end of 2022, which is 150% higher than last year. This rise in investment suggests that the niche, which only raised around $4 billion throughout 2021, has turned into a crucial sector for investors.

A horse character called "Pega", which is raced by players in the blockchain-based game "Pegaxy", is seen in this handout image, Philippines, March 2022. Angela Hoffman/Handout via REUTERS
A horse character called "Pega", which is raced by players in the blockchain-based game "Pegaxy", is seen in this handout image, Philippines, March 2022. Angela Hoffman/Handout via REUTERS Reuters / ANGELA HOFFMAN

This investment trend is also backed by the increasing interest in the niche from crypto enthusiasts. In March, blockchain games added 1.22 million unique wallets (UAW), including 22,000 from the top play-to-earn game "Axie Infinity," despite the Ronin bridge hacking incident that siphoned $600 million from the network.

Apart from that, the increase in popularity of P2E NFT games on Ethereum sidechains is also a contributor to the massive growth of the new video games niche. Games like "Pegaxy," "Crazy Defense Heroes," "Aavegotchi" and "Arc8" saw a 219% in Polygon's gaming activity since the start of the year.

The report listed the biggest deals that contributed to the $2.5 billion investment, including the $360 million raised by Animoca Brands, the $450 million investment by Sequoia Capital in Polygon and a $450 million investment led by Animoca Brands along with The Sandbox, Coinbase and FTX to roll out the " Otherside " metaverse featuring play-to-earn games.

Moreover, the report revealed that "Axie Infinity" is one of the most played games based on daily usage.

Blockchain games, also referred to as crypto games, or NFT games, are decentralized video games that feature elements that utilize crypto-based blockchain technologies.

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