$700 Million Revenue in August: Could Web 3 Games Start the Next Bull Market?
The market has remained bearish for nearly 10 months, and it seems that we are still no way near the next crypto bull. Despite that, some institutional investors have quietly started to buy low and plan for the bull.
MicroStrategy entered an agreement with two agents — Cowen and Company and BTIG — to sell its aggregated class A common stock worth $500,000,000, according to the filing with the U.S. Securities and Exchange Commission (SEC). It pointed out that the stock offering will be for “general corporate purposes, including the acquisition of bitcoin”, despite the fact that the company has lost over $1 billion regarding its BTC holding as of September 10, according to public information.
In addition to mainstream crypto assets, funds in the crypto market seem to be flowing to Web 3 games, a category that’s widely considered to be the starter of the next bull market.
As the bear market entered the next half of 2022, investments and fundraising campaigns in the Web 3 game sector have grown more frequent. The DappRadar report stated that Web3-based games and metaverse projects raised $748 million in August, 135% more than what was invested during July. Contrasted with that in June, however, the figure dropped by 16%. Meanwhile, in early September, Animoca Brands, the developer of The Sandbox and Crazy Kings, also confirmed that it has clinched a $110 million funding round, backed by Temasek, Boyu Capital, and GGV Capital. Subsequently, the SAND price surged up to $1 and now stands at $0.8761.
We can tell that the field of Web 3 games is regarded as a gem by both the crypto market and the conventional financial market, and the major institutional investors stopped waiting and started investing, which is a signal that the market might have bottomed out.
That said, the quality of existing Web 3 games significantly varies. Plus, in today’s bear market, project teams might easily run out of money, in which case they would not be able to keep maintaining or developing their game. This would, in turn, lead to the price slump of the relevant tokens.
Many big-name game studios have announced plans to go into Web 3 games, possibly because the current crypto market cannot foster a representative Web 3 game or because the traditional game industry is going through a bottleneck period.
In December 2021, Ubisoft announced its first foray into NFTs. In August, the company announced its partnership with The Sandbox (a blockchain sandbox game). It also plans to bring IPs like Assassin’s Creed, Just Dance, Far Cry, and Tom Clancy’s Rainbow Six to land in The Sandbox.
Apart from Ubisoft, Square Enix, the studio that developed the Final Fantasy franchise, recently announced that it has joined Oasys, a blockchain built for the gaming community. It is noteworthy that the studio also released its blockchain entertainment business division in April 2022.
Despite that, not all traditional game makers are confident in Web 3. In late July, the developer of Minecraft stated that NFTs and blockchains would be banned in the game. Last October, Steam also announced that it would ban games that use the blockchain to facilitate cryptocurrency and NFT trading.
Although Web 3 games represent an old narrative, the story is now told by different market players, including traditional game makers that excel in game development. Over recent years, there have been only a few legend games in the traditional game market. In addition, many hit projects are additions to existing franchises, and even Elden Ring is a spiritual sequel to the Dark Souls series. Facing the current bear, the market has been sluggish and needs a new story to attract traffic.
The relevant surveys show that the global game market will be worth $203.1 billion by 2022, and the number of players is expected to exceed 3 billion. If Web 3 games were to thrive, they would undoubtedly expand the fundamentals of the crypto market. By then, the market would have an impact on finance through blockchains, as well as the traditional game sector via Web 3.
The flow of money will lead us to opportunities, which benefit not only the market but also investors. Facing the market downturn, investors must act now to profit from the next crypto bull.
If you are interested in Web 3 games, check out the GameFi tokens listed on CoinEx:
Disclaimer: This article offers no investment advice, and all statistics mentioned herein are for reference only. The information provided herein may not be relied upon for investment decisions, for which you will be fully liable.