May 5, 2023

Metaverse, NFT & Gaming Report — April Edition 2023

Monthly comprehensive report that summarizes all major trends, developments and funding across the Metaverse, NFT and Web3 Gaming space

1. NFT Overview

April was a relatively moderate month for the NFT markets in general. NFT market volumes across major blockchains stood at $590 million (excluding wash trading), down 20% from the previous month. Meanwhile, floor prices of most bluechip NFT projects were down by an average of 13.2%, as the price of Ethereum rose in anticipation and post Shanghai upgrade.

NFT volumes across most major blockchains had dipped significantly, with volumes on Ethereum dropping off more than 25%. April also marked the lowest number of unique NFT traders on Ethereum since December 2021, as unique traders have been reducing over the past year. However, not everything is doom and gloom for the NFT markets. Polygon and Arbitrum significantly increased their NFT trading volumes over the month, growing 28.7% and 79% respectively excluding wash trading. Polygons NFT volumes grew with the release of new Trump trading card NFTs and the Yoots migration to the chain, while Arbitrum saw increased volumes likely due to the Arbitrum Airdrop to ecosystem projects. Regardless, it is impressive to see smaller chains experiencing more volumes and activity.

On the marketplaces end, Opensea finally struck back at Blur after losing significant market share over the past few months. Opensea unveiled Opensea Pro, an NFT marketplace aggregator tailored for NFT traders. As many might be aware, Opensea acquired Gem, an NFT aggregator in April of last year. Gem has now rebranded itself to Opensea Pro with features like instant sales, cross-marketplace data and advanced orders. For a limited period, the platform will be enabling 0 trading fees along with a rewards system like Blur but without any token airdrops. Opensea is going a different way by featuring NFTs as rewards for its community.

Looking closer on-chain, we find that Opensea Pro has seen good traction from the community so far and has been taking up a large portion of NFT aggregation volume from Blur. In just a month, NFT aggregation volume dominance of blur has dropped from 82.7% to 46.6%, while Opensea Pro’s dominance has grown to 53.4%, which is impressive.

Another major winner in the NFT sector was Bitcoin Ordinals, which continued its rise in April. Nearly 2 million ordinals were inscribed in April, that’s a 4 times increase in inscription numbers from March. The significant rise has been largely attributed to the introduction of BRC-20 token minting using the ordinals protocol. In terms of funding, the NFT sector attracted $30.6 million in funding, down 21.5% MoM. Largest funding over the month went to Hug and Tonic, both raising $5 million in funding.

NFT Recent Developments

  • Sotheby’s to auction rare NFTs from 3AC’s seized collection (Coindesk). Sotheby’s stated that the collection will be released across various sales formats that will occur at multiple locations globally.
  • Adidas unveils Indigo Herz Pack, fusing NFTs and Fashion (NFT Lately). The NFT-inspired collection features superstar shoes and hoodies, with NFT holders enjoying priority access to the Adidas Web3 ecosystem and token gated experiences.
  • Canon to launch an Ethereum Photo NFT Marketplace Cadabra (Decrypt). Described as a curated marketplace for tokenised photographs, it will offer photos from various categories and will be rolled out this year.
  • NFT Marketplace Opensea launches a no-fee ‘Pro’ marketplace with NFT rewards (Decrypt). Opensea Pro is the rebranded version of Gem V2 and has robust trading tools than the standard version with plans for NFT based trading rewards.
  • RTFKT and Nike collaborate to launch limited edition ‘Air Force 1’ collection with an NFT forging event (Blockster). The collection comprises of 10 fashion collections, each representing Clone X DNA’s.
  • Mastercard drops free music pass NFTs on Polygon with perks for holders (Decrypt). The collectable is part of Mastercards Artist Accelerator program with collectors having access to features like AI-powered music generator app and other education materials and virtual showcases.
  • Popular NFT lending platform NFTfi introduces rewards program (Announcement). The platforms goal is to become a user-owned with season 1 of the rewards program starting on May 15th
  • Starbucks drops the first store collection NFTs with rewards points for owners (NFT Lately)

Monthly NFT Stats

NFT Funding

2. Web3 Gaming Overview

The Web3 gaming sector experienced modest growth in April, although it was not as eventful as the last few months where we saw significant developments. The gaming daily UAW decreased 11% in April to reach a total of 656,502 average gaming unique wallet interactions over the month. This decline marks a continuation of gradual downtrend in UAW seen since late last year.

The gaming sector was uplifted by the Square Enix and Elixir partnership in April. Best known for RPG franchises like Final Fantasy, Dragon Quest and Kingdom Hearts, Square Enix has been rapidly expanding its presence in the blockchain gaming space. This time it partnered with web3 game launcher, Elixer to help spearhead a push to bring Web2 gamers into Web3 domain. Elixer has over 50 web3 games of varying genres and will be promoting blockchain games to traditional games who are fans of other Square Enix Projects. While this development might appear minor at first glance, it carries significant implications for the industry. Partnerships like these have massive potential to bridge the gap between siloed Web3 games and actual web2 gamers, so it is exciting to see Square Enix making these moves.

In addition to the Square Enix news, there were 2 other notable positive developments from within the industry last month. Merit Circle, one of the largest gaming guilds in the space with over $97 million in treasure, announced the creation of its own gaming focused chain. Built using Avalanche subnets, the custom gaming network will be home to multiple games and products. The DAO announced 4 initial game titles along with an AMM and an NFT marketplace on the chain. This is encouraging as Merit Circle has established itself as one of the most promising players in the web3 gaming space and it is expanding its horizons to become the go-to chain for games.

The second major news was the integration of Web3 gaming into Cardano. The chain has been experiencing large NFT trading volumes in recent months, and through a new cross-chain network integration, users of Cardano and other networks can play on-chain games. The effort is possible with Paima, a layer 2 solution that is also able to migrate any games built on other networks to Cardano.

On the funding end, the gaming sector saw a slight decline in funding amounts compared to the previous month. We saw a funding inflow of $76.5 million. The largest funding amounts went to Mayhem Studios and Karate Combat, drawing in $20 million and $18 million, respectively. April also saw 2 major positive developments as Razer launched its Web3 incubator and Bitkraft raised its second token fund. Both of these news are great for web3 gaming startups and positive to see for the space.Gaming Recent Developments

  • Japanese Game Publisher Square Enix teamed up with Elixir to bring Web3 gaming to Mainstream Audiences (Decrypt). While little is known about how Elixir will work with Square Enix, the game launchers CEO believe the partnership will bring them closer to Web3 gaming mass adoption.

  • Merit Circle announced the launch of Beam, its dedicated gaming Subnet on Avalanche (Announcement). The gaming focused blockchain will become a home for dozens of fascinating games and facilitate the DAO’s products.

  • Popular gaming lifestyle brand, Razer established its Web3 incubator for the development for next gen Web3 gaming (Announcement). Called zVentures Web3 Incubator, Razer aims help foster collaboration with gaming projects to drive adoption in the industry through this initiative.

  • FIFA debuts its AI powered world cup soccer mobile game with plans for NFTs in the future (Decrypt). The game is created by Altered State Machine, a popular Web3 AI firm.

  • Notre game, an Animoca Brands company will be making ‘One Fight Arena,’ a MMA strategy fighting game with MMA brand One Championship (Decrypt). Athletes in the games will be NFTs and provide owners with verifiable authenticity and statistics on rarity.

  • Cardano gets on-chain gaming as Paima Studios Layer 2 goes live (Coindesk). Cardano users can play on-chain games using ADA tokens and uses of other networks can also play cardano-based games.

  • Director of District 9 is launching a Web3 battle royale shooter game on Avalanche Subnet (Decrypt). The game will be released on PC, Xbox and Playstation and can be enjoyed both by traditional and Web3 gamers.

  • Gaming Venture Capital firm Bitkraft raised $220.6 million for its second token fund (Coindesk). Bitkraft’s recent investments included Eve Online developer CCP Games and mobile game developer Jungle. The firm’s investment happens through a combination of equity and token purchases.

Monthly Gaming Stats

 

Gaming Funding

3. Metaverse Overview

The Metaverse sector demonstrated a decent performance over the course of April. Monthly Metaverse parcel sales volumes stood at $28 million, while 8447 metaverse parcels were sold over the month (excluding Otherside’s new collections). We experienced a list of positive metaverse developments internally in the space (Yuga Labs Decoupling, vessel claim and Sandbox Land update) and externally (Krafton and Naver Z partnership) in April.

The space was electrified by the enormous news from Krafton, the creators of PUBG Battlegrounds announcing their efforts towards the developing a new Web3 and NFT project aimed at building a NFT Metaverse Platform. The gaming giant announced a joint venture with Naver Z last year. Naver Z is the subsidiary of South Korean conglomerate Naver which works in 3D avatars, AR and 3D technology; and runs Zepeto, Asia’s largest metaverse platform with more than 290 million users worldwide. Naver Z launched a $100 million Metaverse fund early in 2022 and the joint efforts seem to be in line with the plan. According to the announcement, the companies have invested roughly $36.8 Million to develop the platform.

The Metaverse platform will include features such as Create-to-Earn system that allows builders to create and users to purchase work through NFTs and Blockchain. Krafton will develop sandbox tools and blockchains systems while Naver Z will focus on service planning and partnership announcements. The Metaverse will be launching later this year. This will be a big boost for the Metaverse sector, given the experience of Krafton and Naver. The best part of the metaverse product will be the use of web3, NFT and Blockchain technologies.

On the decentralised metaverse front, Sandbox released its quarterly update report along with the land roadmap update. The announcement put forward a slew of major updates to the platform on the Land and creation aspects. There will be more neighborhoods coming every 2 months on Sandbox, and upcoming land sales in industry focused areas like Music Verse and more local community land sales with brands like Adidas. On the Otherside front, the Metaverse opened up Koda decoupling and Vessel claim and revealed more details on the Legends of Mara 2D game.

In terms of funding, Metaverse Funding grew 4.9% from the previous month. The largest funding amounts went to XRSpace and Metagravity, drawing in $25 million and $9.5 million respectively.

Metaverse Recent Developments

  • Creator of PUBG, Krafton and augmented reality firm Naver Z created a joint venture and invested $36.8 million dollars for a new Metaverse platform called Migaloo (NFTgators). The metaverse will launch before the end of 2023 and will adopt a create-to-earn (C2E) model.
  • Roblox adds rare, resellable digital items with creator royalties enforced (Decrypt). The items are issued and resold like an NFTs, but they are not technically NFTs on the Blockchain and are limited to the Roblox platform.
  • Sandbox unveils its Q1 update and roadmap for its for land holders (Announcement). These include new map designs, self publishing, sales for new neighborhoods and local communities with brands.
  • Meta remains its commitment towards the metaverse as division loses $4 billion in Q1 (Insider). Zuckerberg commented that building the Metaverse is a long term project but the rationale for it remains the same.
  • Game Developer and Publisher Netmarble announced a partnership with The Sandbox to strengthen the metaverse content by leveraging Netmarbles beloved IP (Announcement).
  • Epic Games Alum Mike Seavers to join Web3 giant Yuga Labs as CTO (Coindesk)

Monthly Metaverse Stats

Metaverse Funding

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