2023 is a BUIDL year for crypto gaming

2022 is a big year for the play-to-ear (P2E) gaming scene. The spread of capital and users was followed by a sharp drop in the price of blockchain game tokens and a decrease in players – and the market is still reeling. And, with the fallout from the FTX disaster reaching every corner of the industry, the prospect of play-to-ear looks bleak on the surface. But peeking under the hood, the numbers tell a different story: Strong funding this year has set the stage for serious “building” in 2023.

A consistent stream of strong increases for Web3 game studios has been quietly infusing the market with funding for months. In August, studio UnCaged brought in $24 million, topping the nearly $750 million collected by game studio Web3 that month. The momentum continued until September when Revolving Games raised $25 million, and October, when Odyssey Interactive, Stardust and SkyWeaver pulled in $19 million, $30 million and $40 million respectively. Thirdverse raised $15 million for Web3 games and virtual reality (VR) in November;

These numbers directly contradict the rising asset prices and player enthusiasm about the Web3 gaming space. But even as gamers and tokens falter, venture capitalists are betting big on the future of blockchain gaming. Which studio will win next year? And why?

Instead of gambling on speculation, VCs are betting on experience

One of the important elements in the increase that has taken place in recent months is that the majority of studios that get funding do not do seed or pre-seed rounds. Moreover, they are holding Series As.

Of course, there are exceptions to this rule. Some studios have successfully completed seed or pre-seed rounds. But despite that, the founding team has serious gaming experience. For example, Ruckus Games, which recently raised $5.5 million in seed funding, is a game studio started by former Gearbox and Riot Games developers. This shows that VC is focusing on a studio with a gaming experience – a departure from the early days of Web3 gaming.

During that early period, many Web3 game projects received strong funding without having a clear roadmap for product launch or a founding team with proven experience. Indeed, the YOLO days of late 2021 and early 2022 are long gone. Currently, studios that receive funding have a proven level of success building Web3 games. VCs are now thinking further into the future, even if it is five to ten years down the road.

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While this timeframe may seem like ages in the crypto world, this horizon is normal for studios in traditional gaming environments. The shift to long-term thinking also suggests that studios are starting to realize that individual games have a shelf life – and investing in the studios that build those games is a more effective approach.

How will the crypto game change?

Looking at these increases combined with long-term trends in Web3 games, we can see that some patterns are starting to shape the future of the industry.

So what is the impact of all the increases in a few years?

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We can certainly expect a strong emphasis on mobile games. In September, DappRadar reported that the hyper-casual mobile blockchain game brought more than 1.7 million users from Web2 to Web3 games in a week.

With these changes, it seems that Web3 games will enter the “mainstream” and in the next five years, the global index of the top 100 game studios will contain studios with a strong blockchain element.

Here’s to the long game

We probably haven’t seen the end of the big raises that have happened in the Web3 gaming space this past month. The Web3 gaming hype cycle has officially passed, and the board is in “buidl” mode. And this time, investors are interested in studios that play the long game (pun intended).

This change in focus, combined with significant fluctuations in the larger blockchain technology industry, will create new dynamics and opportunities for builders in the P2E market in 2023. Rising expectations from players and funds will separate the wheat from the chaff. Priorities in 2023 and beyond will focus on quality over quantity. In the end, the one who can create the most outstanding game will win. So the game is on.

This article is for general information purposes and is not intended and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.