$70B blockchain gaming opportunity projected for 2024

Over half of all blockchain gaming developers expect at least 20% of the $347 billion gaming industry to integrate blockchain within the next year, a new report has revealed.

The 2023 State of the Industry Report by Blockchain Game Alliance (BGA) polled 526 professionals from the rapidly growing industry, from founders and developers to professional esports players and community managers.

Three in four respondents cited asset ownership as the top benefit of integrating blockchain technology in gaming. With blockchain, players fully own their in-game assets, which can live on even if the game shut down. Some ecosystems allow users to transfer their assets across the network between different games.

“The resounding consensus among gamers is crystal clear — ownership isn’t just a feature; it’s the heartbeat of blockchain games and, by extension, all of web3,” commented Yat Siu, the chairman of Animoca Brands, the makers of The Sandbox.

The survey found that over half of the sector expects blockchain to play a prominent role in the gaming sector, with 52.1% predicting that at least 20% of the overall gaming market will integrate blockchain at some point next year.

This would be a massive opportunity, with the gaming industry being one of the largest in the entertainment world—bigger than Hollywood and music combined. One source estimates the sector worth around $350 billion; if 20% integrated the technology, it would unlock a $70 billion opportunity for blockchain and give it inroads into an industry with over 3 billion users.

To unlock this opportunity, Web2 gaming studios will be critical, a third of the respondents believe. While native blockchain games like CryptoFights continue to rack up big numbers, they pale compared to traditional gaming giants. However, these Web2 firms have been warming up to the technology, and industry professionals expect this to kick on in 2024.

The Web2 firms exploring blockchain include French giant Ubisoft (NASDAQ: UBSFF), which reignited its interest this month through a partnership with Immutable for a non-fungible token (NFT) game. Japan’s Square Enix (NASDAQ: SQNXF) has also been betting on the technology, partnering with blockchain firms such as Gumi and Elixir.

The sector still faces major headwinds, with 55% of the respondents pointing to onboarding as the most significant, while 35% cited user acquisition. However, the biggest challenge, according to the report, is the false perception by the masses that blockchain gaming is a scam. With the technology inexplicably tied to digital assets, most of which are just speculative and have no utility, a large segment of the public still views it as a scam.

Yet another unique challenge unearthed by the report is the dwindling numbers of female representation in the sector. While the number of respondents has doubled over three years, BGA revealed that female respondents have dipped from 20.3% to 16.9%.

BGA President Sebastien Borget commented that this is an industry-wide issue that needs to be addressed to ensure diversity and promote a variety of perspectives across the board.

Despite the challenges, blockchain gaming made significant strides in 2023. The sector recorded over 786,000 new unique active wallets in the third quarter alone and has secured close to $4 billion in funding.

“Blockchain will move away from being a game’s USP and instead work in the background as a fundamental technology,” commented Robert Baggs, the founder of Token Gamer.

Watch: Unlocking the potential of blockchain gaming