🪩This Past Month in Web3 Gaming

February displayed a slight retrace from the unexpected highs seen in January. Encouragingly, we have not returned back down to December’s lows (yet?). In this month’s edition of the Web3 Gaming Roundup, we will take a look at the sector’s performance over the 28 days of February as well as highlight some points of interest including:

ImmutableX’s IMX token returning to August levels.
Gaming wallet interactions and volume decreasing relative to token prices.
The number of funding deals announced jumping 90%.
Square Enix unveiling details for its first Web3 project.
Limit Break and their underwhelming but deceptively bullish Super Bowl ad.
More Web2 talent moving in, some notable game updates, and much more!

📈State of the Market

This month’s metrics were unable to surpass January’s somewhat unexpected highs. However, it is encouraging to see that the total market cap for all gaming-related tokens grew roughly 4% MoM to hit ~$11.9B. Similar to last month, there were a number of significant token unlocks that impacted this figure. ApeCoin, Aptos, STEPN, ImmutableX, Illuvium, Ronin, YGG, and The Sandbox all had large unlocks, with SAND releasing 12.4% of total supply, or $266M at the time of writing.

Compared to last month’s spikes of more than 700% for multiple projects, token trading saw a significant drop in volume in February. As illustrated in the table above, volume turned red across the board. Monthly three-figure percentage growth during a bear market should be considered unsustainable. This drop in trading activity would suggest that many investors took advantage of the previous month’s pump and either took their profits and left or are waiting for a better opportunity to sell. Despite the slight retrace, however, it is important to note that we are still sitting 63% above the lows seen at the end of December.

Several tokens managed to maintain last month’s momentum and continued to increase in price. MAGIC stood out once again as it jumped by 30% in February. This is on top of the 141% growth seen last month.

ImmutableX’s IMX token rose by 49%, making it the top gainer for February. Additionally, the token saw volume spike more than 170% to surpass $100M in 24hrs (figures not seen since July). If the market does reverse back to December lows, $0.4 will be a critical support line for IMX, representing an attractive price for those looking for more exposure to the L2 gaming platform.

According to DappRadar’s data on the total number of unique active wallets (UAW) and transactions for gaming-related protocols, February 2023 saw significant downward movement. Although neither metric adequately represents the actual number of on-chain users interacting with Web3 games, they do portray a rough estimation of overall interest in the space. It is worth noting that both metrics dropped below historically stable levels. UAW, in particular, have fallen below the range of 800k-900k for the first time since early 2021. This could be due to a large number of bots being purged from Web3 gaming