Funding trends and performance YTD
Disclaimer: Article inspired from InWara. This is not financial advice.
The gaming sector is expected to grow from $108.9 billion in 2017 to $128.5 billion in 2020 according to Statista.com. The adoption levels are increasing, and the sector has jumped to rank 5 in terms of the number of ICOs. Despite this, many projects who have already adapted blockchain in the gaming industry, are facing challenges.
Gaming sector jumps to number 5 in terms of number of ICOs in Q3, 2018
Despite the general slowdown, Gaming sector has seen growth in the number of ICOs from Q2, 2018 to Q3, 2018. In Q2, gaming was at the Xth position from where it has frogged to 5th.
Source: InWara’s Q3 report
Geographical Outlook
USA retains the lead
Gaming ICOs have seen some serious traction in the United States with Refereum alone raising $33 million in their main sale in 2018. As a percentage of total ICOs, USA dominated the gaming sector with 23% of all ICOs.
China: Challenges at 2nd
Despite the rumors of China cracking down on the nascent crypto market, ICOs in the gaming sector have managed to raise $53 million collectively in China.
Estonia: Surprising entrant in the top 5
Surprisingly, Estonia made its way to the top 5 countries by not only drawing venture capitalists but also individual investors to successfully close 7 ICOs in the gaming sector.
Active VCs in this space
Bridgelink Capital
Bridgelink Capital is a UK-based investment firm which focuses on quality early startup investment, to be the leading investment company globally
Genesia Ventures Inc
Genesia Ventures, Inc. is a Japan based venture capital firm focusing on seed to pre-series stage investment.
Winter Capital
Winter Capital is a private equity and venture capital firm specializing in startup and growth capital investments operating mainly in Russia and Europe.
Block VC
BlockVC is one of the leading blockchain and digital asset management firm with an exclusive focus on projects, tokens, and ventures related to blockchain technologies.
8 Decimal capital
8 Decimal Capital operates as a venture capital investment focused in the United States.
Challenges faced by the Gaming industry
Creating a token is easy. Listing it is the challenge
Listing has been one of the prime challenges adversely impacting the sector. The listing rate in the gaming sector was 33% in 2017 and dipped to 30% in 2018.
While this rate is better than other sectors such as Healthcare, this still bodes unfavorably to individual investors and liquidity remains the primary concern.
However, the potential use of those tokens as casino tokens can alienate pressure, if adoption is strong.
Returns on Investment: Gaming sector returns were not favoring the odds
Although the Gaming sector was successful in terms of number of ICOs, the returns in Gaming sector ICOs were not good. Only 3 of the 36 listed ICOs delivered positive RoI, and what’s worse, they declined steadily over 2018.
The average RoI of Gaming sector after witnessing an all time high in early 2018, have steadily slid downwards. Pundits have been betting on the overall Gaming sector to thrive and thus drive growth in the performance of the ICOs in the sector.
Top Fundraisers - Gaming Sector
Top 5 ICOs raised 60+% of total funds in the sector
Game Credits tops the list by raising $106 million and Mediarex Enterprise raised $65 million — both in 2017. It is interesting to note that a majority of these rounds are from and blockchain/digital asset accumulators and not specific VCs as virtual money has been a part of gaming for the last 10 years. Refereum was the most successful with $33 million raised in 2018.
The sector is expected to have a higher community support. Gamers have traditionally used fiat currency (i.e. USD) to purchase gaming items and this is expected to be conducive to the adoption of digital currency.
GameCredits
GameCredits: Founded in 2014.
The GameCredits Mobile Store aims to be an alternative choice and the first one built around cryptocurrency to solve issues in the larger gaming industry.
After two years of development with gaming industry leaders, Datcroft LTD., Game credits are close to completion of development of the first crypto mobile gaming store. MobileGo tokens will be used to gamify the mobile platform and to incentivize gamers for loyalty and participation through rewards.
Mediarex Enterprises Ltd
Mediarex Sports & Entertainment: Founded: 2012
Mediarex runs ChiliZ, a tokenized voting platform that empowers fans to crowd-manage sport and e-sports organizations.
Headquartered in Gzira, Malta, Mediarex Sports & Entertainment (S&E) is a gaming event, statistics & ranking company.
ENJIN Pte Ltd
Enjin: Founded: 2008
Enjin is a decentralized gaming platform that aims to provide a solution for the existing issues in the gaming industry.
Enjin is a gaming platform launched in 2009, based in Singapore. Enjin provides community management services (CMS) platform for gamers, developers, clan leaders, server owners, etc. They have 250,000 gaming communities across thousands of games and 18.7 million registered gamers.
REFEREUM
Refereum: Founded in 2017
The RFR Utility Product Token is a digital token on the Ethereum blockchain with an ability to execute code it will be held in a digital wallet.
Refereum, Inc. was incorporated in September 2017 and its Management team comprises specialists in the game industry.
DMarket
Dmarket: Founded in 2017
DMarket aims to provide an opportunity for every gamer to perform easy, one-click buy/sell, exchange, and evaluation of every possible game asset, item, skin, or another game object.
DMarket, a blockchain-based marketplace, helps connect all games and platforms together.
Where is this data coming from?
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