Since the establishment of Catheon Gaming, we have been intensely focused on one thing: building and publishing great blockchain games. The blockchain gaming industry has been inundated over the last two years with games that overly rely on the cryptocurrency and tokenomic aspects of their games while under-delivering on producing fun and engaging gameplay. In this context, we have refreshed our business development approach and renewed our efforts to scour the world for traditional games that we believe can bring the ‘fun’ to blockchain gaming.

Over the past year, we have observed the progression of several trends in the gaming industry.

• Mobile game revenues in the first half of 2022 were down 7.5% year-on-year prior to the broader macroeconomic downturn.
• Apple’s new privacy restrictions have reduced the effectiveness of user acquisition on iOS. Paid user acquisition is increasingly becoming a break-even proposition.
• China game licensing restrictions making it nearly impossible to launch new games in the country (China is the #2 market for game spending)
• Macroeconomic conditions have caused venture funding, in general, to significantly dry up.

These factors have caused many traditional game studios to experience challenging economics and many pre-launch titles to be slowed down or put on hold.

Looking specifically at PC games on Steam, some of the thematics that we are seeing are:

• Games had 5.7% fewer players in 2022 than in 2021.
• There has been a 36% average decline in revenue across the whole market between Nov-21 and Oct-22.
• AAA games specifically have seen a drop of 44% in revenue in the same period
• MMO and Racing games have experienced a 73% and 69% decline in revenues, respectively.
• Only 200 of more than 100K games have more than 2K DAUs.

In a sample size of 13,556 games, monthly game revenue across the whole market dropped by 36% between Nov-21 and Oct-22

In a sample size of 13,556 games, AAA games (1,129 of sample) monthly revenue, across all genres, dropped by 44% between Nov-21 and Oct-22

In a sample size of 4,479 games, only 130 games had more than 10,000 daily active users (DAUs)

In a sample size of 4,479 games, 3,061 games had seen their players counts dip by 90% or more from their all-time peak

Games can fail for a variety of reasons. Even if they are exciting games with great gameplay, there can be an issue with marketing, funding, distribution strategy or community building. This means that great games often lose out on their potential due to these factors. At Catheon Gaming, we believe that we can release the full potential of these games by redeveloping them for web3 and seamlessly incorporating new reward and engagement features through the use of NFTs and tokens.

We see a ripe opportunity to partner, invest and create blockchain games. With many studios closing their doors in the past year and many considering shuttering their projects as we head into a recession and a continuing tight fundraising environment, we see significant potential for studios to pivot high-quality IP to a web3 market. Through the web3 best practices that Catheon Gaming can implement with its partners, there is a pathway for traditional game studios to showcase their content and stand out from the crowd due to the relatively small pool of blockchain games currently available.

In the last few months, we have collected and analysed industry data and optimised our outreach process to connect with our targeted game studios at scale and potentially partner with their high-quality IP. After beginning our outreach two weeks ago, we have since reached out to 5.2K entities in the industry across various outreach channels, are in early exploration with 44 studios and are in the mid-to-late stages of discussion and negotiation with ten more. This pace sets us up well to onboard even more new games this year than the 25 titles brought into the Catheon Gaming ecosystem in 2022. Catheon Gaming will continue to expand its portfolio to ensure that we continue to have the largest portfolio in the industry that is unmatched in quality.

As the blockchain gaming market matures and an ecosystem of immersive web3 game experiences develops, we expect there to be genuine, widespread demand for blockchain games that break the mold and drive rapid web3 penetration of the game industry. There is a lot of high-quality IP in the current market that will suffer the effects of a recessionary macro environment and be forced to shut down as consumers tighten their wallets and reduce discretionary spending. This would be both a waste of epic proportions and a missed opportunity to use these IPs to herald a new era of blockchain gaming, driven by maximising playability and quality rather than ponzinomics and low-quality clones. The following two years represent an opportune moment to build and invest in the best IP and to continue to innovate on the core concepts of blockchain gaming and we at Catheon Gaming fully intend to be at the forefront of this movement to a better and more sustainable blockchain gaming industry.

About Catheon Gaming

Catheon Gaming is the fastest-growing integrated blockchain gaming and entertainment company globally, with a portfolio of over 20 games as of 10 June 2022. The company’s flagship franchise, SolChicks, entered the market following successful fundraising from various venture capital investors, institutions, and launchpad partners. The company brings technical, gaming, and marketing expertise together with deep roots in the blockchain industry. The company’s strategy is to partner with leading game developers and IP-holders to incubate and launch “best-in-class” blockchain games and bring them to the widest possible audience.