2021 State of the Industry Report

2
Table of Contents
REPORT SUMMARY ………………………………………………………………\
………………………………………………………………… 3
LETTER FROM THE BGA PRESIDENT ………………………………………………………………\
………………………………. 4
BGA BOARD MEMBERS UPDATE ………………………………………………………………\
………………………………………. 5
2021 CONSUMER UPDATE ………………………………………………………………\
………………………………………………….. 6
SURVEY OVERVIEW ………………………………………………………………\
………………………………………………………………\
. 8
ADOPTION OF BLOCKCHAIN GAMING ………………………………………………………………\
……………………………. 10
WHY BLOCKCHAIN FOR GAMING? ………………………………………………………………\
…………………………………… 12
INDUSTRY CHALLENGES ………………………………………………………………\
………………………………………………………. 13
WHAT’S NEXT FOR PLAY-TO-EARN? ………………………………………………………………\
………………………………… 17
CLIMATE CONTROVERSY ………………………………………………………………\
……………………………………………………… 18
FUNDING THE NEW FRONTIER ………………………………………………………………\
………………………………………….. 19
CAREERS IN BLOCKCHAIN GAMING ………………………………………………………………\
……………………………….. 20
REGULATORY UNCERTAINTY ………………………………………………………………\
…………………………………………….. 22
PROTECTIONS AND PITFALLS ………………………………………………………………\
……………………………………………. 23
HOW TO GET INVOLVED ………………………………………………………………\
……………………………………………………… 24
BGA BOARD OF DIRECTORS ………………………………………………………………\
………………………………………………. 25
BGA MEMBERS OVERVIEW ………………………………………………………………\
…………………………………………………. 26
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Report Summary
Founded in 2018, the Blockchain Game Alliance (BGA) is a member organi\
zation of over 300
members including leading and upcoming gaming studios, major blockchain \
protocols,
as well as individuals within the blockchain gaming community.
This report aims to document BGA members’ perspectives on the challenges and
developments shaping the current state and future of blockchain gaming. \
It includes
data from an online survey conducted in September 2021, the purpose of w\
hich was to
distinguish the industry’s key themes over the past year and ensure that the BGA’s plans
for the coming year are consistent with the needs of its members.
SURVEY RESPONDENTS
34%
identify as gaming
professionals.
A smaller group (27%)
identify as blockchain
professionals. 81%
have been in their
current role for under
three years. 42.5% have
been in it for less than
a year.
60%
work at companies with
less than 50 employees.
25% work at companies
with less than 10
employees.
INDUSTRY DRIVERS
68%
say play-to-earn has
been the biggest
driver behind industry
growth. 83%
value gameplay as the
most important aspect
when assessing games
overall.
85%
say that true ownership
of digital goods is the
most important aspect
of blockchain games.
MOVING FORWARD
86%
believe at least some of
the traditional gaming
industry will use
blockchain within two
years. 52%
say regulatory
uncertainty is their
biggest concern and
the industry’s most
significant challenge.
43%
say education about
the core concepts
underpinning
blockchain gaming is
the next biggest pain
point.
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Letter from the
BGA President
When the BGA was formed in 2018, we were just eight members, and it’s\
fair to say that
blockchain gaming was still pretty niche back then. Fast forward to toda\
y and we have
over 300 members, with 198 of those having joined us in just the last tw\
elve months.
With funding flowing, user adoption figures skyrocketing and the world’s leading media
publications reporting on our rise, this is the most exciting period in \
blockchain gaming
the world has ever seen, and certainly, in the six years that I have bee\
n personally involved.
With the spotlight on blockchain gaming, we have also seen increased scr\
utiny around
issues such as a lack of clear understanding of what blockchain gaming i\
s, the benefits
of blockchain gaming for developers and users, the environmental impact \
of NFTs and
the regulatory gray areas surrounding digital assets. While some of this\
critique has been
balanced and thoughtful in promoting constructive discussion regarding t\
he challenges
ahead, other commentary has been poorly researched and has done little o\
ther than
fuel FUD (fear, uncertainty and doubt). The latter has surely contribu\
ted to some deeply
disappointing actions, such as Valve’s recent decision to ban blockch\
ain games from its
digital distribution service, Steam.
As such, it is now more important than ever that we mobilize to fight \
misinformation
and plug the knowledge gaps. And with the alliance having doubled its si\
ze this year, we
wanted to take a moment to check in with our members and survey their vi\
ews on how
our industry’s narrative is evolving.
The purpose of the survey was to identify the most important themes at t\
his point in
our industry’s development and ensure that the BGA’s roadmap for 2\
022 is in line with
member needs. With 64% of respondents identifying themselves as founders\
or C-suite
executives, the perspectives in this report represent a truly global gro\
up of industry leaders
and professionals across 51 countries.
Women, however, count for just one in five survey respondents, which tells me we must
do more to ensure adequate gender representation in the conversation. Th\
e
BGA has committed to strengthening diversity and inclusion via a range o\
f
initiatives over the past years, and we will bolster those efforts moving forward.
I want to say how delighted I was to see that gameplay and experience is
still the number one focus for our industry. I fell in love with video games
long before I discovered blockchain, and I am glad to see that all of us\
are
committed to delivering amazing experiences for gamers.
Thank you to everyone who took the time to respond to our survey.
The positive response we received is a good start, and we will continue
building the momentum over the coming year.
Sebastien Borget, President, Blockchain Game Alliance
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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BGA Board Members Update
The BGA currently has over 300 members
across 56 countries. We welcomed 198 of those
members in 2021, marking a membership
growth of 186% from 2020.
We have also had new members joining the board. We are delighted to welc\
ome Piers
Kicks, whose participation will ensure that venture capital is represented for our members,
thanks to his experience at BITKRAFT and Delphi Digital. BGA also extend\
s its thanks to
Caty Tedman of Flow and Sam Englebardt of Galaxy Interactive who recentl\
y stepped
down from their board positions.
Members and member projects have also closed huge funding rounds and received great
media coverage in 2021. Animoca Brands achieved unicorn status with a ca\
pital raise of
US$88,888,888 in May, then went on to raise another US$138 million in Ju\
ly, and another
US$65 million led by Ubisoft in October. Dapper Labs took the world by s\
torm with NBA
Top Shot generating US$230 million in gross sales in Q1, January to Marc\
h. Meanwhile, Axie
Infinity became the first game to surpass US$1 billion in NFT sales \
(now over US$3.6 billion),
and the short documentary “Play-to-Earn: NFT Gaming in the Philippines’’ produced by
Emfarsis, Yield Guild Games and Delphi Digital, received coverage on CNB\
C, and has since
been viewed over 750,000 times on YouTube.
As part of the core activities of the BGA, we had 17 educational webinars covering a range
of topics such as “NFT New Frontiers: Applications and Economies,” “Women Founders &
Play-to-Earn Games” and “End-User License Agreement (EULA) and Terms and Conditions
(T&Cs) for Blockchain Games” in response to our members’ interest. With more members
joining in the alliance and covering various facets of the blockchain ga\
ming industry, we
are optimistic that more opportunities for collaboration will take place\
among projects in
this space.
Piers Kicks, head of crypto at BITKRAFT, said, “As gaming and the Metaverse collide, I
look forward to engaging with our members to ensure that we tackle some \
of the major
issues ahead of us so that blockchain gaming and crypto adoption continu\
e to empower
players and studios alike. Definitely, I am optimistic that there will\
be more developments
coming in the blockchain gaming industry.”
Details of the current BGA board members can be found ahead of the member listing at
the end of this report.
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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2021 Consumer Update
This summary was prepared in collaboration with BGA member, DappRadar. As a curator
of blockchain game asset information and related statistics, DappRadar p\
roduces monthly
as well as quarterly reports on the subject. These are some of the highl\
ights found in the
DappRadar 2021 reports.
HIGHLIGHTS
A total of 2.5 million
Unique Active Wallets
(UAW) connected to
blockchain dapps on a
daily average, making
blockchain games
responsible for half of
all blockchain usage. Metaverse-related activity
exploded during the rst half
of 2021, fueled by virtual land
sales that hit US$42.6 million.
Growth has continued with the
market cap for virtual world
dapps reaching an all-time high,
surpassing $4.6 billion at the end
of November.
Blockchain metaverses and play-to-
earn were two of the most talked
about topics in the Asia region,
growing 33% month-over-month while
reaching 1.7 million mentions across
Asian media outlets. The metaverse trend is dominated by
the US. However, the Asia presence
is becoming more visible with India,
Singapore, and Indonesia increasing
their audience by 500%.
The migration of
Axie Infinity from
Ethereum to the
Ronin sidechain
helped Ronin
become the number
one blockchain
platform in NFT
trading volume. In
June 2021, Ronin
processed US$124.2 million in gaming
NFT transactions versus Ethereum’s
US$16 million. Polygon also got
off to a great
start in 2021, led
by Aavegotchi’s
transition from
Ethereum to
the second layer
platform. Some
other considerable blockchain game
titles have more recently followed suit,
including Decentraland, Ember Sword,
F1 Delta Time and The Sandbox. Like
WAX, Polygon’s low transaction fees
render it an attractive alternative to
Ethereum.
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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KEY STATISTICS
The following are some statistics compiled from several reports, represe\
nting data collected
since January 1, 2021:

● Game footprint became more visible in NFTs as in-game collectibles gener\
ated US$2.32
billion in sales during Q3, representing 22% of total NFT trading volume indust\
ry-wide.

● The number of wallets relating to gaming activity increased 2,453%, from\
29,563 during
the first week of 2021 to 754,000 in Q3 2021.

● Axie Infinity dominated blockchain gaming NFT trading volume for the fi\
rst half of
the year, reaching a record-high US$2.5 billion in trading volume in Sep\
tember and
surpassing sales records of NBA Top Shot and CryptoPunks.

● The WAX blockchain experienced the most new user adoption, with the numb\
er of
active wallets growing 1,082% on a quarter-over-quarter basis. This was \
led in sales by
Alien Worlds, which saw more than two million transactions in the second\
quarter.

● Splinterlands became one of the most played games in the industry, with the trading
card game attracting over 245,000 daily Unique Active Wallets in Septemb\
er, up
3,267% from the end of Q2.

● From January to November 2021, the top five games with the most Unique Active
Wallets are Alien Worlds, Axie Infinity, Splinterlands, CryptoMines, a\
nd Bomb Crypto.
“ Blockchain gaming has firmly established itself as the
industry’s darling. With the consumer growth participating
in blockchain games, dapp and gaming trends will come
together into something even bigger and potentially all-
encompassing: the Metaverse. We’re headed towards a
complete shift in how we form communities, create, play,
trade and socialize. Blockchain gaming is catalyzing the
establishment of the virtual hubs that will host this new
digital life.”
Dragos Dunica
Co-founder, DappRadar
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Survey Overview
OBJECTIVE
The purpose of the survey was to assess the views of BGA members and blo\
ckchain gaming
professionals on the state of the industry and the challenges and opport\
unities that lay
ahead. This was to ensure alignment between the BGA’s future activities and industry
priorities as determined by its membership base.

METHODOLOGY
The Blockchain Game Alliance engaged Emfarsis Consulting to design and e\
xecute the
member survey.
The 20-question survey covered the topics of careers, growth, adoption a\
nd various key
issues facing the industry today among 212 professionals from the blockc\
hain gaming
sector. Prior to designing the survey, Emfarsis conducted 11 interviews \
to ensure that BGA
board member and member perspectives were considered in creating the sur\
vey. The
members interviewed were Lisa Chandler (Alien Worlds), Chris Clay (Gods Unchained and
Immutable), Marc Coupal (Enjin), Ludovic Courcelas (ConsenSys), Gia\
nluigi Guida (Guida &
Associates), Jon Jordan (BlockchainGamer.biz), Piers Kicks (BITKRAFT\
), Aleksander Larsen
(Axie Infinity and Sky Mavis), Shaban Shaame (EverdreamSoft), Serena Tabacchi (MoCDA)
and David Tng (TZ APAC).
The survey was open to individuals who consider themselves working in the blockchain
gaming industry. One of the key distribution channels of the survey was \
the BGA database
consisting of members and other partners. However, the survey was not re\
stricted to BGA
members, as it was shared publicly on BGA-owned channels (LinkedIn and \
Twitter) and
voluntarily shared by many members in their network.

The results were collected via a dedicated surveying tool (SurveyMonkey\
) from September
2 until September 24, 2021. They were analyzed using both the platforms’\
own analysis
tools and classical statistical analyzing tools (SPSS).
RESPONDENTS
A total of 212 professionals representing 118 different projects or comp\
anies in the
blockchain sector responded to the survey.
61% of respondents were BGA members. The remaining 39% were not members
of the BGA.
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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RESPONDENT DEMOGRAPHICS
AGE
8%18-24
48.6% 25-34
30.7%35-44
11.3%45-54
1.4%55 & ove r
JOB
TENURE
42.5%Less than 1 y ear
38.2%1-3 years
7.1%4-5 y ears
12.3%Over 5 year s
GENDER
77.4% Male
20.3%Female
1.9% Prefer not to sa y
0.4%Non-binary
LOCA TION
35%Europe 33%Asia
14% North Americ a 9% South America
7%Australia
2%Africa
The respondents who answered the survey were mostly middle-aged males (\
almost
80%), working for blockchain gaming companies (56%) in middle- and to\
p-management
positions (77%).
Females were less represented (20%) in the sample. Women who answered \
the survey
were generally younger than the male respondents and were more likely to\
have held their
current position for less than five years. There were also less women \
in founding positions
(16% of women respondents were founders, compared to 37% of men).
Aminata Cissé, lead community manager of The Sandbox, said, “While I have seen
improvements since I first entered the blockchain gaming industry, it still lacks diversity
and inclusion in some parts. I think we can achieve this by adding more \
representation in
our games and visuals, and most importantly, by hiring more women and mo\
re people
of color.”
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Adoption of
Blockchain Gaming
Interest in blockchain gaming has been growing steadily through 2021. Th\
e graph below
shows the global search interest according to Google Trends. Blockchain \
gaming, NFT
games and play-to-earn keyword searches saw a significant increase around the first week
of July 2021.
Play-to-earn NFT games Blockchain games
In addition, DappRadar’s report data shows a 6,566% increase in daily\
unique active wallets
(UAW) interacting with game-related smart contracts, rising from 23,100 in Q3 of 2020 to
1.54 million daily in Q3 of 2021.
Jon Jordan, editor-at-large of BlockchainGamer.biz, said, “What’s been fascinating about
2021 is how quickly complex topics such as NFTs and play-to-earn mechani\
cs have
generated excitement (and sometimes anger) across a very wide cross-section of the
global gaming community. Obviously, the main drivers of this have been b\
lockchain-
first projects such as NBA Top Shot and Axie Infinity. But what I’\
m looking forward to in
early 2022 is when experienced traditional game teams start launching th\
eir first wave
of products.”
When asked about blockchain adoption at their current workplace, 91% of \
respondents
said the company they work for has embraced the technology to a high or \
very high extent.
This skewed result is reflective of the survey sample, given blockchai\
n gaming professionals
were the primary target.
TO WHAT EXTENT HAS YOUR ORGANIZATION EMBRACED BLOCKCHAIN TECHNOLOGY?
74%
To a ve ry
high ex tent
17%
To a high
ex tent
5%
To a
lo w ex tent
2%
To a ve ry
lo w ex tent
3%
Not at all
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Over half (55%) of survey respondents said their company had been usin\
g blockchain
technology for more than a year, while 11% were more recent adopters (w\
ithin the last 12
months). 16% intend to launch their first blockchain product or title\
in the next 12 months.
WHAT IS YOUR COMPANY’S EXPOSURE TO BLOCKCHAIN?
Intending to run a
blockc hain trial within the
next 12 months
Launching a blockc hain
product or title in the next 12 months
0% 55%
11%
16%
3% 6%7%
2%
A
dopted bloc kchain for more
than 12 months
A dopted bloc kchain in
the last 12 months
No intention to adopt
blockc hain in the ne xt 12
months
Serv ice pro vider with minimal
focus on bloc kchain
Serv ice pro vider predominantly
focused on bloc kchain
Don’t kno w / No ans wer Small companies (less than 10
employees) were 3.5 times more
likely to be launching a blockchain
product or title in the next year
compared to larger companies.
At a regional level, respondents
from North and South America
were twice as likely to have
already been using blockchain for
more than 12 months.
Regardless of their own plans
to adopt blockchain, 86% of
respondents said they believe
that at least some of the gaming
industry will leverage blockchain
technology in the future, while
37% think that most of the
gaming industry will leverage
blockchain within the next two
years, if not all of it.
“Give it 10 years and
you won’t find a single
game not being built
on the blockchain.”
Kieran
Warwick
Co-founder,
Illuvium
HOW MUCH OF THE GAMING INDUSTRY IS LIKELY TO LEVERAGE BLOCKCHAIN
WITHIN THE NEXT TWO YEARS?
All of it
Most of it
Some of it
Only a fe w
Don’t kno w /
No answ er 6%
31%
13%
1% 49%
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Why Blockchain for Gaming?
85% of survey respondents agree that asset ownership is the most important advantage
of blockchain games as the technology delivers digital property rights a\
nd allows players
to have true ownership of their in-game assets. This is in contrast to t\
he traditional
practices of centralized gaming platforms that strictly prohibit the sal\
e of in-game assets
on external markets. An example of this played out in Chinese courts thi\
s year when
Tencent, the largest video game publisher in the world, sued DD373.com for US$6.2
million worth of damages for allowing players of Dungeon Fighter Online to trade in-
game assets on their site.
HOW DOES THE GAMING INDUSTRY BENEFIT FROM BLOCKCHAIN TECHNOLOGY?
Respondents were given the option to select more than one answer.
Asset ow nership
for pla yers
Ne w revenue
models
Play er re ward
models
Dec entr alize d
project ow nership
Tr ansparency
Ne w c ollabor ations
Creativity and gamepla y
Prov able f air
mechanics
Impro ved data
security
Co nvenient data
management
Lo we r transaction
costs
Other
Don’t kno w /
No answ er
2%
86%
74% 71%
56% 50% 47%47%
38%
24%22%
17%
1%
New revenue models (74%) and player reward models (71%) ranked secon\
d and third
respectively as the greatest benefits of blockchain gaming.
Blockchain gaming has introduced the play-to-earn model that empowers ga\
mers to own
their in-game assets and earn rewards in return for contributing their t\
ime and skill to
playing the game. While this has obvious benefits for players, it has \
also opened up new
possibilities for developers and publishers to earn revenue from the sal\
e and open trading
of these assets. In the case of scholarships, where yield-generating NFT\
assets (such as the
NFT creatures needed to play Axie Infinity) are purchased and then leased to new players
under a revenue-sharing model, this can even serve to externalize user a\
cquisition costs for
games looking to gain traction without the traditional marketing budgets associated with
launching a new product.
Supreet Raju, co-founder of OneRare, said, “Blockchain gaming will not be an extension
of the current gaming industry; it will be a disruption that redefines gaming. With play-
to-earn models and asset ownership, gamers will become an integral part \
of the system
rather than passive consumers. Blockchain gaming will be the most powerf\
ul tool for
bringing the crypto-curious to Web3 and converting interest into partici\
pation.”
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Decentralized project ownership (56%), which relates to the existence \
of decentralized
autonomous organisations (DAOs), and transparency (50%), were also c\
ited as key
advantages to blockchain gaming. With new types of decentralized organizations being
enabled by the blockchain, transparency around the way that projects and\
people work is
highly valued by industry professionals.
Industry Challenges
Despite the positive sentiment from the survey, the blockchain gaming in\
dustry is not
without its challenges. When asked about its main pain points, survey re\
spondents were
presented with 15 industry-related issues.
WHAT ARE THE PAIN POINTS FOR BLOCKCHAIN GAMING?
Respondents were given the option to select more than one answer.
Regulator y uncertainty
Need for educ ation
T echnology limitations
Poor user ex perience
Gamepla y quality
Lack of technic al experts
Lack of industr y standards
Difficult to implement Too niche
Lack of on/off  ramps
Lack of interoper ability
Insufficient mark et size
Resistanc e from incumbents
Limited applic ability
T oo dec entralized
Other
Don’t kno w / No ans wer
52%
43% 42%42%
34%31%30%30%
26% 22%22%
20%
13% 7%2% 2%2%
52% of respondents cited regulatory uncertainty as the main challenge. Regulation will
be an issue for all crypto assets, particularly as various jurisdictions\
determine how they
will deal with NFTs in the years to come. In-game assets, if not structu\
red properly, can
be treated as securities under some laws. In particular, NFTs have also \
introduced a new
conundrum for many jurisdictions when it comes to intellectual property \
(IP) rights and
ownership of non-fungible assets. There is also confusion surrounding th\
e patentability of
blockchain games and collectibles that needs further education within th\
e industry.

BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

14
Gianluigi Guida, name partner at Guida & Associates, said, “Technology is moving fast,
and lawmakers cannot keep up with its pace. That said, a framework or se\
t of rules
is needed to help the developers in understanding the boundaries that sh\
ould not be
crossed. Having clear rules in place and acting in accordance with them \
is fundamental
in order to gain trust from the general public, and this will eventually\
lead to the mass
adoption of cryptocurrencies.”
Katherine Ng, head of marketing and operations at TZ APAC, said, “Know Your Customer
(KYC) and Anti-Money Laundering (AML) regulations are important to protect consumers
against scams, and they need to be balanced against blockchain gaming in\
novation
and the ability to reward game creators and players fairly.”
43% of participants highlighted that a lack of understanding of the core\
concepts
underpinning blockchain gaming was an obstacle blocking broader adoption\
. This was
reiterated by survey respondents when asked about the most common miscon\
ception
about the industry, as 59% of the respondents said that users who do not\
understand
blockchain gaming assume that it is a Ponzi scheme or scam.
Dan Kelly, co-founder of NonFungible.com, said, “More often
than not, development studios are opting for centralized
‘blockchain’ solutions, which completely defeat the purpose
of blockchain. The biggest challenge that we see is regarding
education. Many new entrants are joining the space simply
as a marketing tool, ignoring the value proposition and
power of decentralized blockchain technology.”
Other issues included the current limitations of blockchain
technology, particularly with reference to scaling (including
high transaction fees and slow speed of transactions), and
poor user experience, which were cited equally by 42% of
respondents.
The following were also listed as common challenges, but of
lower priority:

● Lack of technical experts

● Lack of on/off ramps

● Insufficient market size

● Limited applicability
Only 13% of respondents thought that resistance from industry
incumbents, or their unwillingness to adopt decentralization
technologies, would pose a challenge to blockchain gaming.
Public debate has raged over the likelihood that traditional gaming companies will integrate
blockchain into their popular games, as not everyone is so bullish on NF\
Ts. Valve recently
banned all blockchain-based games on its Steam platform. Meanwhile, Epic\
Games “will
welcome games that make use of blockchain tech provided they follow the \
relevant laws,
disclose their terms and are age-rated by an appropriate group” in their Epic Games Store,
but will not use crypto in their own published games, according to CEO T\
im Sweeney.
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

1515
Nicolas Gilot, co-CEO of Ultra, said, “Valve’s recent ban on all blockchain-based games on
Steam heavily restricts those wanting to embrace blockchain technology. \
Ultra Games,
the games distribution application within the Ultra platform, provides a\
comprehensive
solution to this and welcomes all game developers to tokenize any and all parts of
their games. Ultra delivers a range of customization options, revenue split, marketing
opportunities and a robust blockchain infrastructure to take NFT creatio\
n and distribution
to the next level.”
However, the BGA survey data suggests that blockchain gaming professiona\
ls are not
overly concerned about this lack of blockchain readiness in traditional \
video games.
“While it is too early to fully grasp the full impact blockchain will\
have on
traditional gaming, it holds the potential to bring a new dimension for \
players
and developers to play with. By positively shifting the balance of power\
towards
players, blockchain can make for a fairer, more player-centric experienc\
e.
Traditional gaming will never disappear, but it will surely evolve, gran\
ting players
more control than ever over their experience.”
Nicolas PouardVP – Strategic Innovation Lab, Ubisoft

Despite the challenges cited in the survey, respondents had confidence\
that the following
factors will continue to drive the industry forward:
WHAT WILL DRIVE BLOCKCHAIN GAMING FORWARD?
Respondents were given the option to select more than one answer.
Play -to-earn mechanics
and ec onomy
Game improve ments
Ad option of gaming fr anchises
Ease of use
Tr ansaction c osts
To p talents entering the spa ce
Decrease in co sts to start
Digital rights and ow nership
T echnology improve ments
Major studio in volv ement
Clearer cr ypto regulations
More game releases
Improved interoper ability
More events for promotio n
and educa tion
Hardwa re impro vements
Inclusiv e strategies
Don’t kno w / No answ er
68%
56% 51%5 1%
46% 43%42%
38%36%34% 33%33%
30%
15%10%1 0%
2%
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

16
68% of respondents stated that play-to-earn mechanics and economy will b\
e the main
force driving industry forward. As a new category in gaming where player\
s are rewarded
with in-game cryptocurrencies that can be exchanged for fiat money, pl\
ay-to-earn has
spurred new demand and fueled growth for young game studios. It has also\
had a significant
impact on emerging economies, such as the Philippines and Latin America, where play-to-
earn games such as Axie Infinity have become a source of income for pl\
ayers, particularly
amid the COVID-19 pandemic and resulting job losses. The play-to-earn phenomenon
attracted new users as well as mainstream media attention that put block\
chain gaming’s
potential in the spotlight.
While play-to-earn was deemed most likely to drive broader industry grow\
th, the
professionals surveyed were inclined to focus on gameplay as the most im\
portant aspect
of the games themselves. 83% of respondents said that the most important\
factor in
assessing a blockchain-based game is quality of gameplay, demonstrating \
that the industry
is committed to improving this aspect of play-to-earn.
Lenny Pettersson, CEO of Antler Interactive, said, “There are already good, fun and very
successful games out there, but to achieve true mainstream adoption, qua\
lity and
accessibility need to be further improved. With that said, I´m very e\
xcited about the level
of quality and gameplay in the next generation of blockchain games curre\
ntly being
developed, not least in our very own, My Neighbor Alice.”
56% of respondents believed that continual game improvements, particular\
ly to elements
such as gameplay and graphics, would be the next most important effort t\
o advance the
blockchain gaming industry, after the introduction of play-to-earn incentivization models.

“The number one thing that will drive mass adoption will be, in my
view, involvement from top gaming talent. Right now, blockchain
gaming is being built by blockchain developers, with the gameplay
as a secondary consideration.”
Davis GraingerMarketing Manager, Binance Australia
Small companies (1-10 employees) were twice as likely as their mid-sized counterparts (11-
50 employees) to think that releasing a greater number of blockchain ga\
mes would charge
industry growth.
Adoption of gaming franchises was listed by 51% of respondents as having\
the potential to
greatly influence the growth of the industry.
BGA member Animoca Brands is known for producing franchised NFT collecti\
bles and
blockchain games such as F1® Delta Time and MotoGP. Animoca Brands ch\
airman, Yat
Siu, said, “At Animoca Brands, we already count Ubisoft, Scopely, Gamevil and Sq\
uare
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

17
Enix as shareholders. They invested because they have a deep interest in\
the potential
of blockchain gaming, and it’s reasonable to expect more game franchi\
ses entering the
space — very soon.”
Ease of use was the third important factor, chosen by 51% of respondents\
. According to
Camilo Torres, Creator Fund production manager and artist at The Sandbox\
, “If blockchain
games want to become the real future of video games and not just a porti\
on of the
gaming industry, it needs to solve a lot of usability issues to make it \
user-friendly for
the common gamer and to focus on designing better gaming experiences. Ri\
ght now,
blockchain game designs feel too focused on monetization.”
What’s Next for
Play-to-Earn?
68% of respondents agreed that play-to-earn has been the biggest driver \
behind industry
growth in 2021, spurring exponential user adoption and attracting mainst\
ream media.
Here, BGA members offer their thoughts on what to expect over the coming\
year.
“Further
entrepreneurialism
will continue to show
itself as it has done
notably in Alien
Worlds. Players have
been ingenious in
developing products
and services that
they offer to other
gamers. Utility
NFTs give inventor-
entrepreneurs more
tools to create their
own products and
services.”
Sarojini McKennaCo-founder,
Alien Worlds
“Play-to-earn is entering a new historic chapter
with the advent of mainstream Metaverse
structures. This will attract not only the 2.7
billion mainstream gamers but potentially the
entire global population, making play-to-earn
economies like Star Atlas synonymous with the
global economy and GDP.”
Michael WagnerCo-founder and CEO, Star Atlas
“Play-to-earn is still evolving. More games are
getting built and bigger businesses are building
them. We will start to see even more adoption
as big brands with large following get into this
space.”
Aggroed LighthackerCo-founder, Splinterlands
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18
Climate
Controversy
A criticism of blockchain technology, particularly by the traditional ga\
ming industry
and mainstream media, is its perceived environmental impact. However, on\
ly 15% of
respondents to the BGA member survey cited environmental concerns as an \
important
aspect when assessing a blockchain game.
A greater number of respondents (25%) were focused on protocol selecti\
on. Environmental
impact — as well as security, speed, decentralization and transaction costs — are all factors
that make protocol selection an important aspect of blockchain game deve\
lopment.
Many blockchain protocols are prioritizing sustainability as a feature. \
Ultra is carbon
negative, and is CarbonNeutral® energy usage certified. Layer 1 protocols such as Tezos,
Algorand, Avalanche, Enjin, NEAR and WAX have also outlined their roadmap to be carbon-
neutral. Australian-based Layer 2 solution, Immutable X, is building on \
technical concepts
such as ZK-rollups (SNARKS/STARKS) and consumes less than 1% of the energy required
for an Ethereum trade. Immutable X, along with Polygon is also investing\
in carbon offsets.
“A shift towards Proof of
Stake networks have
massively reduced
environmental impact by
the very nature of how they
work. Many projects are
already embracing this, but
it is probably the fastest
and smartest way for the
industry to negate energy
concerns.”
Sandeep NailwalCo-founder, Polygon
“There are rising concerns over the
sustainability and energy consumption
of not just blockchain gaming, but
the blockchain industry, as a whole.
Fortunately, there is an increasing number
of eco-friendlier blockchains that game
developers can now choose to build on
as the industry grows, such as Tezos.
Game developers can now prioritize
their selection based on the features and
benefits that are most consistent with
their community’s needs and values.”
David TngHead of Growth, TZ APAC
“At Immutable, we believe that creating an environmentally sustainabl\
e
platform is a baseline requirement to empower this amazing shift in powe\
r
from incumbents to content creators. Ultimately we believe we just need \
to
show the way blockchain technology can be applied in a way that benefi\
ts that
game and gamers without serious environmental impacts.”
Chris ClayGame Director, Gods Unchained
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19
Funding the
New Frontier
2021 has seen a dramatic increase in the funding of blockchain games. Ac\
cording to BGA
member BlockchainGamer.biz, an estimated US$4 billion has been invested in blockchain
gaming in the year of of 2021 with the top five by investment raised b\
eing:
“2021 was the year blockchain in
gaming truly emerged. At scale,
gaming companies’ financing, games
infrastructure and game design have
all seen utilization, adoption and
thereby proof of blockchain technology
in our industry. And as a result of that,
blockchain technology has captured
serious attention from the gaming
industry and the gamer community
at large. Blockchain technology has
now set the stage for one of the most
impactful and disruptive changes in
the gaming industry.”
Jens HilgersFounding General Partner, BITKRAFT

● Forte: $900 million

● Sorare: $783 million

● Dapper Labs: $607 million

● Mythical Games: $270 million

● Animoca Brands: $221 million
The potential of blockchain and NFTs
in the gaming world has attracted
major investors including Andreessen
Horowitz (a16z), Arca, BITKRAFT
Ventures, Coinbase, Galaxy Interactive,
and Softbank among others.
BITKRAFT has over six years of experience
in traditional gaming venture capital.
In October 2021, BITKRAFT launched a
US$75 million token fund for blockchain
games.
“DAOs are a new model for blockchain
games to raise capital, with
decentralized ownership allowing
players to become part-owners in the
game economies to which they bring
so much value. More importantly,
guilds like YGG are making sure that
those without money can contribute
their time and skill instead, and still
get a meaningful share in these player-
owned economies.”
Gabby DizonCo-founder, Yield Guild Games
Another emerging form of fundraising is
coming from decentralized autonomous
organizations (DAOs). Some prominent
examples include 3D Gamers Guild,
AngelDAO, Avocado Guild, BlackPool,
BlockchainSpace, Good Games Guild,
Merit Circle, Ready Player DAO, UniX
Gaming, and Yield Guild Games.
Blockchain gaming focused incubators
and launchpads are also a way for
projects to fundraise, such as Seedify.
fund, Enjinstarter, Solanium, Polkastarter
and Moonstarter.
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

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Careers
in Blockchain Gaming
The majority of survey respondents said they were new to the blockchain \
gaming industry,
with 42.5% having been in their current role for less than a year, and a total 81% having
worked in the space for less than three years.
Overall, 34.4% of survey respondents described their current role as bei\
ng in the gaming
space while 27.4% said their role was focused on blockchain or cryptocur\
rency.
Prior to their current role, 26.9% of respondents were working in gaming\
. This is compared
to 9.4% that said they were previously working in blockchain or cryptocu\
rrency.
22.9% said they had been working in marketing or public relations previo\
usly, but only
15.1% still held the same title within blockchain gaming. Likewise, 17% \
were previously
working in infrastructure and software development, but only 7.1% said t\
hey held the same
title now. This suggests that the blockchain gaming industry represents \
a significant career
shift for many newcomers.
Horizon Blockchain Games co-founder, Michael Sanders, came from the adve\
rtising
industry prior to focusing on blockchain games. According to him, “Gaming is one of
the most fun ways we can introduce blockchain to the world. By creating \
games and
applications that are fun and user-friendly, we can welcome the masses t\
o Web3, the
next generation of the internet, where both users and creators can share\
in the value
generated by the networks they participate in.”
PA ST
ROLE
1.9%Other
4.2%Journalism/ Media 9.9%Ad min, Sales,
Oper ations & Legal
9.4%Block chain/
Cr yptocurrency
6.6%Finance /
Banking
26.9%Gaming
22.6%C ontent,
Marke ting & PR
17.0%Infr astructure &
Soft ware Development 7.1% Infr astructure &
Soft ware Development
3.3%Finance /
Banking
1.9%Other
1.4%Journalism/ Media
9.4%Ad min, Sales,
Oper ations & Legal
34.4%Gaming 27.4%Block chain/
Cr yptocurrency
15.1%Content,
Marke ting & PR
CURRENT
ROLE
Sales, operations, admin and legal roles within blockchain gaming made up 9.4% of
respondents. For people in these types of jobs, there was little contras\
t between their
current and previous roles.
BLOCKCHAIN GAME ALLIANCE 2021 MEMBER SURVEY & REPORT

21
Only 3.3% of respondents viewed their current role as finance or banki\
ng-focused, but
twice as many said their previous role would have fit into this catego\
ry.
60% of all respondents worked for companies with less than 50 employees,\
of which 25%
were employed companies with less than 10 employees. Only 19.3% of respo\
ndents worked
for companies with over 100 employees. In contrast, from the traditional\
gaming industry,
nearly half of the respondents (47%) to the International Game Developers Association
(IGDA) 2021 Satisfaction Survey worked for companies of more than 100 people.
Meanwhile, only 8% of our survey respondents said they were employees of\
companies
with 251—1,000 employees. This was also the only group that did not consider top talent
entering the blockchain gaming space as a key driver to move the industr\
y forward.
COMPANY SIZE
5.2%
Don’t kno w /
No ans wer
8.0%
250+
Employees
11.3%
101-250
Employees
15.1%
50-100
Employees
34.9%
11-50
Employees
25.5%
<10
Employees
Founders and C-level are up to four times more likely than regular employees to believe
that the lack of specialists (e.g. engineers and smart contract develop\
ers) was a challenge
for the blockchain gaming industry.
“It is indeed a challenge for
GameFi companies to find
talented blockchain specialists
or engineers. But moreover, the
difficulty at the current stage
is to find one who understands
how to create a game that
hooks and retains users.”
Ikuma UenoHead of Crypto Strategy,
Digital Entertainment Asset Pte. Ltd.
“Increasingly, projects are
turning to innovative models,
like the DAO, as one way
to help attract, retain and
reward the right talent to
projects through shared
ownership.”
Beryl LiCo-founder,
Yield Guild Games
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22
Regulatory Uncertainty
More than half (52%) of survey respondents said that regulatory uncert\
ainty was their
biggest concern and the most pressing challenge for the blockchain gamin\
g industry.
The following is an overview of some of the potential legal and complian\
ce issues that may
arise in blockchain gaming within the context of U.S. law. It is not a c\
omprehensive list and
must be evaluated based on all locally applicable laws.
1. Tokens as Securities. Some currencies,
NFTs and other tokens may be securities
depending on how they are structured
and offered. The test is whether they are
an “investment contract,” which includes
1) an investment of money in a common
enterprise, and 2) an expectation of profits
derived from the efforts of others (e.g.,
presale of tokens with proceeds used to
build the platform).
2. Token Marketplaces as Security
Exchanges. If a token marketplace or
platform offers trading of digital assets
considered as securities, the law requires
compliance with securities exchange
rules.
3. Gambling. The risk of gambling exists if
players stake or risk something of value
on some chance- based activity to win a
prize or something of value. Digital assets
traded on secondary markets may cause
the items to be deemed things of value.
4. Money Transmitters. When a crypto game
company engages in certain financial
activities involving virtual assets deemed
to be a convertible virtual currency, they
may be a money transmitter subject
to stringent AML/KYC requirements.
Enforcements are increasing.
5. Blockchain-based Virtual Worlds.
Blockchain-based virtual worlds are
thriving and offer a variety of business
models. In some, users can purchase
parcels of land and other digital assets
and create, experience and monetize
these assets and other content. Over
time, there have been a number of legal
issues with traditional virtual worlds. All
of these issues should be considered with
blockchain-based virtual worlds, plus the
issues addressed above.
6. Patents. There are many misconceptions
about the patentability of blockchain
technology and games. If the criteria
for patentability are met, there is no
prohibition to patenting any software,
including blockchain technology, game
mechanics and game technology. It is
harder to get some of these patents,
but this should not stop developers
from seeking patent protection where
appropriate. It is important to work with
a patent attorney who specializes in these
areas to understand what aspects of
blockchain and game technology can be
patented and to draft applications in a way
that maximizes the likelihood that it will
be granted and be enforceable.
The above is an excerpt from “Legal Issues
With Blockchain-Based Crypto Games and
Collectibles” by James Gatto of Sheppard
Mullin.
James Gatto leads Sheppard Mullin’s
Blockchain Technology and Digital
Currency Team and co-heads its
Social Media and Games Team.
Sheppard Mullin is a member of the BGA and
an AmLaw 100 law firm with offices located in
the United States, Europe and Asia.

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Protections and Pitfalls
Intellectual Property Law for Blockchain Game Developers
Players and game developers may view blockchain technology as the ideal \
path to both
monetization and an unforgettable user experience. Blockchain game devel\
opers should
take care, however, to install adequate protections for their own intell\
ectual property (IP)
as well as ensuring they do not infringe on trademarks, copyrights, righ\
ts of publicity and
other privileges belonging to other IP holders.
OWNERSHIP OF IN-GAME PROPERTY
NFTs offer a means for proving ownership of in-game assets or other virt\
ual possessions
that may hold real-world value for collectors or players. Developers nee\
d to understand
that NFTs must adhere to IP laws wherein ownership of an NFT representin\
g the item is
a matter of contract where the only thing “owned” is the digital t\
oken itself. The in-game
item it represents is subject to a license that may grant broad commerci\
al rights or limited
personal-use rights. Generally, NFT terms merely grant buyers the right to reproduce, create
derivative works or sell prints or copies of the object.
In-game assets that use or resemble company logos, cartoon characters or\
famous real
people could run afoul of trademark, copyright and publicity rights prot\
ections. This is
especially true in the case of user-generated content in which the NFT minter is not the
asset owner or where game developers have acquired a license but not the\
title — to the
intellectual property.
MONETIZATION
Blockchain game developers can leverage their own intellectual property \
in several ways,
on and off the blockchain.

● Sale — Selling IP is the end-game for some serial entrepreneurs and investors. \
Their goal is
to perfect a technology’s application and sell it to a business that \
wants to implement it.

● Licensing Agreements — Game developers may allow other producers to use the IP
they develop for a specific purpose, timeframe and financial conside\
rations. They may
license their IP to several companies at the same time and even continue\
to use it
themselves, depending on the agreements they sign.

● Litigation — Regardless of whether you use your IP, if others use it without permissi\
on,
you will likely maintain the right to assert a claim for damages. In som\
e cases, litigation
is the business model, or an important part of it.
Complex issues of ownership and license rights and restrictions become m\
ore complicated
in a blockchain environment. In addition, securities laws, gambling regulations and financial
services business restrictions may apply once tradable assets are involved. Developers are
well advised to engage experienced legal counsel to reduce the risk of I\
P liability or lost
value and to comply with applicable laws.
David Hoppe is the founder and managing partner of Gamma Law, a San Francisco-based firm
supporting select clients in cutting-edge business sectors. Gamma Law pr\
ovides clients with the
support required to succeed in complex and dynamic business environments\
, to push the boundaries
of innovation and to achieve their business objectives, both in the U.S.\
and internationally.
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24
How to
Get Involved
With the goal of spreading awareness
about blockchain technologies and
encouraging adoption by highlighting
its potential to foster new ways to create,
publish, play and build strong communities
around games, the BGA