Blockchain gaming experienced a mixed start to Q1 2023, according to a report by DappRadar and the Blockchain Game Alliance. The report shows that gaming increased its dominance from 42.87% in Q4 of 2022 to 45.60% in Q1 of 2023, despite the number of daily unique active wallets (dUAW) decreasing by 8.58% from the previous quarter. The rise of Polygon, previously known for decentralized finance (DeFi) dapps, to third place in the gaming activity leaderboard was a notable development. This indicates that it is carving market share and is popular among blockchain gamers, showing that its efforts to establish itself as a platform for blockchain gaming are starting to bear fruit.

Alien Worlds and Splinterlands were the most popular games in Q1 2023, with Alien Worlds dominating 66% of WAX.io activity, with an average of 223,945 dUAW, and Splinterlands claiming 99% of Hiveblocks activity, averaging 127,242 dUAW. Despite the slight decline in on-chain gaming activity in Q1 2023, the report highlights that a total investment of $739M was pumped into blockchain gaming and metaverse projects in Q1 2023, a 12.95% increase from the previous quarter, showing investors are still bullish on the potential of blockchain gaming and willing to pour money into promising projects. The pandemic has posed challenges to the industry, but the wider economic landscape is positive for its future growth.

In conclusion, Q1 2023 has been an eventful quarter for blockchain gaming, with ups and downs. However, the overall trend is positive, and it shows that blockchain gaming has the potential to become a major force in the wider gaming industry. As more developers and investors get involved, we can expect more exciting developments and innovations in the coming months and years.