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Off The Grid (OTG) is blockchain’s most successful battle royal shooter game, which was developed by Gunzilla Games. Specifically, the game is hosted on an Avalanche L1 labeled GUNZ. Since its early access release in October 2024, the game has achieved significant milestones, including thousands of active players across PlayStation 5, Xbox Series X/S, and PC via the Epic Games Store.

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Blockchain Gaming in 2024

As of late 2024, blockchain gaming has begun to mature into what is now a vibrant and respected sector within crypto, spanning both casual games (like those found on platforms like Telegram) and complex AAA titles such as OTG. The sector’s expansion has been driven by unprecedented growth in the blockchain gaming market, which is expected to grow from roughly $154 billion in 2023 to well over $600 billion by 2030. This value is being driven primarily through the integration and separate growth of decentralized finance (DeFi) and the adoption of NFTs, which allow players to obtain true ownership over their in-game assets.

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The blockchain gaming sector truly got going CryptoKitties in 2017 - a game that helped popularize NFTs as digital collectibles. While a slow start, CryptoKitties more or less opened the door for more developed projects to come in next, most prominently with the massive explosion in interest in Axie Infinity in 2021. Axie Infinity drew in millions of players and billions more in venture capital investment. While the investments have cooled off some since the previous bull market ($575 million raised through H1 2024 vs $2.3 billion in H1 2022), user adoption is actually at record highs. Notably, daily active users (DAUs) reached 5.21 million in September 2024—a 145% increase since 2021.

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Of course, the standout story of the year in blockchain gaming is none other than OTG, which is the first ever AAA Web3 title to successfully launch on legitimate major gaming consoles like PlayStation 5 and the Xbox Series X/S. OTG’s high-quality, immersive experience has bridged a gap between blockchain technology usage and mainstream gaming that previously felt impossible. OTG has onboarded over 4 million new wallets and recorded 800,000 DAUs since its launch.

The Convergence of Web2 and Web3 Gaming

With the launch of OTG on major gaming platforms, the boundary between traditional gaming and blockchain gaming continues to blur as major game studios, technology providers, and platform owners increasingly explore Web3 integrations. This trend has been seen in many different cases, such as Sony’s recent launch of its own Layer 2 blockchain, Soneium. Sony’s blockchain ambitions, launched in August 2024, have set a new precedent, attracting attention from both developers and gamers. These moves, alongside advancements in Unreal Engine, Unity, and AI-driven development tools, have made high-quality game production more accessible to indie studios, allowing them to compete with AAA titles on innovation and creativity.

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OTG exemplifies this trend, building on the established battle royale genre (think Fortnite) while using Avalanche’s blockchain tech to enable a transparent, verifiable, player-driven economy. In contrast to previous Web3 games that focused primarily on economic incentives, OTG provides a gameplay-first experience, with blockchain features like asset ownership and peer-to-peer trading serving as optional enhancements rather than core requirements. This approach enables OTG to appeal to traditional gamers by offering a familiar, high-quality gaming experience with the added benefit of economic ownership.

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OTG’s success points to a growing synergy between Web2 and Web3 gaming models, where blockchain infrastructure adds depth to well-established virtual economies without compromising player experience. Inspired by player-driven economies in games like Counter-Strike and World of Warcraft, OTG leverages blockchain technology to create a similar yet enhanced model for asset ownership and trading. Blockchain offers peer-to-peer marketplaces and verifiable scarcity, giving players more agency over their digital assets. However, OTG demonstrates that engaging, high-quality gameplay remains crucial, as a compelling game is essential for retaining players, regardless of the underlying economic model.

Avalanche L1 Gaming

Avalanche is a Layer 1 blockchain platform designed with an architecture that supports the creation of highly customizable, independent blockchains within its ecosystem. These unique blockchains, known as “L1 chains” (formerly subnets), are specifically optimized for scalability, speed, and flexibility, making them an attractive choice for applications like blockchain gaming. By offering separate, application-specific chains with their own governance, token economies, and virtual machines (VMs), Avalanche L1s provide developers with the necessary autonomy to tailor their chains precisely to their use cases.

Avalanche’s primary network consists of three main chains—the P-Chain, X-Chain, and C-Chain—each with distinct functions that support the platform's consensus and functionality:

• P-Chain: Manages the platform’s staking and validator operations, enabling the seamless creation and coordination of subnets. This chain is fundamental to the creation of new L1 chains, as it helps developers set up independent chains that are validated by selected nodes.
• X-Chain: Handles asset creation and transactions within the Avalanche ecosystem, acting as a decentralized platform for assets and transactions, with a design optimized for asset transfers and exchanges.
• C-Chain: A fully Ethereum-compatible chain, leveraging the Ethereum Virtual Machine (EVM) to enable smart contract functionality and compatibility with the Ethereum ecosystem. This interoperability is crucial for developers aiming to build and migrate applications from Ethereum.

How Avalanche L1 Chains Operate and Their Benefits for Gaming

Each Avalanche L1 chain (or subnet) is essentially its own independent network, validated by nodes that meet specific criteria defined by the subnet creator. These L1 chains can operate under entirely different rules from one another, allowing for customization across various parameters:

• Token Standards and Virtual Machines: Avalanche L1s support a range of virtual machines, including the EVM, WebAssembly (WASM), and Avalanche’s native VM, giving developers the flexibility to build on the platform of their choice. This adaptability is particularly beneficial for gaming projects, where unique token standards or logic might be necessary to enable in-game economies, NFTs, and complex gaming mechanics.
• Gas Fee Models and Compliance: Developers can set up proprietary gas tokens or customize fee structures to optimize user experience and address compliance needs. For example, they could use low or fixed transaction fees to enhance accessibility, integrate KYC features, or implement unique staking mechanics that incentivize player engagement.
• Network Congestion Mitigation: By allowing projects to run on isolated, purpose-built chains, Avalanche mitigates the risk of network congestion, a common bottleneck for dApp-heavy blockchains. Each game or application can operate independently of others, ensuring stable and predictable performance even during periods of high demand. This structural advantage is vital for games like OTG, where peak activity, such as live events or large battles, could strain network resources and affect gameplay quality.

Avalanche L1s also offer a notable edge with their near-instant finality—a feature that traditional gaming platforms lack. This allows in-game transactions and NFT trades to process almost instantly, enabling seamless trading of digital assets, efficient item transfers, and responsive gameplay. For a blockchain game like OTG, which requires rapid updates to player data and real-time interactions, Avalanche’s finality ensures that player actions are recorded and validated without delays, providing a smooth experience.

While Avalanche’s L1s provide a promising foundation for gaming projects, the ecosystem remains in the early stages of adoption, with only a few L1 chains like OTG’s GUNZ network achieving significant traction. The success of OTG serves as a proof-of-concept for Avalanche’s potential to scale and support complex gaming environments, offering a glimpse into how decentralized gaming might evolve. So really, overall, OTG is a major strategic win for Avalanche, underscoring the potential that Avalanche L1s have as a gaming launchpad.

Off the Grid’s Breakout Moment

On October 8th, 2024, about five years after beginning development, Gunzilla unveiled OTG as an early access game, making it the first-ever AAA blockchain gaming title to be released on PC and console. OTG is set in a dystopian cyberpunk-style universe, with players going to battle within the environment known as Teardrop Island - one of the largest battle royale maps ever. The game supports up to 150 players per match, blending traditional player-versus-player (PvP) combat with player-versus-environment (PvE) missions. This hybrid approach allows players to engage in dynamic firefights while undertaking narrative-driven objectives that influence the game's evolving storyline.

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A distinctive feature of OTG is the "Extraction Royale" mode, where players not only aim to be the last standing but also focus on collecting valuable in-game items known as "Hexes." These Hexes contain blueprints for weapons, cybernetic limbs, and other enhancements. Successfully extracting these items from the battlefield enables players to mint them as NFTs on the GUNZ L1, facilitating true ownership and the ability to trade assets via a decentralized marketplace.

With a development budget exceeding $90 million and a team of over 340 professionals, Gunzilla Games truly delivered a promise that just about every other blockchain gaming studio has failed to do so far - produce a real, AAA-equivalent blockchain gaming title. Not to mention, their budget did not go to waste; the involvement of notable figures such as director Neill Blomkamp and author Richard Morgan has further enhanced the game's narrative depth and cinematic quality.

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Metrics

Since its early access release, OTG has built up some impressive performance metrics, highlighting the game’s appeal and the strength of its underlying blockchain infrastructure. From launch, OTG attracted a large influx of users, with over 7 million wallets created on its Avalanche-based GUNZ blockchain as players flocked to experience its unique blend of battle royale and narrative-driven gameplay. Among these users, the game has sustained approximately 500,000 DAUs. This level of blockchain activity places OTG among the top blockchain-integrated games, outpacing many other Web3 gaming titles and marking a significant achievement for the Avalanche ecosystem.

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In addition to on-chain engagement, OTG’s launch strategy included heavy influencer marketing, successfully leveraging popular gaming personalities to drive initial awareness. On October 10, two days after its release, OTG reached a peak of 150,000 concurrent viewers on Twitch, supported by major gaming influencers like Ninja, TimTheTatman, and Shroud. This spike in viewership generated strong early interest, as many of these influencers highlighted OTG’s Web3 components and explained blockchain features in accessible terms to their audiences. Despite this initial success, however, viewer numbers experienced a gradual decline post-launch. By October 23, the average number of concurrent viewers on Twitch had decreased to approximately 565 after promotional efforts had ended.

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In-Game Economy and Market Impact

 A core component of OTG’s player-driven economy lies in the ability to mint in-game assets, such as weapons, cybernetic limbs, and gear, as NFTs that can be traded on a secondary decentralized marketplace. Although OTG’s primary in-game utility token, GUN, has yet to be released, the game’s marketplace remains active, with player-minted NFTs contributing to a vibrant trading ecosystem. In addition, PERC - a token associated with a DAO that invested in nodes on the GUNZ network—has seen a significant price increase of over 500% in response to OTG’s success, reflecting strong market sentiment and enthusiasm for the game’s economic potential.

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Regarding network activity, in the three weeks leading up to OTG's early access release, the GUNZ subnet averaged approximately 1.4 million transactions per day. Following the launch, this number more than doubled, averaging over 3.1 million daily transactions. On the day of the launch, the subnet processed around 622,000 transactions, marking a 350% increase from the previous day. 

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Over the subsequent week, transaction volume grew by an additional 40% each day, peaking at 4.5 million transactions on October 15. Since then, the GUNZ subnet has consistently averaged more than 3.4 million transactions per day. The fees generated by the GUNZ subnet mirrored its transaction count. Before the early access launch, the subnet generated an average of just 4.8 GUNZ per day. Post-launch, this figure increased to over 40 GUNZ per day. 

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GUN

The future GUN token will be central to the in-game economy of OTG, supporting a player-driven ecosystem within Gunzilla Games' custom Avalanche-based GUNZ blockchain. Players can earn GUN tokens through various in-game activities, including completing missions, achieving performance-based rewards (like kills or extractions), and trading looted items in the marketplace. This structure incentivizes active gameplay and aligns rewards with skill and engagement, enhancing the player experience.

Once acquired, GUN tokens can be used in several ways that deepen  the gameplay. Players can mint valuable in-game items, such as weapons and cosmetic gear, into NFTs using GUN tokens, establishing true ownership and enabling trading within the GUNZ marketplace. Additionally, the tokens can be used to purchase exclusive in-game items and access OTG Pro, a premium membership offering enhanced earning rates and exclusive content.

The GUN token is expected to operate through a deflationary model, where a portion of tokens are burned during item minting processes, potentially driving up the token’s value over time by limiting supply. In addition to the OTG ecosystem, there are plans under consideration for broader integration within the GUNZ blockchain, possibly allowing trading on external platforms. This expanded functionality could enhance the token’s utility, reinforcing OTG’s appeal as a pioneering Web3 game with a sustainable, player-centric economy.

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Challenges for OTG

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Off-Chain Challenges

OTG's initial metrics are impressive, with 900,000 daily active users (DAUs)—a rarity in the Web3 space. However, the competitive shooter genre is dominated by major franchises like Call of Duty, Fortnite, and Apex Legends, which boast large, loyal player bases, significant marketing resources, and strong cross-platform presences. OTG will need to differentiate itself to avoid the typical drop-off many games face after an initial surge. For example, The Finals, another shooter, initially attracted a large player base but quickly lost traction, while Apex Legends achieved long-term success through a slow, steady growth strategy with consistent content updates and player engagement.

The timing of OTG’s launch presents another challenge, as Call of Duty: Black Ops 6 debuted just two weeks later. In response, Gunzilla has postponed the release of OTG's 60-hour campaign to better position its rollout alongside a planned token generation event (TGE) for its GUN token. However, maintaining player engagement over time will likely require a continuous stream of updates and content via LiveOps. For OTG to establish lasting relevance, it must excel in both gameplay quality and ongoing content innovation.

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On-Chain Challenges

OTG’s blockchain-related challenges center on creating sustainable utility for its GUN token and managing an in-game economy that delivers genuine value without excessive speculation. Many GameFi ecosystems face issues with token inflation, as tokens are often issued to drive engagement but lack sufficient use cases, leading to imbalances. Unlike traditional gamers who spend on in-game items simply for gameplay enhancement, Web3 players are often profit-focused, making it difficult to balance genuine utility with speculative demand.

For GUN to thrive, OTG must avoid unsustainable inflation and focus on a value-driven economy that encourages spending on gameplay-enhancing items rather than speculative gains. Introducing token sinks, such as mechanisms that burn or lock tokens, could create scarcity and stabilize value. Nonetheless, for any GameFi model to succeed long-term, gameplay quality must remain central. Gunzilla’s focus on making gameplay itself the core appeal of OTG could set it apart, but ensuring that GUN's utility complements rather than detracts from the gaming experience will be essential.

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Summary

The success of Off The Grid, blockchain’s first AAA gaming title, really does represent a breakthrough moment not only for on-chain gaming but also for Avalanche’s L1s. Running entirely on the custom GUNZ Avalanche L1 network, the game showcases Avalanche’s capability to support high-performance, console-ready gaming. Not to mention, OTG itself has truly set a new standard for blockchain integration into mainstream gaming, likely accelerating the development interest and adoption of Avalanche L1 chains for other applications.

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Overall, OTG’s achievements in blending immersive gameplay with true asset ownership breaks down a long coveted barrier for blockchain games - being adopted by real traditional PC and console players. 

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Disclaimer: This report was commissioned by Ava Labs. This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.