The crypto gaming industry, encompassing games utilizing blockchain-based tokens or NFTs, experienced a remarkable influx of investment last month, securing a collective total of $297 million, according to a collaborative report by DappRadar and the Blockchain Game Alliance. A significant 63% of the funding directed towards the sector in July was allocated to infrastructure development, underscoring the industry’s nascent stage of growth.
The crypto gaming sector secured $297 million in funding
Investors are banking on tools and platforms that will facilitate the emergence of future crypto and NFT-driven games. July’s investment surge stands in stark contrast to June, which witnessed a comparably modest $68 million injected into the crypto gaming space. The report speculates that June’s subdued numbers might have been influenced by broader uncertainties within the crypto sector, stemming from the U.S. Securities and Exchange Commission’s (SEC) scrutiny of industry giants Binance and Coinbase.
However, experts like Carlos Pereira, a Partner at Bitkraft Ventures, caution against reading too much into the monthly fluctuations. Pereira suggests that variations in investment levels might simply be a consequence of sample size and timing, with several major deals possibly spanning both months. The trend of hefty investments in the crypto gaming realm is reinforced by the fact that the sector received over $400 million in funding for each of the preceding three months—March through May 2023.
Insights gleaned from month-to-month analyses are w k often tenuous, especially as many funding deals remain unannounced or face delays in public disclosure. Alok Vasudev, co-founder of VC firm Standard Crypto, explains that the gaming landscape is complex, given the extended development timelines of games. Despite this, Vasudev highlights gaming as a prime use case for crypto, anticipating a continued uptick in investments within the sector.
Fluctuations and the growing momentum in the crypto gaming industry
July marked a series of notable investments, including game publisher Animoca Brands committing $30 million to the crypto “super app” Hi, and artificial intelligence startup Inworld AI raising over $50 million to enhance in-game character dynamics. Valhalla Ventures established a $66 million venture capital fund for gaming and technology, while Futureverse secured $54 million for its crypto metaverse endeavors.
Although certain metaverse-focused companies continue to raise funds, the existing landscape experienced a downturn in NFT prices and overall trading volume. Virtual world games recorded a yearly low of just $5.6 million in traded volume across 10,796 sales in July, as outlined in the DappRadar report. The average sale price per NFT stood at $523.
This decline contrasts sharply with the heights of metaverse hype in 2021, exemplified by the sale of a virtual land plot adjacent to Snoop Dogg in The Sandbox for $450,000. The metaverse NFT market in July was dominated by Yuga Labs, responsible for the Bored Ape Yacht Club. The sales of Otherdeed and Otherdeed Expanded NFTs accounted for 72.5% of the volume traded within the virtual world category. Yuga Labs’ Otherside metaverse game, set to utilize these NFT land plots, remains in development.
As the crypto gaming industry continues to attract substantial investments and witness fluctuations, it underscores the growing relevance of blockchain technology and NFTs within the broader gaming landscape. The sector’s trajectory remains uncertain, yet the trend of continuous funding suggests ongoing interest in the innovative fusion of cryptocurrencies and gaming.
