The Web3 gaming sector’s Q3 2023 fundraising numbers have seen a dip compared to the prior quarter. However, the overall sentiment remains positive, with continued investor interest.
A study by crypto analytics company DappRadar reveals that while the third quarter of this year appeared calm on the surface, there was undeniable momentum within the blockchain sector.
The research highlights,
“There’s a marked trend of established Web2 entities confidently transitioning into the Web3 space.”
Q3 2023 saw Web3 gaming ventures attract $600 million in funds, bringing the total investment for the year to an impressive $2.3 billion, as reported by DappRadar.
While the recent figures represent a significant portion of the funds raised in 2022, equating to 30%, DappRadar emphasizes the importance of understanding the unique market dynamics at play this year.
The company explained,
“While it’s clear that major players recognize vast opportunities in the sector, the fact that current fundraising stands at just 30% of last year’s tally highlights the need to factor in external market influences.”
Notably, the prominent tech-centric venture capital firm, A16z, and its Speedrun accelerator emerged as standout entities in Q3. They have set their sights on investing as much as $75 million in early-stage startups that merge the realms of gaming with cutting-edge technology.
DappRadar’s insights reveal that the current year’s investment trend is characterized by a “substantial allocation” directed towards investment firms, capturing $125 million, or 20.8% of the funding. The game/metaverse segment secured $213 million, accounting for 35.5%, while infrastructure projects received the lion’s share with $262 million, representing 43.6%.
Their analysis suggests,
“This highlights the unwavering trust and dedication that venture capitalists have for the sector’s potential future, indicating their preparedness to support the next big hits in Web3 gaming.”
Even with occasional slowdowns in momentum, the blockchain gaming arena managed to maintain its lead in the decentralized application (dapp) rankings for Q3, as highlighted in the report.
Not Great, But Not Bad
The sum of $600 million raised in the sector begs the question: Is this a substantial amount? Is it meager? This very topic was broached in the October 16 episode of the TechCrunch Equity Monday podcast.
Alex Wilhelm, the Chief Editor of TechCrunch+, who helmed the podcast, put forth the notion that “gaming and crypto are inherently separate.”
Over time, numerous enterprises have amassed hefty capital with the aim of intertwining crypto with gaming. Yet, the lion’s share of these ventures hasn’t managed to resonate with the broader audience. However, there have been shining outliers, with Axie Infinity standing out as a prime example.
Analyzing the figures provides clarity.
As depicted by DappRadar’s data, the Q3 fundraising of $600 million marks a decline from the $973 million amassed by Web3 projects in Q2 of the same year. However, it closely mirrors the $654 million recorded in Q4 2022.
Offering his perspective, Wilhelm remarked, “The drop isn’t substantial, nor is it drastically beneath previous benchmarks. This indicates that investors remain bullish on the convergence of gaming and Web3.”
In summary, while there’s been a downturn for Web3 gaming enterprises in the third quarter, the broader picture doesn’t hint at an overarching pessimistic trend.