The crypto gaming industry is showing remarkable resilience in the face of a challenging market environment. According to a recent report from DappRadar, blockchain gaming projects managed to secure approximately $600 million in funding during the third quarter of 2023.
This figure, while impressive, does represent a 38% decrease when compared to the $973 million in investments that poured into the crypto gaming sector in the second quarter of the same year. As of now, the total funding for the year stands at roughly $2.3 billion. It’s worth noting that this amount only accounts for 30% of the total funding received in the previous year, even though 2023 hasn’t concluded yet.
The gaming industry, as a whole, has been grappling with significant challenges throughout this year. Reports from GamesIndustry.biz highlight over 6,100 job cuts in the gaming sector in the past year. Major players like Epic Games, Telltale Games, and Team17 have had to reduce their workforce. Even companies in the crypto gaming space, like ATMTA (the studio behind Star Atlas) and Yuga Labs (the developer of Otherside), have faced staff reductions.
Yuga Labs, known for NFT projects like the Bored Ape Yacht Club, recently underwent a restructuring that resulted in layoffs. Yuga Labs’ CEO, Daniel Alegre, publicly explained that the company had taken on too many internal responsibilities and needed to refocus its efforts while collaborating more with external partners.
The report from DappRadar reveals that a significant portion of recent crypto gaming funding has been funneled into investment firms specializing in gaming. This suggests that venture capitalists, along with their accelerators and funds, will remain a primary source of startup capital for emerging blockchain game studios.
In the third quarter of 2023, investment firms in the crypto gaming sector received $262 million in funding, while $213 million was directly invested in game and metaverse projects. Notably, an additional $125 million was allocated to blockchain gaming infrastructure development.
Axie Infinity, which had previously experienced a major hack in early 2022 after reaching half a million unique active wallets in late 2021, emerged as the NFT title with the highest transaction volume in the past quarter. Over the three-month period, Axie Infinity saw a total volume of $90 million in transactions, according to DappRadar. The NFT trading card game Gods Unchained secured the second position, amassing $55 million in transaction volume during Q3.
The continued dominance of Axie Infinity in the blockchain gaming sector can be attributed in part to the fact that many highly-anticipated NFT games currently in development have yet to be fully launched. Titles like Parallel, Shrapnel, Deadrop, and MapleStory Universe are eagerly awaited by the gaming community.