Web3 Gaming Investment Falls 71% in Q1 2025, Despite More Deals

Web3 Gaming Sees 71% Funding Drop in Q1 Despite More Deals as Investors Remain Cautious

  • Web3 gaming projects saw a 71% drop in investment to $91 million in Q1 2025 compared to Q4 2024.
  • Despite lower investment amounts, the number of blockchain gaming deals increased by 35% quarter-over-quarter.
  • Infrastructure-focused projects received the majority of funding, indicating continued long-term investor confidence in Web3 gaming.

Blockchain gaming investments dropped significantly during the first quarter of 2025, according to a new report from analytics platform DappRadar. Web3 gaming projects raised just $91 million in Q1, representing a 71% decrease from the previous quarter and a 68% decline compared to the same period last year.

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The April 10 "State of Blockchain Gaming" report characterized the sector’s performance as a "mixed bag," noting that despite the substantial funding decrease, the actual number of blockchain gaming-related deals increased by 35% compared to the fourth quarter of 2024.

DappRadar analyst Sara Gherghelas attributed the investment decline to "growing pressure on early-stage startups," suggesting that "2025 may prove more challenging than previous years — unless broader market conditions improve." She also noted that investors are increasingly directing their attention toward real-world assets and Artificial Intelligence rather than blockchain gaming.

Cautious Investment Despite Continued Interest

The contrasting trends of decreased funding amounts alongside increased deal volume reveals a shifting investment landscape. Gherghelas explained that "while investors are writing smaller checks, they’re still actively engaging with a broader range of projects — indicating continued interest, albeit with more cautious allocation."

This pattern suggests investors remain interested in the Web3 gaming space but are adopting more conservative funding strategies amid broader market uncertainties.

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Infrastructure Projects Lead Funding

Infrastructure-focused projects claimed the largest share of Web3 gaming investments in Q1, with most centered on developing scalable gaming infrastructure. According to Gherghelas, this focus signals that "investor confidence in the long-term potential of Web3 gaming remains intact."

Notable projects highlighted in the report include MARBLEX, the blockchain gaming division of South Korean developer Netmarble, which announced plans for a Semi-Publishing Model supported by a joint fund exceeding $20 million with Immutable. Additionally, Dubai-based startup The Game Company received $10 million in February to develop a blockchain-based cloud gaming platform.

As the Web3 gaming industry continues to mature, Gherghelas observed a "clear push toward quality, innovation, and interoperability" across the sector, whether through gameplay improvements, new identity layers, or AI-enhanced mechanics.

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