The third quarter of 2024 saw a dramatic decline in investment in the blockchain gaming industry, with total capital falling by 56%. Even though they account for more than 25% of all on-chain activities, the funding rounds have become much smaller.
Q3 Funding Drops for Blockchain Games
In Q3, blockchain games brought in just $128 million, down from $296 million the year before. With NPC Labs leading the quarter with $18 million in seed funding for its B3 scaling network, which is intended for gaming applications, this represented a sharp drop in the amount raised.
Total Funding for Blockchain Gaming Year-to-Date
Funding has totalled $748 million so far this year, with $324 million raised in the first quarter. When compared to the same time period in 2023, this number indicates a 31% decrease. According to the total amount raised thus far, this year is expected to be the slowest since the industry raised $88 million in 2020. As a reference, financing was $1.7 billion last year, $5.3 billion in 2021, and $4 billion in 2020.
A Sharper Decline Is Shown by the DappRadar Report
A more alarming picture is shown in a different DappRadar study. With the industry earning just $110 million in Q3 compared to $1.1 billion in Q2, it shows a 90% decline in funding for Web3 games. The figures demonstrate how severe the investment slump is.
A Strong Start to Q4 Could Help the Sector Rejuvenate
The fourth quarter is beginning to show hints of improvement, despite the dismal Q3 numbers. Recently, Azra Games revealed that it has raised $43 million for Project Legends, its planned fourth-generation mobile role-playing game. The $35 million that Parallel Studios raised in March was surpassed by this investment round, making it the biggest of 2024.
Overall Reduction in Funding for the Blockchain Sector
Blockchain gaming is not the only industry experiencing a fall in financing. According to Galaxy Digital’s study, $2.4 billion was spent in Q3, representing a 20% quarter-over-quarter decline in venture capital investment in the blockchain industry overall.
Web3 Gaming Continues to Be Essential to Blockchain Activity
Web3 gaming is still an essential component of the blockchain ecosystem, despite a slowdown in funding. According to DappRadar’s research, 26% of all decentralised application activity in Q3 was related to gaming. Furthermore, there were 4.4 million daily unique active wallets, a 21% rise over the previous quarter.
2024 Prospects for Blockchain Gaming
This year, blockchain gaming was predicted to rise rapidly. According to a survey by the Blockchain Game Alliance, 20% of the gaming sector is expected to use blockchain technology by 2024, which may be worth $70 billion. Nevertheless, despite the sector’s crucial position in the larger blockchain business, its future is still questionable as funding is drying up.
