As the first quarter of 2025 comes to a close, the Web3 gaming industry finds itself at a critical turning point. According to DappRadar’s latest State of Blockchain Gaming report published on April 10, the sector is facing a challenging environment – but not without signs of resilience and strategic growth.
While investment in blockchain gaming has dropped significantly, investor activity remains steady, with more deals being signed than ever. The focus is shifting from hype-driven funding to long-term infrastructure and scalable gaming ecosystems.
Web3 Gaming Investments Fall 71% in Q1 2025
Web3 gaming projects raised $91 million in funding during Q1 2025. While this may sound impressive, it represents a sharp 71% decline from Q4 2024 and a 68% drop compared to Q1 2024.
DappRadar analyst Sara Gherghelas explained that early-stage blockchain gaming startups are facing increased pressure due to uncertain market conditions. She warned that “2025 may prove more challenging than previous years, unless broader market conditions improve.”
Fewer Big Checks, More Deals
Despite the fall in capital, investor interest in Web3 gaming hasn’t disappeared – it’s evolving.
While total funding shrank, the number of deals finalized during the quarter actually increased by 35% compared to the previous quarter. According to Gherghelas, this shows that investors are now spreading their bets across multiple projects rather than committing large sums to a few.
“Investors are writing smaller checks but still actively engaging with a broader range of projects,” she noted.
This more cautious investment approach aims to balance risk while exploring the long-term potential of blockchain gaming technology.
Gaming Infrastructure Attracts Investor Confidence
A key trend in Q1 2025 was the growing focus on Web3 gaming infrastructure. Rather than funding individual games, investors are backing projects that build the technical foundation for scalable and innovative gaming ecosystems.
Gherghelas highlighted that this signals continued confidence in crypto gaming, but with an emphasis on sustainable growth. “Investor confidence in the long-term potential of Web3 gaming remains intact,” she affirmed.
Key Infrastructure Projects Leading the Way
Two standout projects dominated the Q1 2025 blockchain gaming landscape:
MARBLEX’s Semi-Publishing Model
South Korea’s Netmarble, through its blockchain division MARBLEX, launched a Semi-Publishing Model to support a wider ecosystem of Web3 games. This effort is backed by a $20 million joint fund in partnership with Immutable, a leader in NFT gaming technology.
The Game Company’s Cloud-Based Gaming Platform
Dubai-based startup The Game Company raised $10 million on February 6 to develop a cloud gaming platform powered by blockchain technology. Their goal is to enable users to play any game on any device, with blockchain ensuring security and interoperability.
A Maturing Web3 Gaming Industry
The strategic shift toward infrastructure signals that blockchain gaming is entering a more mature phase. Developers and investors are prioritizing quality, interoperability, and AI-enhanced gameplay over quick wins.
As Gherghelas explained, the emphasis is now on creating sustainable ecosystems through improved gameplay, decentralized identity layers, and integration of artificial intelligence technologies.
Blockchain Gaming is Evolving, Not Declining
In summary, while crypto gaming investment in Q1 2025 has slowed, the increase in deal activity and infrastructure funding shows a sector evolving through restraint and resilience.
As Web3 gaming moves beyond its early hype cycle, the industry is laying the foundation for long-term success, focusing on scalability, real-world utility, and innovative gaming experiences powered by blockchain technology and AI.
The next phase of NFT gaming and Web3 gaming won’t be about quantity – it will be about building the infrastructure and ecosystems needed for sustainable growth.
