Investments in Web3 gaming projects surged to $60 million in July, reversing a three-month lull, with investors now focusing on games built around fun, according to blockchain analytics platform DappRadar.
March still has the highest month for Web3 gaming funding this year at $69 million, but after a slump in April, May and June, capital is flowing again โprimarily to projects with proven teams, strong IP, or infrastructure supporting multiple games,โ DappRadar analyst Sara Gherghelas said in a report published on Thursday.ย
However, smaller studios are suffering, and projects without traction or sustainable economies are closing or pivoting, according to Gherghelas.
โItโs a Darwinian stage for Web3 gaming: tough for small players, but potentially healthy for long-term stability.โ
Investors backing โfun-firstโ Web3 games
Investors have also shifted to favor games focusing on fun first, with optional blockchain elements and back-end tech like wallets, artificial intelligence tools, and crosschain systems, rather than as an afterthought. ย
Gherghelas said in the short term, there will likely be fewer but stronger Web3 game releases, cross-platform launches, and brand-driven titles to attract mainstream audiences.
โThe hype cycles may be behind us, but what we are witnessing is a more grounded, sustainable foundation being built, one that could make the next wave of Web3 gaming bigger and more resilient than ever.โ
In March, Sky Mavis co-founder Jeffrey Zirlin shared a similar opinion, telling Cointelegraph that crypto gaming investors are no longer blindly throwing funds into โAxie killersโ that fail to deliver.ย
โAxie killersโ was once used to describe gaming projects that claimed to be the next big Web3 game.
Web3 gaming has become more matureย
In April, DappRadar said investor interest in Web3 gaming cooled amid a shift toward real-world assets and AI.
However, the market has now entered a more mature phase, Gherghelas said, with a focus on quality gameplay, sustainable economies and infrastructure designed to scale.ย
Related: Web3 games with one wallet still the vision for players โ The Sandboxย
โThe projects thriving today are laying the foundation for the next wave of growth, positioning Web3 gaming as one of the most resilient and forward-looking sectors in the blockchain space,โ she said.ย
โStudios funded today, if they build sustainable tokenomics and retain users, could be in the best position when macro conditions improve in 2026.โย
Blockchain gaming wallet users rise 2%
Blockchain gaming reached 4.9 million daily unique active wallets in July, up 2% from June, leading the decentralized app ecosystem.ย
Gherghelas said blockchain gaming was the only area to record increased activity last month as industry leaders continue to โhold their ground,โ with the top titles keeping players interested through major updates.ย
โJuly proved that Web3 gaming continues to build momentum. While other sectors cooled, gaming not only held its ground but grew its audience, reaching nearly five million monthly players,โ she added.ย
โGaming still dominates the industry, although the gap with AI applications is becoming increasingly narrow. The competition between these two sectors will be a key trend to watch moving forward.โย
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