Aug 11, 2023

Crypto Gaming Industry Witnesses $297 Million Investment Boost in July Amid Slowing Metaverse NFT Sales

The crypto video game industry experienced a remarkable injection of $297 million in investment during July, a significant leap from the comparatively modest $68 million invested in June. This data emerged from a collaborative report by DappRadar and the Blockchain Game Alliance, shedding light on the burgeoning landscape of blockchain-based gaming that integrates tokens or NFTs.

An intriguing aspect of this funding surge is that around 63% of the July investments were directed towards infrastructure development. This allocation points towards the industry's nascent stage of evolution, as investors focus on building tools and platforms that will facilitate forthcoming crypto and NFT-driven games.

While the data indicates an explosive growth compared to the previous month, the report speculates that June's relatively subdued investment might have been influenced by the wider crypto sector's uncertainty. Notably, the U.S. Securities and Exchange Commission's scrutiny of Binance and Coinbase in June created industry instability.

Carlos Pereira, a Partner at Bitkraft Ventures, suggests that these fluctuations might not necessarily reflect concrete trends. He explains that the concentrated and comparatively small dataset of gaming investments can lead to higher variance, and significant deals may have materialized in any given month.

The volatility of monthly analyses aside, the gaming sector had witnessed substantial investments in the range of $400 million for each of the preceding three months: March through May 2023. Alok Vasudev, co-founder of VC firm Standard Crypto, emphasizes that interpreting month-to-month patterns can be challenging, especially since many financing rounds aren't publicly disclosed.

Despite the investment boost, July saw a decline in the NFT prices and overall trading volume of existing metaverse games. Notable investments included Animoca Brands allocating $30 million to the crypto "super app" Hi, Inworld AI raising over $50 million for AI-driven in-game characters, Valhalla Ventures establishing a $66 million fund for gaming and technology, and Futureverse securing $54 million for its crypto metaverse initiatives.

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