The first few months of 2025 were fascinating in blockchain games. According to DappRadar’s State of Blockchain Gaming report, which came out on April 10, deal action in the sector sped up, but overall investment fell sharply. This paradox shows how investors are changing their habits—investing less money but making more deals—with a new focus on long-term robustness and scalable infrastructure.
Funding Falls 71% Despite Rising Deal Volume.
Web3 games projects only received $91 million in Q1 2025, which is 71% less than in Q4 2024 and 68% less than the same time last year. Sara Gherghelas, a researcher at DappRadar, said this drop shows that early-stage startups are facing more financial problems as investors shift their attention to AI and real-world asset projects.
Increasing Deals: Selective Optimism
Total capital dropped, but deals rose by 35% from one quarter to the next. This suggests that investors aren’t leaving the space; they share their smaller bets across a broader range of startups. Gherghelas said that this trend shows that venture capitalists are still interested but are being more careful with their money and focussing on due research and diversification.
Infrastructure Shines in 2025
Most of the money that did come into Web3 games in the first quarter went to projects that improved infrastructure. DappRadar said that investors want gaming systems that can be scaled up and will still work in the future. As part of a $20 million joint fund, South Korea’s MARBLEX, the blockchain branch of Netmarble, got money to support its Semi-Publishing Model.
Focus on Innovation and Interoperability
The direction of the business seems clear: quality and durability over quantity. The Web3 gaming industry is changing with “AI-powered gameplay mechanics” and “interoperable identity systems.” Gherghelas said that this change shows that teams are becoming more mature because they are now focussing on building stronger communities and better user experiences instead of short-term hype.
Conclusion
Capital investment dropped noticeably in Q1, but the rise in deal volume and infrastructure development shows that Web3 gaming is not going away soon. Instead, it’s moving into a more “strategic and sustainable phase,” where smart money goes to projects that will have a long-term effect.
