In July, a total of $297 million was invested into the emerging cryptocurrency video game sector, yet sales of metaverse NFTs have notably decelerated.
The crypto gaming industry, encompassing video games utilizing blockchain-based tokens or NFTs, received an impressive injection of investment funds totaling $297 million in the recent month, as detailed in a comprehensive report co-authored by DappRadar and the Blockchain Game Alliance.
Notably, a substantial 63% of this July funding was allocated towards fortifying the industry’s infrastructure, underscoring its nascent stage of development. Investors are strategically backing the creation of tools and platforms that will serve as the bedrock for forthcoming crypto and NFT-driven games.
In stark contrast to the previous month’s modest $68 million in crypto gaming investments, July witnessed an explosion of growth in the sector. This surge is a testament to the industry’s resilience and forward momentum.
While some attribute June’s dip in investments to the regulatory scrutiny faced by major players like Binance and Coinbase from the U.S. Securities and Exchange Commission (SEC), industry experts, such as Carlos Pereira from Bitkraft Ventures, consider it a statistical variation with no underlying significance. Pereira emphasized that the concentrated dataset of investments behaves with expected fluctuations, given the sample size. He noted that the larger deals take considerable time to finalize and could have occurred in either month.
Further bolstering the notion of June’s downturn as an anomaly is the fact that the industry garnered over $400 million in investment for three consecutive months: March through May of 2023.
Alok Vasudev, co-founder of VC firm Standard Crypto, highlighted the challenges of drawing precise conclusions from month-to-month analyses. He pointed out the extended development timelines of games, making the timing of financing announcements less indicative of real-time trends. However, he expressed confidence in the robust potential of gaming as a prime use case for crypto, anticipating a sustained increase in investments.
July witnessed a series of remarkable investments, including Animoca Brands’ $30 million injection into the crypto “super app” Hi, and Inworld AI’s impressive raise of over $50 million for enhancing in-game AI dynamics.
The establishment of a $66 million venture capital fund by Valhalla Ventures for gaming and technology and a $54 million raise by Futureverse for their crypto metaverse plans further underscore the industry’s growth trajectory.
Despite ongoing fundraising by metaverse-focused firms, it’s noteworthy that NFT prices and trading volumes for existing metaverse games faced a decline in July. Monthly traded volume hit a year-low of $5.6 million across 10,796 sales, accompanied by an average NFT sale price of $523, a stark contrast to the exuberance of the 2021 metaverse hype.
In July, Yuga Labs continued its dominance in the metaverse NFT economy, with Otherdeed and Otherdeed Expanded NFT sales contributing significantly to the virtual world category’s trading volume. The eagerly anticipated Otherside metaverse game by the Bored Ape Yacht Club creator, designed to leverage these NFT land plots, remains in the developmental stages.