DappRadar analysts say the decline in funding is due to different dynamics in the 2023 market.
Web3 gaming projects raised $600 million in Q3 2023, down 50% from Q3 2022, according to data provided by DappRadar. Although the number of deals in the third quarter was not specified, analysts say web3 games raised $2.3 billion since the beginning of 2023.
However, as DappRadar noted, venture capitalists (VCs) like Andreessen Horowitz (a16z) were not interested in gaming projects just because the significant allocation (nearly 44% of all funding) this time was going to companies. investment.
<img decoding="async" width="1002" height="560" src="https://crypto.news/app/uploads/2023/10/ioishdofhsjd.png” alt=”Web3 games raised $600 million in Q3, down 50% from 2022 – 1″/>
Despite this shift in investor sentiment, DappRadar says the investors’ strategy “underscores the confidence and commitment that venture capitalists have for the future of this domain.”
This shift also coincides with other sectors, such as decentralized social applications gaining traction, which may pose challenges for web3 gaming startups struggling to find a silver bullet to gain more users and develop business models, according to the analysts.
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At the chain level, activity around game projects has been falling steadily over the last four quarters, as in the third quarter of 2023, game projects generated only 35% of all activity in various blockchain networks.
Although this figure is considerably higher than what non-fungible tokens (NFTs) or social apps could generate, it is a far cry from Q4 2022, when gaming projects witnessed a 50% dominance in unique active wallets.
