Crypto Gaming Sees Mixed Q1: Deals Surge as Investment Totals Fall — DappRadar

Crypto Gaming Has Mixed Q1 as Deals Climb but Investment Totals Slide, DappRadar Reports

The blockchain gaming sector delivered a mixed performance in the first quarter of 2025, with a sharp drop in investment totals but a notable uptick in the number of deals, according to a new report from blockchain analytics firm DappRadar.

In its April 10 State of Blockchain Gaming report, DappRadar revealed that Web3 gaming startups raised $91 million in Q1 — a staggering 71% decline from the previous quarter and a 68% decrease compared to the same period in 2024.

DappRadar analyst Sara Gherghelas noted the decline reflects mounting challenges for early-stage gaming startups, suggesting that 2025 could prove more difficult than previous years unless overall market conditions improve.

“The figures show the growing pressure on early-stage startups and hint that 2025 may prove more challenging than previous years — unless broader market conditions improve,” Gherghelas wrote.

Web3 gaming projects raised $91 million for the quarter, marking a 71% decrease from Q4 2024. Source: DappRadar

Smaller Checks, More Deals

Despite the funding slump, the number of blockchain gaming-related deals rose by 35% quarter-over-quarter, signaling that investor interest in the space remains strong, though more cautious.

“While investors are writing smaller checks, they're still actively engaging with a broader range of projects,” Gherghelas explained. “This indicates continued interest, albeit with more cautious allocation.”

The report points to a shift in investor preferences — away from experimental game projects and toward foundational infrastructure, interoperability, and scalability in the Web3 gaming ecosystem.

Infrastructure Projects Dominate Funding

The majority of Q1’s funding went to infrastructure-focused projects, highlighting a maturing market that prioritizes long-term growth and technological reliability. Investors are now placing more emphasis on scalable platforms that can support next-gen Web3 gaming experiences.

One major recipient was MARBLEX, the blockchain gaming division of South Korean gaming giant Netmarble, which is rolling out a Semi-Publishing Model to help onboard a wider variety of Web3 games. Backed by a joint fund exceeding $20 million with Immutable, MARBLEX is aiming to support scalable and interoperable gaming projects.

Most of the funding for Web3 gaming last quarter went to infrastructure-focused projects. Source: DappRadar

Another key player in Q1 was The Game Company, a Dubai-based startup focused on blockchain-based cloud gaming. The firm secured $10 million in funding on February 6 to develop a platform enabling players to access games on any device via the cloud.

Shifting Investor Focus

Gherghelas noted that part of the decline in direct game development funding stems from investors reallocating capital toward real-world assets and artificial intelligence (AI) — both hot sectors in early 2025.

Still, the push toward innovation, upgraded gameplay, and interoperability remains a strong trend in Web3 gaming.

“As the Web3 gaming industry matures, there is a clear push toward quality, innovation, and interoperability — whether through upgraded gameplay, new identity layers, or AI-enhanced mechanics,” Gherghelas concluded.

While total capital may have shrunk this quarter, the deal flow and focus on core infrastructure signal that investor faith in the long-term promise of blockchain gaming is far from fading.