DappRadar: Blockchain Gaming Sees More Deals but Less Capital in Q1 2025

The blockchain gaming sector experienced a mixed performance in the first quarter of 2025, with a notable rise in deal volume but a sharp decline in total funding.

Web3 gaming projects raised $91 million in Q1 2025, marking a 71% drop from the previous quarter and a 68% decline year-over-year, according to DappRadar’s latest State of Blockchain Gaming report.

DappRadar analyst Sara Gherghelas noted that the significant downturn highlights growing challenges for early-stage startups, especially in the current macroeconomic environment.

“Unless broader market conditions improve, 2025 may prove more difficult than previous years,” she wrote.

Blockchain Gaming Deals Rise 35% in Q1 Despite Drop in Funding

Despite the capital slowdown, investor activity remained steady, with a 35% quarter-over-quarter increase in the number of closed deals.

Gherghelas explained that this trend indicates a shift in investor strategy — smaller investments spread across a wider range of projects.

“Investors are still interested, but they’re deploying funds more cautiously,” she said.

Most of the Q1 funding went to infrastructure-related blockchain gaming projects.

According to the report, investors are showing a preference for scalable, foundational technologies that can support the long-term growth of the Web3 gaming ecosystem.

Gherghelas added that this shift underscores sustained confidence in the sector’s future, even amid funding headwinds.

Gaming saw 5.8M daily wallets in Q1, down just 6% – holding stronger than most sectors.

opBNB led as the most used chain, with @Aptos driving growth via @getstanapp and @SkaleNetwork supported by titles like @thepixudi and @motodex_game.@SeiNetwork also entered the top ranks… pic.twitter.com/3ah8ii8lPY

— DappRadar (@DappRadar) April 10, 2025

Among the standout projects were South Korea’s MARBLEX and Dubai-based The Game Company.

MARBLEX, the blockchain division of Netmarble, is developing a Semi-Publishing Model to support a wider range of Web3 titles, backed by a $20 million joint fund with Immutable.

Meanwhile, The Game Company secured $10 million in February to build a cloud gaming platform that allows users to play any game on any device using blockchain tech.

Web3 Gaming Faces Industry Headwinds

Last month, members of the Arbitrum decentralized autonomous organization (DAO) voted to revoke funds previously allocated to its gaming ecosystem initiative, citing insufficient progress and transparency from the program’s administrators.

The debate unfolds amid broader headwinds in the Web3 gaming sector.

ZKsync recently discontinued its liquidity rewards initiative, citing poor market conditions.

ZKsync Ignite Program Update 📣

After careful consideration, the DeFi Steering Committee (DSC) has decided to not renew Ignite for Season 2 and will be sunsetting the program starting March 17th, 2025 by turning off rewards for period 6

Here's why:

— ZKsync Ignite (@ZKsyncIgnite) March 13, 2025

In contrast, blockchain gaming saw a dramatic rise in onchain activity in January, marking a threefold increase compared to the same period last year.

The sector recorded over 7 million unique active wallets (UAW) daily, reflecting a 386% year-over-year surge.

Several blockchain gaming networks saw significant expansion in January. OpBNB emerged as the top-performing gaming blockchain, with Matchain ranking second.

Meanwhile, Polygon experienced a 100% increase in gaming activity compared to the previous month.

Telegram has also emerged as a significant platform for Web3 gaming, capturing 21% of new game launches in 2024.

Developers and publishers are leveraging the messaging app to boost user acquisition and engagement, Game7, a community dedicated to advancing blockchain technology in gaming, said in its 2024 State of Web3 Gaming Report.