Web3 Gaming Funding Surges in July, But Concentrated in One Project
Web3 gaming funding saw a significant surge in July, with a total of $60 million raised by projects in the sector, according to a report by DappRadar. This marked a 94% increase from the previous month, indicating a growing interest in web3 gaming.
Investment Concentration in Distinct Possibility Studios
However, over half of the funding in July was concentrated in a single project. Distinct Possibility Studios secured $30.5 million for its first web3 title, Reaper Actual, an open-world MMOFPS on the Tezos blockchain. The funding round was led by Bitkraft Ventures and Brevan Howard Digital, the crypto division of Brevan Howard, a European hedge fund managing significant assets.
Web3 gaming investments, January-July 2025. Source: DappRadar
Overall Market Trends
Excluding the large investment in Distinct Possibility Studios, the total web3 gaming investments in July would have remained similar to June’s level of $31 million. However, compared to the same month in 2024, the market has seen a 30% increase in funding. Despite this growth, the total investment in web3 gaming remains below the peak seen in 2021 when VCs invested $4 billion in blockchain games.
Quality Over Quantity
DappRadar analyst Sara Gherghelas noted that the market is now favoring quality over quantity, suggesting that there may be fewer game titles released in the short term. Studios that focus on building sustainable tokenomics and retaining users could be well-positioned for success when macro conditions improve in 2026.
Arbitrum Gaming Venture Support
In May, Arbitrum Gaming Venture announced investments and grants totaling around $10 million to support game developers on the Arbitrum network. This initiative aims to further promote innovation and growth in the web3 gaming sector.