Web3 gaming investment dropped in April by 69% as VCs recalibrate

In April 2025, the blockchain gaming sector faced a noticeable drop in venture capital funding. According to DappRadar, that month’s fundraising efforts yielded just $21 million, as VCs cautiously shifted focus toward more promising opportunities.

This figure marked the second-lowest raised since October 2024. In stark contrast, October through December witnessed fundraises of $89 million, $222 million, and $225 million, respectively.

January saw a dramatic plunge to $16 million, setting the seven-month low. February bounced back with $55 million, and March climbed further to $69 million. Yet, April’s numbers revealed a steep 69% fall from March’s gains.

Drop in amount but increase in focus

According to DappRadar, despite a decline in funds raised for blockchain games, venture capitalists have adopted a more strategic approach to funding. The report highlights that these firms are now prioritizing investments in projects centered on infrastructure, ecosystem tools, and experienced teams, avoiding frivolous expenditures.

As an example, the report mentions Arbitrum’s $200 million ARB Gaming fund, now rebranded as Arbitrum Gaming Ventures. This venture made its first investment of $10 million in May, targeting prominent players in the field.

Investments include Wildcard, a card battle game transitioning from Steam to Arbitrum; Proof of Play, the developers behind Pirate Nation; XAI Network, a blockchain focused on gaming built on Arbitrum; Hyve Labs, a company developing multi-platform game distribution; and T-Rex, a new app-chain for games.

DappRadar noted that two-thirds of all Web3 gaming investments in 2025 have been directed towards infrastructure projects. The report states, “Between that, the continued entry of traditional gaming companies, and major ecosystem commitments, it’s clear that the long-term belief in Web3 gaming hasn’t diminished, but instead it matured.”

Investors are now more interested in “sustainable models, player engagement, and actual retention” rather than token-driven hype. Additionally, weaker projects are vanishing due to the scarcity of accessible capital, compelling teams to engage in better planning, deeper focus, and user-oriented development.

Beyond April 

From May onwards, a wave of new launches and updates is anticipated. According to DappRadar, MapleStory N by Nexon is set to launch on May 15 on Avalanche’s Henesys subnet. With over a million wallets and well over 31 million transactions processed, it promises to invigorate the gaming ecosystem.

Treeverse, Gigaverse, and Illuvium are also expected to introduce new features and launch in May. Not to be left behind, Yuga Labs has new updates on the horizon as well.

The report suggests that new games like Realms of Alurya, The Lost Glitches, and Engines of Fury, which have already attracted significant attention, might debut this month.

Overall, the gaming sector has flourished through seasons of IDOs and weathered challenging bear markets, such as in 2023, when 70% of Web3 games failed. Venture capitalists are adapting their investment strategies, focusing on genuine builders rather than following the buzz.