GameFi Summer Approaching? A Review of Web3 Games That Secured Major Funding During the Bear Market and Their Progress
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GameFi Summer Approaching? A Review of Web3 Games That Secured Major Funding During the Bear Market and Their Progress
GameFi was the largest funding sector in the entire Web3 primary market during the last cycle.
Navigating Web3 tides with focused insightsAuthor: flowie, ChainCatcher
After a long period of silence, GameFi has recently entered a phase of concentrated price surges, sparking growing talk within the crypto community about a potential "GameFi Summer." Beyond continued hopes that GameFi will accelerate mass crypto adoption, users also believe that as 2024 approaches, GameFi—having been the top-funded sector in the entire Web3 primary market during the last cycle—must now deliver tangible results to investors.
According to data provided by Immutable on X, Web3 gaming accounted for 62% of total Web3 industry funding in 2022. DappRadar data shows that blockchain gaming attracted $739 million, $973 million, and $600 million in investment across the first three quarters of 2023. This indicates that despite the aftermath of the 2021 play-to-earn crash and the prolonged crypto winter, capital has consistently maintained heavy investments in Web3 gaming.
However, despite high expectations, many in the crypto community remain skeptical about this anticipated GameFi Summer. Coingecko analyzed web3 games over the past five years and found that approximately 2,127 out of 2,817 launched games (75.5%) have failed. In other words, three out of every four web3 games are inactive.
Beyond the extremely high failure rate—and even rug pulls—some crypto users argue that unlike DeFi, which revolutionized certain aspects of traditional finance, GameFi has yet to significantly disrupt traditional gaming. While numerous new concepts have emerged since the play-to-earn era, most appear to be more hype than substance.
GameFi, or Web3 gaming, has long been a favorite among early-stage investors. After nearly two years of dormancy, is the recent surge genuine momentum or just speculative heat? What has become of those projects that raised massive funds in the previous cycle?
Why Is Everyone Saying GameFi Summer Is Here?
Since mid-October, the GameFi sector has seen undercurrents of activity. On one hand, many new and established projects have become increasingly active, with token prices rising sharply. In mid-October, the AAA blockchain game BIGTIME surged nearly 20x within two days of listing on OKX, drawing significant attention back to GameFi.
Soon after, both new and legacy blockchain gaming projects began stepping up efforts. At the end of October, RPG flagship Illuvium announced plans for a public beta launch in Q1 2024, followed by news of its release on the Epic Games Store and a partnership with esports team Team Liquid. All ecosystem revenue will be fully distributed to ILV stakers. Its native token ILV rose from $49 to $109 within a month—an increase of over 123%.
Web3 gaming platform Immutable announced a partnership with gaming giant Ubisoft. Immutable’s native token surged from $0.60 to $1.12 within a week—a gain of over 80%. According to L2BEAT data, Immutable X's TVL also surpassed $200 million last week, marking a 40.71% weekly increase (currently down to $182 million). Meanwhile, the entry of traditional gaming giants like Unisoft brings enhanced gameplay possibilities to blockchain gaming.
Former blockchain gaming leader Gala Games announced a strategic partnership with DWF Labs in early November to accelerate adoption of its L1 chain. Its token GALA rose over 30% in the past month.
Recent major developments have also emerged from former P2E leaders Axie and STEPN. Ronin, the gaming sidechain developed by Sky Mavis (parent company of Axie Infinity), saw a large influx of new users following the migration of P2E MMO games Pixels and Zoids Wild Arena. Ronin data showed explosive growth, with active user addresses increasing sixfold at the beginning of November compared to the prior month. Axie also partnered with Grab, a ride-hailing app in the Philippines, offering additional benefits to local users. The AXS token rose 20% within a month.
STEPN’s development team announced its second game, Gas Hero, in November, launching community testing on November 27. Star Atlas, once a Solana-based star project, introduced a new gameplay model integrating cryptocurrency and NFTs to offer players a fresh experience. The ATLAS token achieved a monthly gain of 132%.
TreasureDAO, which created the viral game The Beacon at the end of last year, recently announced plans to develop its own gaming blockchain using MAGIC as the gas token.
With GameFi tokens experiencing concentrated gains, the total market cap of blockchain gaming rose over 10% in the past week, currently nearing $1.5 billion. From a primary market investment perspective, according to RootData, GameFi funding rebounded in October 2023, exceeding $100 million—up 61% from $67 million in September. By comparison, financing in July and August totaled less than $15 million each month. Notably, Animoca Brands secured $50 million from NEOM, a fund led by Saudi Arabia's crown prince, while Shrapnel, dubbed the “blockchain version of CS,” raised $20 million in Series A funding. In November, metaverse game MATR1X secured $10 million in an A2 round led by Folius Ventures, SevenX Ventures, and ABCDE Capital.
Beyond actual progress in the blockchain gaming space, another fundamental reason behind the heightened optimism for GameFi Summer is that so much capital was poured into GameFi startups during the previous cycle—many raising tens of millions of dollars—yet delivered little impact. As the broader crypto market transitions from bear to bull, investors expect stronger secondary market performance in Q1 and Q2 of 2024, when numerous games enter public testing, finally delivering some returns.
Post 'P2E': Blockchain Games Split Into Web2.5 and Fully On-Chain Games
Following the GameFi "crash" at the end of 2021 and the onset of a deep bear market, GameFi gradually faded into obscurity. There were no paradigm-shifting innovations akin to Axie or STEPN’s play-to-earn model, though minor innovations did emerge—such as NFT-based Free-to-Own models, 3A-style RPGs emphasizing gameplay, and Bet-to-Earn/Skill-to-Earn mechanics incorporating gambling and competitive elements.
For example, in August last year, blockchain game studio Limit Break raised $200 million in a round led by Paradigm and introduced the “Free-to-Own” model. Though widely questioned—with Binance CEO CZ mocking it on Twitter: “VCs just invented a new term: Free-to-own. If everything becomes free, why do we work so hard... It won’t stay free forever. Keep working!”—Limit Break’s NFT collection DigiDaigaku briefly topped OpenSea’s 24-hour trading volume charts, with floor prices peaking around 18 ETH.
After the brief spotlight on Limit Break and DigiDaigaku, TreasureDAO’s game The Beacon gained sudden popularity by the end of last year—one of the hottest blockchain games during this bear market. Within a week, over 10,000 players joined The Beacon, and more than 17,000 “Founder Avatars” priced at $40 sold out. Numerous YouTubers live-streamed gameplay. The game’s success stemmed largely from its engaging demo, particularly its daily-updated “Dungeon Challenge,” which gave players intrinsic enjoyment beyond mere token farming.
In October this year, the AAA blockchain game BigTime gained fame due to the explosive rise of its token BIGTIME, with pre-season invitation codes even appearing on secondhand platforms like Xianyu.
Overall, since the 2021 blockchain gaming crash, the industry has tried to move beyond the simple “Play-to-Earn” label by enhancing gameplay and transitioning toward “Play-and-Earn” to cultivate genuine gamers. In 2022, the narrative centered on AAA-grade blockchain games, giving rise to titles like BigTime, Delysium, and Abyss World. In 2023, the focus shifted toward fully on-chain games, with projects like Dark Forest, Loot, and Arena of Faith aiming to pioneer this new category. Many crypto VCs, including Paradigm, have publicly expressed strong support for fully on-chain games.
EMC_Labs researcher @0xNing0x noted in a summary of 2023’s Web3 gaming fundamentals that the industry now broadly divides Web3 games into Web2.5 and fully on-chain categories. ABCDE Capital similarly categorized current Web3 games into these two groups in their article “Why We Invested in Matr1x.”
@0xNing0x explained that Web2.5 games refer to “traditional” blockchain games where assets are tokenized but core logic remains off-chain, without community governance. ABCDE emphasizes that Web2.5 games prioritize Play & Earn, de-emphasizing Earning while boosting the Play aspect. Fully on-chain games, by contrast, place both game assets and core logic entirely on-chain and incorporate DAO governance. ABCDE describes this category as having a grander, more natively blockchain-aligned narrative, but still in its infancy—akin to DeFi in 2018—requiring several more years of iteration and development.
Nonetheless, despite new narratives and wealth-generating projects, skepticism remains about whether blockchain gaming can truly thrive in the next bull run. dForce founder @mindaoyang commented, “Fully on-chain games are still AW—besides rebranding, they haven’t delivered that ‘Uniswap moment’ for DeFi yet.” The sector continues to face three core tensions: conflict between gameplay quality and financialization; centralization of developer minting power versus decentralized tokenomics; and unequal power dynamics between developers and players, where skilled developers remain scarce despite a large player base.
Moreover, current blockchain game projects still lack paradigm-shifting innovation in gameplay or economic design, remaining trapped in boom-bust death spirals.
How Are the Well-Funded Web3 Games Progressing?
Despite relative quiet during this bear market, Web3 gaming has remained a key area for Web3 venture investment. ChainCatcher reviewed representative projects that secured major funding rounds (over $10 million) from notable investors since January 2022 and summarized their latest developments.
Animoca Brands
Animoca Brands stands out with over $600 million raised since 2022. Recently, Animoca Brands formed a strategic partnership with TON, making a strategic investment in the TON ecosystem and becoming the largest validator on the TON blockchain. TON Play, a gaming infrastructure project built on TON, provides the tools needed to launch new games on TON and enables seamless integration of Animoca’s portfolio of over 400 Web3 projects directly into Telegram.
Proof of Play
Proof of Play is a Web3 game studio that raised $33 million in September, led by Greenoaks Capital and a16z Crypto. It has launched its first game, Pirate Nation, where players collect and deploy pirates on adventures to gather materials, treasures, and gold. Pirates gain experience and level up through repeated expeditions.
Mythical Games
Mythical Games is a game tech studio focused on creating world-class products that drive consumer adoption of distributed ledger technology. In June, it raised $37 million in a Series C1 round led by Scytale Ventures, with participation from Animoca Brands, PROOF, MoonPay, and a16z Crypto. Mythical recently launched the blockchain-based video game NFL Rivals on iOS and Android and released another mobile title, Nitro Nation World Tour.
CCP Games
CCP Games, an Icelandic game developer founded in 1997 and known for the sci-fi MMO EVE Online, raised $40 million in March, led by a16z Crypto. The funding will support development of a new AAA blockchain game set in the Eve Online universe.
Gunzilla Games
Gunzilla Games is developing Off The Grid (OTG), a cyberpunk battle royale 2.0 game. In June last year, Gunzilla raised $46 million in a round led by Republic Capital, with participation from Griffin Gaming Partners, Animoca Brands, and Jump Crypto.
Wildcard
Wildcard is a Web3-based video game targeting gamers, fans, and collectors. In June last year, Wildcard secured $46 million in a round led by Paradigm. In April this year, Wildcard launched 4,444 Wildpass NFTs via Magic Eden’s Launchpad—the first digital asset in the Wildcard Universe, granting unique access rights.
Irreverent Labs
Irreverent Labs raised $40 million in a Series A round last May, backed by a16z Crypto, Solana Ventures, and Infinity Ventures Crypto. Led by Rahul Sood, veteran of esports and founder of Unikrn, the studio is launching MechaFightClub, a play-to-earn NFT cockfighting game.
Jadu
Jadu is a Web3 augmented reality platform building a world-class AR game where players use jetpacks and hoverboards to traverse real-world locations in search of rare in-game NFTs. Jadu raised $36 million in a Series A round last April, led by Bain Capital Crypto. In February, Jadu opened user registration and is now available for download on the App Store and Google Play.
Matr1x
Matr1x is a metaverse brand aiming to build its identity through original games, third-party collaborations, IP development, and global esports events. It plans to unfold a trilogy—cyber Earth, Mars colonization, interstellar exploration—via three major interconnected titles: Matr1x FIRE (FPS), Matr1x WAR (shooter + MMORPG), and Matr1x EVOLUTION (SOC). Recently, Matr1x secured $10 million in funding from Folius Ventures, SevenX, ABCDE, and others. In August, Matr1x FIRE launched its Alpha test and distributed tens of millions of FIRE tokens to participants.
Following the funding announcement, the floor price of Matr1x’s NFT collection MATR1X 2061 spiked to 2.65 ETH. Matr1x is now launching another platform-level NFT series, MATR1X KUKU, which grants holders revenue-sharing rights from the creator economy and premium platform privileges.
SHRAPNEL (SHRAP)
Shrapnel is a competitive multiplayer FPS game developed by a team of top-tier AAA and blockchain experts. Last year, it raised $7 million via token sale, backed by Dragonfly and Three Arrows Capital. Recently, its development studio Neon Machine secured another $20 million in funding. Shrapnel plans to launch initially for paying users in December and go fully free-to-play in 2024.
On November 8, the token listed on Bitget at $0.03 and later surged to $0.19—an increase of over 533%. However, amid larger fundraising, internal conflicts have emerged: Neon Machine has reportedly threatened legal action against several investors attempting to seize company control and treasury access.
Pahdo Labs
Pahdo Labs is developing Halcyon Zero, an isometric action RPG set in a dreamlike anime-inspired world. The studio aims to foster a player-built virtual world. The upcoming game will allow players to create their own anime-style worlds using AI- or procedurally-enhanced tools, pushing creative and social features to the forefront of anime RPGs. In September, Pahdo Labs raised $15 million in a Series A round led by a16z Crypto.
Mahjong Meta
Mahjong Meta is a Web3 mahjong competition community founded by former Tencent and NetEase employees. In August, it raised $12 million in a round co-led by Dragonfly and Folius Ventures. Users can currently access the game via the official website and participate in Mahjong Master tournaments.
Illuvium (ILV)
Illuvium is an open-world RPG adventure game built on Ethereum, allowing players to collect, trade, and battle NFT assets. In May, Illuvium announced a $10 million investment from Framework Ventures.
Recently, Illuvium announced a public beta launch planned for Q1 2024, along with a listing on the Epic Games Store and a partnership with esports team Team Liquid. All ecosystem revenue will be fully distributed to ILV stakers.
Azra Games
Azra Games is a blockchain gaming company focused on mainstream collectible combat RPGs. In February, Azra raised $10 million in seed funding led by a16z, with participation from NFX, Coinbase Ventures, Play Ventures, and Franklin Templeton. Azra plans to release the first installment of its game Legions & Legends later this year.
Angelic / Metaverse Game Studios
Metaverse Game Studios is a blockchain game developer whose title Angelic is a dark sci-fi narrative strategy RPG. In March last year, Angelic/Metaverse Game Studios raised $10 million in a round co-led by Animoca Brands and Solana Ventures.
Beyond the above-listed Web3 gaming projects that secured major funding in the past one to two years, previously mentioned projects such as Star Atlas, Ronin Network, Treasure DAO, and STEPN’s new game Gas Hero also warrant close attention.
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