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- 1 Where 2022 saw $26.6 Billion funneled through investors, 2023 managed to draw in around $7 Billion.
- 2 Over 2,000 games in this sector have failed during the course of six years.
Once a flourishing space is going empty after investors started packing their bags and moving away in search for a better opportunity. Artificial intelligence (AI) is making waves globally, which might be the next destination for them. As the space is becoming increasingly unpopular, Web3 startups started to tumble down at a stroke.
The number of Web3 startups launched in the blockchain and cryptocurrency fever fell by 75 percent year on year. Where 2022 saw $26.6 Billion funneled through investors, 2023 managed to draw in around $7 Billion according to business information provider CrunchBase. The number reached $33 Billion during 2021 which many see as the finest year for crypto.
It wasn’t just for cryptocurrencies but all the sectors associated with it, including non-fungible tokens (NFTs), metaverse, play-to-earn (P2E) and more. A majority of cryptocurrencies saw their all time high as the market capitalization reached $3 Trillion. Although this has given bad actors a push for many crypto projects have touted themselves just to disappear with investors’ money.
Q4, 2023 was the worst as in this period, Web3 managed to rake in just $1.1 Billion, 21 percent lower than the previous quarter and 65 percent less year on year. Only Blockchain(dot)com, a crypto company, managed to raise nine figures in funding, drawing $110 Million in a Series E round led by Kingsway Capital, an investment management firm.
Gaming emerged as the core part of Web3 (investment-wise). However, even games in the sector have failed to sustain. A report by data aggregator CoinGecko indicates that over 2,000 games in this sector have failed during the course of six years. Thus, the failure rate for games reached 107 percent in 2023.
Blockchain integration in traditional gaming has been opposed by traditional gamers. This is among the reasons Web3 games have failed to thrive as they would eventually require support from mainstream gamers. But few companies like Animoca Brands have established their roots in the sector, thanks to their initial foray to Web2.
They are also creating a metaverse of their own dubbed Mocaverse. According to the CrunchBase data, it is one of the recent unicorns alongside Circle, Wormhole, Blockchain(dot)com, and more. Significant funding has come from the United States through the years, but that was not the case in 2023.
Nevertheless, there’s hope for the sector as companies looking into the metaverse may boost web3 eventually given that crypto and blockchain are primary elements for the metaverse. However, it would be difficult for companies in this segment to grow in a broader gaming market.
Gaming industry has got top guns like Microsoft who recently acquired Activision Blizzard for $70 Billion. Several of the users started to speculate that the company is going to shed its monopoly in the gaming market after the acquisition is finalized.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
