web3 game sector managed to attract the attention of investors in 2022. Equity-backed investments raised $4.49 billion as a result of this interest. But despite strong capital inflows, the industry still struggles to attract and retain users.
According to a report by Metaverse Post; 348 startups focused on NFT, metaverse, gaming, AI, VR and AR raised a total of $7.1 billion in 2022. Venture financing in the Web3 space has increased by $4.8 billion since 2021, increasing 48% in a year.
Much of this funding has been saved in Web3 game projects. Currently, Web3 games account for 62% of Web3 venture capital funds.
In 2022 alone, venture capital investments in gaming startups totaled nearly $4.49 billion. As a matter of fact, the number of users in the sector did not increase proportionally to this number. Last year, the gaming industry was a favorite area of venture capital funds. By comparison, metaverse projects ranked second with $1.8 billion in funding.
Although the incoming investments showed the confidence of venture capitalists in the sector, most of the funds came from four venture funds. Paradigm ($2.5 billion), a16z ($2.2 billion), HiveMind ($1.5 billion) and Binance Labs ($1 billion) invested.
Still, gamers generally didn’t share that confidence, as the available data shows that user adoption has been slow. Moreover, most gamers are either unfamiliar with Web3 or do not support the industry.
Web3 Gaming Industry Has Difficulty Growing
A June 2022 survey by gaming company Coda Labs revealed that Web3 games are still far from mass adoption. 7,000 players from major markets such as the US, UK and Japan participated in the survey.
According to the survey, only 3% of players NFThas ‘s. These digital assets were considered a technology that would transform the ownership of in-game assets. However, the result was not as expected.
Gamers generally don’t know much about Web3. Specifically, 52% of gamers don’t know any Web3 game terms. What’s more, only 12% of gamers said they played a Web3 game. Those who tried, on the other hand, underlined that they stepped into this sector just to try.
Players generally do not have positive feelings about Web3 either. The survey revealed that players do not like crypto or NFTs in general. Players rated their feelings about crypto and NFTs as 4.5 and 4.3 on a scale of 0 to 10, respectively.
Moreover, some gamers believe that NFTs only serve the game studios that released them. In January 2022, The New York Times reported on the backlash that some game studios have faced when trying to integrate NFTs into existing games. GSC Game World, the studio behind the popular STALKER video game, had planned to release their NFT in early 2022. However, the reaction of the players immediately canceled these plans.