new Delhi : Web3 gaming companies in India saw strong investor interest this calendar year even as cryptocurrencies fell to all-time lows. Such companies create blockchain-powered games with a play-to-earn (P2E) model, where players are rewarded with crypto tokens for participating or winning. In-game items in such games are also often sold and traded in the form of non-fungible tokens (NFTs).
For instance, homegrown Polygon, which has gained notoriety in the global crypto and NFT industry, led funding with a $450 million Series D round from Sequoia Capital India in February. Besides, Gurugram-based cricket NFT gaming startup Rerio raised $120 million in Series A round in April and Bengaluru-based Listo.io raised $12 million in August.
According to data from venture investment research firm Trackxn, Web3 gaming firms in India are set to raise $620.5 million in 2022 through 32 deals, almost six times more than the $115.3 million raised in 39 deals last year. This comes despite a funding winter plaguing startups around the world.
Industry experts attribute the boom to the growing user interest in P2E games and the fact that an increasing number of Web3 projects are being launched in India. Blockchain commerce firm GuardianLink and gaming firm JetSynthesys are two such examples. The former launched a P2E cricket game for mobile phones and personal computers in March, while the latter acquired Web3 product studio Metafy Labs in September as part of plans to invest $50 million over the next three years in Metaverse projects. was as a part.
Furthermore, the crypto market crash has prompted venture capital (VC) firms to redirect some funds from crypto startups to Web3 gaming firms, he said.
“P2E gaming and metaverse are emerging as key segments of the Web3 landscape. Currently more than half of the traffic in the space is from gaming platforms. Trackxn co-founder and CEO Neha Singh said, “NFT trading volume matters P2E gaming is doing well in the U.S. as well.” for a change in investor interest as well.
Priya Ratnam, CEO of Avisa Games Guild (AGG), a blockchain gaming community, agreed, adding that major VCs are actively investing despite the current market trend.
Gaming accounts for a major portion of Web 3 activity. According to a November report by gaming investor Lumikai, 30% of the 450 Indian Web3 firms are from gaming. IT industry body Nasscom identified gaming and metaverse as one of the top four use cases for Web3 applications in the Nasscom Web3 Startup Landscape report published in October.
That said, AGG’s Ratnam said that Web3 games are still in their infancy.
He added that many Web2 gaming firms are switching to the Web3 model to make games more interesting and engaging.
The interest isn’t just coming from traditional game development firms. In March, game streaming startup Loco raised $42 million from South Korean crypto venture firm Hashed, with plans to fund and develop its own Web3 integration.
However, despite it being a good year overall for Web3 gaming firms, experts also warned that the recent crash of the FTX exchange could hit the industry hard. “The downturn has been felt more acutely since FTX, so there is some inertia in investment appetite that will become more apparent in the coming months. Despite this, many funds were committed to the Web3 space before the downturn and still are. Investing, probably out of necessity,” said Justin Shriram Keeling, Founding General Partner at Lumikai.
The collapse of one of the world’s largest exchanges in early November has had ripple effects across the industry. For example, AXS, the Ethereum-based token used by the popular global web 3 game Axi Infinity, fell from $12 in October to $6.5 in December. According to blockchain analytics firm DappRadar, gaming activity on the Solana blockchain also dropped by 89.42% in November due to the platform’s proximity to FTX.
However, data from DappRadar also shows that gaming still accounts for nearly half of all blockchain activity tracked across 50 networks worldwide between October and November.
“Blockchain is now being widely used with Web3. People are starting to see its true potential. The underlying technology is extremely useful with a lot of use cases like gaming. Cryptos have gotten a lot of attention. Founder of Sienna Capital Management and Slowly the world is waking up to the fact that a lot of peer-to-peer things can be done on it, said Siddhartha Pai, managing partner.
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