The cryptocurrency gaming sector, encompassing video games that utilize blockchain tokens or NFTs, garnered a significant $297 million in investments in July, as per a collaborative report by DappRadar and the Blockchain Game Alliance. A majority, 63%, of this funding in July was allocated towards infrastructure, hinting at the nascent stage of the industry. Investors are keen on supporting tools and platforms that will enable future blockchain and NFT-based games.

In contrast, June witnessed a modest $68 million in crypto gaming investments. This decline in June might be attributed to the broader crypto market's instability, especially with the U.S. SEC focusing on Binance and Coinbase, leading to industry apprehensions. However, Carlos Pereira from Bitkraft Ventures expressed that drawing conclusions from the disparity between June and July might be premature. He emphasized that such deals, especially those worth over $30 million, take time and could have transpired in either month.

Highlighting the volatility, the sector had previously secured over $400 million in investments for three consecutive months from March to May 2023. Alok Vasudev, co-founder of VC firm Standard Crypto, mentioned the challenges in deriving insights from monthly data, especially in the gaming domain where development is time-consuming. He remains optimistic about the potential of crypto in gaming and anticipates a continued rise in investments.

July was marked by significant investments, including Animoca Brands' $30 million investment in the crypto "super app" Hi and Inworld AI's fundraising of over $50 million for enhanced in-game characters. Valhalla Ventures initiated a $66 million VC fund for gaming and tech, while Futureverse secured $54 million for its crypto metaverse aspirations.

However, the enthusiasm for metaverse-centric companies contrasts with the declining NFT prices and trading volumes for existing metaverse games. In July, virtual world games recorded a yearly low of $5.6 million in monthly traded volume, averaging $523 per NFT. This is a stark contrast to 2021's peak when a virtual land adjacent to Snoop Dogg in The Sandbox was sold for $450,000.

Yuga Labs continued to lead the metaverse NFT market in July, with Otherdeed and Otherdeed Expanded NFT sales constituting 72.5% of the traded volume in the virtual world segment. The Bored Ape Yacht Club creator's Otherside metaverse game, which plans to utilize these NFT land plots, is still under development.