A number of major blockchain venture companies have jointly led a new Web 3 gaming investment fund, also known as “GameFi.” This potentially opens the door to a highly lucrative industry where cryptocurrency and blockchain are merging with the traditional gaming sector.
$100 Million GameFi Ecosystem Fund
For example, the above names have jointly established a GameFi ecosystem fund worth $100 (€86.67) million. The fund will be used to invest in game studios, technology companies and other projects ‘at the intersection of blockchain and gaming’.
According to a representative from Lightspeed Ventures Partners, the gaming industry could present a huge opportunity to “bring the next billion users to Web 3.” This is currently seen as a broad concept that refers to a more decentralized internet.
Lightspeed has reportedly invested more than $300 million in late-stage gaming and cryptocurrency companies, including Epic Games, Wintermute, FTX and Offchain Labs. These are companies that are much further along in the development phase than, for example, start-ups, which in turn can reduce risk.
Gaming market will grow enormously in the coming years
Although estimates vary widely, the global gaming market is said to generate over $100 billion in annual revenue. This amount is expected to rise to at least $200 billion in the next 2 years. This is evident from new data coming from the gaming data provider Newzoo. Blockchain technology and cryptocurrency are increasingly merging with the gaming landscape, creating new user experiences and forms of revenue. This has led to GameFi, a broad term that describes the financialization of gaming through DeFi and non-replaceable tokens (NFTs).
GameFi is also gaining popularity as a concept within the so-called ‘metaverse’. This metaverse describes a futuristic version of the internet, which includes virtual reality, social media and other companies. Several investment funds have already allocated capital to this emerging industry. These include Sanctor Capital, which recently raised $20 million, and Huobi Group, which launched a $10 million fund. It is not yet known exactly where the gaming funds will make their next investments.