The Web3 gaming sector is experiencing tightened investment conditions, with investors being more discerning and prioritizing projects that show sustainability over mere hype. In February, Gunzilla Games Web3 director Theodore Agranat compared blockchain gaming to a game of "musical chairs," where capital moves between projects without fresh investment, and users seek value elsewhere once extracted.

Despite layoffs in notable Web3 projects like Illuvium, individuals such as Sky Mavis’ Jeffrey Zirlin affirm that capital still exists, albeit geared toward projects with strong foundations. He provided Fableborne as an example of successful funding amidst industry constraints, indicating that discerning investment is now the norm.

Josh Gier from Coliseum noted the end of easy capital for projects that only "slap NFTs" into games. Instead, investors are drawn to projects that meaningfully integrate Web3 elements, enhancing gameplay and user experience rather than focusing solely on financial incentives.

Vineet Budki from Sigma Capital reaffirmed this notion, emphasizing the importance of strong game-building and knowledge of the distribution process to attract capital. The cessation of easy capital acquisition highlights a shift towards long-term, sustainable investments in the Web3 gaming arena.