Web3 gaming has come a long way from the speculative hype of early Play-to-Earn models to a more mature ecosystem driven by strong infrastructure, improved user experience, and sustainable economies.
While securing valuable investments for blockchain gaming is still challenging, institutional investors are showing renewed interest, and advancements in AI, blockchain scalability, and zero-knowledge proofs are reshaping the space.
Invezz spoke to Kin Wai Lau, CEO of ZKcandy and chairman of iCandy about ZKCandy’s latest funding and the funding landscape in blockchain gaming, what is driving activity in Web3 gaming and the factors behind its rapid growth in Southeast Asian countries, as well as how AI is expected to play a role going forward.
Lau also shares his views on how a less hostile regulatory atmosphere under the Trump administration can help developers foster innovation and how Play-and-Own will be the next big trend after P2E.
Excerpts:
Challenges in securing investment for blockchain gaming
Invezz: ZKcandy recently closed a $4m funding round. What are the biggest challenges in securing investment for blockchain gaming and infrastructure projects? Are you seeing renewed interest from institutional investors in crypto gaming projects?
Despite the rising interest in the Web3 gaming sector, securing valuable investments is still challenging.
One of the main reasons is that investors view the blockchain gaming industry as speculative.
Token price volatility and regulatory uncertainty add to the caution around Web3 gaming platforms.
Unlike traditional gaming, where revenue streams are clear — game sales, in-app purchases, subscriptions — blockchain gaming relies on token economies, also called tokenomics, which can collapse if not well-designed.
However, we’ve been seeing growing interest from institutional investors as they have shifted their focus from hype-driven projects to gaming platforms with real users, strong tokenomics, and solid infrastructure.
For example, ZKcandy secured $4 million in seed funding, backed by top-tier VC firms like Animoca Brands and The Spartan Group.
Pixion, a mobile-first blockchain game developer, kicked off the year with $4.9 million in funding.
The Web3 life simulation game BeraTone received $2 million in its seed round and was also backed by Animoca Brands, according to a report by DappRadar.
In total, January 2025 started with $16 million in blockchain gaming investments.
As the industry moves forward, the focus has been shifting to the infrastructure of Web3 gaming — companies and developers focus on layer-2 solutions, gaming rollups, and specific Web3-native gaming ecosystems.
Improved graphics and better network scalability driving growth in Web3 games
Invezz: Blockchain gaming saw a threefold increase in activity in January 2025 compared to the same time last year. What do you think are the key drivers behind this growth?
A lot has changed over the past few years. For example, in 2021, companies aimed to grow their users with the sole purpose of promoting the Play-to-Earn mechanism.
This strategy brought short-term users who solely focused on earning money while playing a game with poor graphics and weak narratives.
Not to forget the congestion issues with some of the games based on layer-1 networks like Ethereum.
This has changed as companies now bring AAA-rated graphics, strong narratives and fun mechanics to Web3 games.
The network scalability for a large user base and potentially mainstream adoption is also improving day by day.
Many projects have been building their own L1 and L2 networks dedicated to Web3 gaming.
Why is Web3 gaming booming in Southeast Asia?
Invezz: Southeast Asia now is one of the major hubs for the Web3 industry and gaming development, with APAC’s leadership in Web3 gaming development, contributing 39% of all new blockchain games. From your perspective, what makes Southeast Asia stand out for Web3 gaming?
The Web3 ecosystem witnessed strong interest from APAC users for many reasons. The developer growth in countries like Vietnam and the Philippines and the crypto-friendly regulations in Singapore and Thailand had a positive impact on the adoption of blockchain gaming in the region.
Economic factors also play a key role. For example, the average income per person per month is around $300 in India.
In 2021, many Axie Infinity players could make much more than that, sometimes even thousands of US dollars, by just playing the P2E game. This brought huge attention to Web3 games.
Invezz: In 2021, Axie Infinity was a significant milestone for Southeast Asia’s Web3 gaming space. How has the region developed since then, and what are the biggest trends you’re seeing in the Web3 gaming ecosystem now?
Indonesia, Vietnam, and the Philippines have been leading the Web3 space since 2021.
In 2024, these countries ranked prominently in the Global Crypto Adoption Index: Indonesia at 3rd, Vietnam at 5th, and the Philippines at 8th.
While Vietnam was at the top of the chart in 2021, the Philippines ranked 15th and Indonesia wasn’t even in the top 20 countries — ironically, Indonesia wasn’t even named in the 2021 Global Crypto Adoption Index by Chainalysis.
The momentum shows a significant shift in crypto adoption in Southeast Asia as more and more people understand the technology and aim to utilize the opportunities while the governments develop supportive regulatory frameworks for their youthful and tech-savvy populations.
And it’s not just Web3. Southeast Asia has been a gaming powerhouse since the early Ragnarök Online days — a 2000s massive multiplayer online role-playing game released in South Korea.
Games like Ragnarök helped players make a natural transition into Web3 games, all thanks to the in-game economies, digital ownership, and community-driven gameplay.
The increasing role of AI in blockchain-based games
Invezz: AI is becoming an essential part of gaming, even in blockchain-based games. Do you think AI will play an even bigger role in game development moving forward? If so, how?
AI is going to be one of the key elements of developing Web3 games and infrastructure.
AI platforms could help create dynamic game environments to give each player a unique and personalized experience.
The non-player characters could also become more interactive with the help of AI technology. AI-powered decentralized applications could also be the next big trend within Web3.
As Jensen Huang, the CEO of NVIDIA, says: “AI can perceive, reason, plan, and act.” This hints at a world of possibilities and unique utilities for the use of AI in Web3 gaming.
The burgeoning AI technology could also help developers build blockchain games faster than ever, as the creation of storylines and branch points would usually take years in traditional game development.
Scope of Zero-knowledge proofs and challenges in mainstream adoption
Invezz: Zero-knowledge proofs are still a niche concept that is yet to be adopted widely. Do you think zero-knowledge proofs can become the default scaling solution for Ethereum and other blockchains?
Zero-knowledge proofs can potentially become the default scaling solutions for layer-1 blockchains like Ethereum. This is majorly due to their scalability and privacy enhancement.
It’s important to note that the mainstream adoption of ZKPs would depend on overcoming their main challenge: the technological complexity and need for standardization. In simple terms, the technology doesn’t need to be only user-friendly, but it should also be developer-friendly.
The ease of development would have a strong impact on the ZKP’s future. Let’s say, fewer bugs would mean fewer problems and vulnerabilities.
As the technology matures and these issues are addressed, ZKPs could play an important role in blockchain scaling solutions as the transaction costs drop and the overall user experience improves.
Web3 gaming could see greater innovation, adoption under the Trump administration
Invezz: Could Trump’s pro-crypto stance lead to friendlier regulations for Web3 gaming, making it easier for developers to integrate blockchain and tokens?
US President Donald Trump’s pro-crypto movements have already started to show a positive impact on the ecosystem.
More favourable regulations and the emergence of national crypto reserves would likely add to the positive investor and developer sentiment.
The reduced hostility from US regulators could potentially allow developers to integrate crypto assets into their Web3 games more freely, fostering innovation and global adoption.
However, the regulatory clarity would also depend on the US Congress, not just the president.
The Web3 gaming sector needs clear token regulations and specific blockchain-gaming-friendly policies.
These key factors will take the GameFi sector to a new level of investment and finally bring Web3 closer to the top level of Web2 games.
Web3 to soon match the quality of leading Web2 games
Invezz: As Chairman of iCandy, how do you see blockchain gaming evolving in the next five years?
I expect a sharp rise in Web3 gaming as companies and developers aim to make the user experience better and better.
Soon, Web3 games will match the quality of the leading Web2 games. Expect polished, story-driven, and immersive Web3 titles.
The value of the global blockchain gaming sector is expected to rise from $23 billion in 2025 to $313 billion in 2030 to $887 billion in 2032, roughly 38.5 times in seven years, according to the Amagi Digital report.
The user interface is another key area that will improve. Users would be allowed to easily connect their digital wallets with Web3 gaming platforms and make seamless transactions.
Some players might not even realize they’re using a blockchain-based game.
The next big trend after P2E would be Play-and-Own. Thanks to NFTs, users would have full ownership and control over their in-game items. The hybrid economies would allow players to buy, sell, or hold their collectibles without engaging with complex DeFi platforms.
Moreover, players won’t be limited to using a single blockchain, as cross-chain gaming will be made possible. This will help in the mainstream adoption of blockchain gaming.
Web3 gaming is no longer about speculation — it’s about creating a long-lasting gaming experience with real ownership. That’s where the future is headed.
The post Interview: Web3 gaming is catching up to Web2, but investment remains a roadblock, says ZKcandy CEO Kin Wai Lau appeared first on Invezz
