Crypto games are struggling in 2025, but big brands aren’t giving up
As person numbers decline and funding slows, the once-hyped web3 gaming sector seems to be approaching a possible crossroads.
Blockchain gaming had a tricky second quarter in 2025 as each day person exercise dropped by 17%, and greater than 300 gaming decentralized purposes went inactive. To make issues look worse: investments in crypto video games fell to a two-year low. And but, regardless of all that, conventional gaming giants like Sega, Ubisoft, and FIFA continued transferring into web3.
Analysts say that although the market is in a downturn, the long-term potential remains to be comparatively sturdy, and a few builders and types are quietly getting ready for the subsequent huge breakout.
In line with information compiled by DappRadar’s blockchain analyst Sara Gherghelas, the primary quarter of 2025 confirmed simply how fragile many early web3 video games nonetheless are.
“Dozens of Web3 video games shut down, funding continued its decline, and person exercise dipped throughout the board. From overhyped MMORPGs to play-to-earn battlers, many titles merely couldn’t survive the cruel market situations, whether or not attributable to dried-up investor backing, poor retention, or unsustainable tokenomics.”
Sara Gherghelas
On the identical time, broader crypto market situations added extra strain. Knowledge from Delphi Digital earlier confirmed that the majority crypto sectors carried out worse than Bitcoin (BTC). AI frameworks misplaced over 84% of their worth. Agent-based tasks have been down greater than 70%. Memecoins dropped by 51%, and even gaming infrastructure noticed losses above 50%. As compared, Bitcoin’s return solely fell about 5%, whereas Ethereum (ETH) and Solana (SOL) every declined roughly 25%.
Business dominance % by UAW within the dApp ecosystem | Supply: DappRadar
The decline got here as a shock, particularly since a Binance survey late final yr discovered that just about half of customers anticipated AI tokens and memecoins to steer the market in 2025. However that optimism didn’t play out. Many of those sectors grew to become oversupplied or suffered from hype that didn’t match precise use. The identical occurred to web3 gaming in some areas, the place early “play-to-earn” fashions couldn’t maintain up over the long run.
Not over but
Even so, momentum nonetheless appears to be constructing behind the scenes. Again in February, Immutable co-founder Robbie Ferguson mentioned that a number of gaming firms price over $1 billion have been now open to launching their very own tokens. He famous that a few of them are publicly traded and wouldn’t have thought-about tokens only a yr in the past.
Per Ferguson, 2025 is compressing years of growth right into a a lot shorter timeframe. He additionally believes that this shift might result in higher-quality blockchain video games and extra critical token economies which can be really helpful to gamers.
In the meantime, Q2 nonetheless had some optimistic indicators. Though gaming exercise dropped to 4.8 million each day customers — the bottom since early 2023 — sure chains and video games confirmed power. Knowledge from DappRadar reveals that the opBNB blockchain led by energetic wallets, whereas WAX led within the variety of transactions, suggesting that gamers on WAX have been extra deeply engaged. Newer chains like Aptos, Sei, and SKALE additionally noticed extra gaming visitors.
The sport “Off the Grid” stood out by gaining sturdy momentum on GUNZ, a customized Avalanche subnet. Though it was nonetheless in testing, some customers had already began utilizing its mainnet.
You may additionally like: The worldwide gaming renaissance will die a untimely loss of life with out Europe | Opinion
Not everybody survived, although. In line with DappRadar, over 300 video games listed as energetic in Q1 had no on-chain exercise in Q2. A few of them might have shut down utterly, whereas others might have paused updates, switched blockchains, or simply didn’t sustain with good contract upgrades. Gherghelas instructed that this displays how briskly issues change in a nonetheless younger and pretty experimental business.
A number of the largest closures have been Ember Sword, which didn’t increase extra money regardless of earlier hype; Nyan Heroes, which collapsed after its token misplaced virtually all its worth; Realms of Alurya, which was paused after a key grant was pulled; Mojo Melee, whose workforce pivoted to constructing AI film instruments as a substitute of video games; and The Strolling Lifeless: Empires, which can stay playable solely till the tip of July.
Even the metaverse house noticed combined outcomes. Buying and selling quantity for metaverse NFTs fell 26% this quarter, however the variety of gross sales really rose by 54%, that means costs have been down however exercise was up.
Yuga Labs opened 24/7 entry to its Otherside metaverse. Animoca’s Mocaverse launched its personal layer 1 chain targeted on id and information possession. Pixels slowed down its progress push to deal with higher gameplay and is planning a cell spin-off known as Pixels Buddies for later this yr. The Sandbox ran a large 40-experience season and began working with Cirque du Soleil on a metaverse crossover.
Investments in web3 video games by quarters since early 2024 | Supply: DappRadar
Gherghelas notes that whereas funding has fallen — solely $73 million was raised in Q2, down 93% from the identical time final yr — most of that cash went to infrastructure tasks, not video games. For instance, Extremely raised $12 million to increase its publishing platform, MagicBlock raised $7.5 million for a real-time gaming engine on Solana, and Cooking.Metropolis raised $7 million to construct a cooking recreation with token rewards.
She added that sturdy infrastructure and affected person growth will matter greater than hype going ahead. The flashy cycle of 2021 and 2022 could also be over, however the groundwork for the subsequent section is being laid proper now.
Learn extra: Soneium layer 2 launches gaming incubator to help tasks and drive ecosystem adoption
