Crypto Gaming Collapses as Funding Dries Up

This was the 12 months that, for a lot of, the crypto gaming dream died. However that dream did not finish by itself—it was smothered by enterprise capitalists who stopped believing in it, and crucially, stopped investing in it.

In 2025, quite a few notable crypto video games shut down their operations, which Decrypt has tracked all year long. These closures left builders unemployed, devoted participant bases deserted, and whole collections of digital belongings rendered virtually ineffective.

A few of these titles even promised to be perpetually video games, claiming the ability of the blockchain would preserve it operating indefinitely—a promise that was evidently damaged.

The online game business has confronted broader struggles in recent times, together with widespread layoffs, and it’d be straightforward to say that every one of those video games closed down as a result of they merely weren’t ok.

Whereas we didn’t see a recreation with the standard (or scale) of Fortnite go offline this 12 months, we did see some genuinely promising titles completely halt growth (see: Deadrop). The reality about crypto gaming’s existential epidemic is that enterprise capitalists have realized it is merely not value their time or cash.

Nearly all of crypto video games that shut down in 2025 did in order builders pointed to a scarcity of funding to proceed growth. Elsewhere, builders acknowledged that video games had run their course, or that groups have been pivoting to new ventures—largely these exterior of crypto and gaming.

“My guess is that almost all of them in all probability raised cash in 2022, and that is simply how lengthy their runway has lasted,” Robby Yung, CEO of investments at enterprise capital agency Animoca Manufacturers, in addition to CEO of crypto recreation The Sandbox, advised Decrypt. “Enterprise capital funding in gaming has been dry for years,” he added.

A number of different business consultants additionally advised Decrypt that VC funding has began to vanish, leading to a slew of video games shutting down.

Beanie, the pseudonymous founding father of GM Capital, mentioned that “all belief is gone” between traders and recreation makers resulting from a historical past of builders altering the phrases post-investment—comparable to growing the token complete provide. Beanie mentioned he’s now “extra cautious” when making gaming investments.

Theodore Agranat, director of Web3 at Off the Grid maker Gunzilla Video games, additionally mentioned that chatting with his community of enterprise capitalists and crypto gaming devs, it seems like an “open” and “common sentiment” that funding has dried up.

“That entire state of affairs was fucked as a result of even in the event you had a great VC, their [limited partners] had this… thesis that crypto corporations ought to have twice the return in half the time of a daily fund. In order that they needed these redonkulous returns and had no persistence,” Chris Heatherly, recreation business veteran and former CEO of Nice Large Stunning Tomorrow—developer of the shuttered The Thriller Society—advised Decrypt. “In direction of the top of 2023, mid-2023, crypto funds stopped deploying and writing checks.”

Sport growth is certainly a troublesome enterprise even exterior of crypto, with huge video games like Marvel Girl, Kingdom Hearts Lacking-Hyperlink, and a new Titanfall recreation all getting cancelled this 12 months. When including crypto to that already fractured equation, you’re additionally attracting profit-hungry traders and placing your failures on a extra public stage—because of many crypto builders constructing within the open as a approach to entice funding and group assist.

Heatherly defined that The Thriller Society had “one of many greater audiences in Web3” with sturdy underlying metrics, comparable to early participant retention. Nevertheless, he claims that traders didn’t care about any of this, and slightly advised him to develop his social media accounts, pay for influencers to advertise the sport, and different “phony-baloney bullshit.”

Buyers didn’t care concerning the recreation, he believes. The Thriller Society shut down in February resulting from a scarcity of funding.

Yung advised Decrypt that almost all Web3 funding funds have moved to being “token-first,” slightly than wanting fairness within the recreation. Conventional VC companies, he defined, normally make investments with a five-year window to exit by way of an IPO, or preliminary public providing. Nevertheless, as that is uncommon in gaming—not to mention crypto gaming—these funds are as an alternative desirous to see crypto video games launch tokens to allow them to exit their funding.

“For a lot of recreation builders, this was additional down their roadmap, so it presents a difficulty of bringing [the token generation event] ahead when possibly the sport/group growth isn’t mature sufficient but,” Yung advised Decrypt.

This method provides a brand new set of challenges, nonetheless, as crypto gaming tokens have struggled simply as a lot as recreation growth this 12 months. On the time of writing, there are not any gaming tokens within the prime 150 cash by market cap, in keeping with CoinGecko, and solely two amongst the highest 200.

Immutable’s IMX token, which sat within the prime 100 cash earlier this 12 months, has plummeted in worth by greater than 85% over the past 12 months, in keeping with CoinGecko. And regardless of operating a powerful recreation in Off the Grid with a passionate fanbase, Gunzilla Video games’ GUN token is down 89% from its all-time excessive set in March, as of December 15.

“Tokens simply aren’t investible. Individuals don’t belief them. And for good purpose,” Beanie mentioned. “The VC payback is by way of tokens. The general public isn’t valuing tokens anymore—even from established initiatives that when had baseline valuations within the tons of of hundreds of thousands of {dollars} for any half-decent app or recreation.”

“VC investing in any semi-credible group at a valuation of $20 million to $50 million seed (fairly customary) was a simple win,” he added. “Now it’s a 90% loss base case.”

Equally, this token-first method applies undesirable strain to the builders.

Krypticrooks, the pseudonymous co-founder of Fractional Rebellion Studios, which developed the now-iced recreation OpenSeason, beforehand advised Decrypt that including a token into the combo was a “fucking nightmare.” He mentioned that it break up the group’s consideration between creating the sport and supporting the token’s value, all whereas being shouted at by gamers and retail traders alike.

Moreover, meme coin launchpad Pump.enjoyable has utterly modified the panorama for tokens, with the eye span of traders dropping as extra short-term achieve alternatives flooded into the market. Heatherly mentioned that each enterprise capital funds and retail traders had misplaced curiosity in a long-term crypto gaming token; all they needed was the subsequent “Buttcoin” that may put up insane every day good points.

Now that meme coin fervor has cooled down, funds have flowed into new narratives. Agranat from Gunzilla Video games believes AI and real-world belongings are two asset lessons which are presently taking consideration and capital away from crypto gaming. This will also be seen with a number of crypto recreation studios pivoting to AI initiatives—one in all which mentioned it was resulting from funding points.

In the end, each enterprise capitalists and retail traders have grown fatigued by poorly performing crypto gaming investments and have opted to place their cash elsewhere. In doing this, crypto video games have crumbled beneath their very own weight, and avid gamers have been left within the mud.

The makers of crypto buying and selling card recreation Splinterlands created the Crypto Gaming Restoration Fund for deserted gamers to try to claw again among the worth of their now-useless crypto belongings. The venture assigned $500,000 value of crypto tokens and belongings to the fund, calling upon different initiatives to affix the marketing campaign. Nevertheless, no main initiatives joined in.

Different video games, comparable to Deadrop, left gamers with no straightforward method for gamers to be refunded. Luckily, some group members have been capable of drive their banks to refund their NFT purchases, claiming that the studio didn’t ship what was promised on the time of sale.

Monetary loss is one factor, however some crypto gamers purchased into these belongings with the promise of being a part of the event course of and becoming a member of a burgeoning group. For some, it felt like a one-sided break-up, ripping away their emotions of belonging and behavior. Every little thing was misplaced.

“Many individuals use video video games as a type of escape, and if you discover a recreation or gaming universe to immerse your self in, you accomplish that out of ardour,” a content material creator and fan of Deadrop, Mayor Reynolds, advised Decrypt. “When that recreation or story involves an finish, you not solely lose the sport however, many occasions, the chums and group that you simply made by it.”

“It leaves a void in your life past simply not having your recreation to play anymore,” he added. “It’s like shedding a part of your on a regular basis life in so some ways.”