2025 Review: Crypto Gaming Collapses Due to Funding Difficulties

Source: PortaldoBitcoin Original Title: Retrospective 2025: Cryptocurrency Games Collapse Due to Lack of Funding Original Link: https://portaldobitcoin.uol.com.br/retrospectiva-2025-jogos-com-criptomoedas-entram-em-colapso-com-falta-de-financiamento/ 2025 has been a year of shattered crypto gaming dreams for many. But this dream didn’t fade on its own—it was crushed by the venture capitalists who no longer believed in its risks and stopped investing.

In 2025, many well-known crypto games ceased operations. These closures led to developer layoffs, abandoned loyal player communities, and the entire digital asset collection became nearly worthless.

Some of these games had promised to operate permanently, claiming that the power of blockchain would keep them running indefinitely—but that promise was clearly broken.

In recent years, the video game industry has faced broader difficulties, including large-scale layoffs. While no games of the quality or scale of Fortnite have shut down this year, we have seen some truly promising games halt development permanently. The truth about the survival crisis of crypto games is: venture investors realized that investing time or money in this space is simply not worth it.

Most crypto games that closed in 2025 did so because developers claimed a lack of funding to continue development. In other cases, developers said the game had completed its cycle or that the team was migrating to new projects—mainly leaving crypto and gaming altogether.

A CEO of a leading exchange investment firm stated, “My guess is that most of them probably raised funds in 2022, which is how long they could sustain themselves. Venture funding for games has been scarce for years.”

Many other industry experts also noted that venture capital funding has begun to dry up, leading to the shutdown of multiple games.

A fund founder said that, due to historical changes in investment terms (such as increasing total token supply), “all trust between investors and game developers has disappeared.” He added that investing in games has become “more cautious” now.

The head of a Web3 gaming company also mentioned that, when talking with their venture investors and crypto game developer network, he sensed an “open” and “widespread” sentiment that funding has dried up.

A senior gaming industry insider and former CEO of a now-defunct game developer said, “The whole situation is terrible because even if you have a good venture fund, limited partners think like this… Crypto companies should aim for double the returns in half the time of traditional funds. So they want absurd returns and have no patience. By the end of 2023 and mid-2023, crypto funds stopped investing and issuing checks.”

Game development is indeed a tough business; even outside the crypto world, many major releases like “Wonder Woman,” “Kingdom Hearts Missing Link,” and new “Titanfall” games have been canceled this year. When you add cryptocurrency into this already fragmented equation, you attract profit-hungry investors and expose your failures to a larger audience—thanks to many crypto game developers who use games as a way to attract investment and community support.

A former CEO explained that his game had “one of the largest audiences in Web3,” with strong core metrics like early player retention. However, he claimed investors didn’t care about these at all and instead told him to increase social media accounts, pay influencers to promote the game, and do other “nonsense.” He believed investors simply didn’t care about the game. The game ceased operations in February due to lack of funding.

A CEO of an investment firm told the media that most Web3 investment funds have started prioritizing tokens over seeking equity in games. He explained that traditional venture capital firms usually invest with a five-year horizon to exit via an IPO. However, since this is rare in the gaming industry—and even more so in crypto games—these funds are eager to see crypto games launch tokens so they can exit their investments.

“For many game developers, this is more of a late-stage plan, so when the game/community development isn’t mature enough, acceleration issues arise,” said a CEO.

However, this approach brings a host of new challenges, as crypto game tokens have faced as many difficulties this year as game development itself. As of writing, according to CoinGecko, none of the top 150 cryptocurrencies are gaming tokens by market cap, and only two are in the top 200.

A company’s IMX token was among the top 100 cryptocurrencies earlier this year but has fallen over 85% in value over the past 12 months. Despite a successful game and a passionate fan base, the company’s game token dropped 89% from its March all-time high to December 15.

“Tokens are simply not good investments. People don’t trust them. For good reason,” said a fund founder. “Returns from venture capital are made through tokens. The public no longer values tokens—even from established projects that once had hundreds of millions of dollars in market cap, or any minimally decent app or game.”

“Investing venture capital in any team that is at least trustworthy, with an initial valuation of $20-50 million (which is quite common), guarantees success,” he added. “Now, the probability of loss is 90%.”

Similarly, this token-centric approach has put unnecessary pressure on developers.

A co-founder of a now-closed game previously said that adding tokens to the equation was a “real nightmare.” He claimed it distracted the team from focusing on game development and maintaining token prices, while also dealing with pressure from players and retail investors.

Additionally, a meme cryptocurrency platform completely changed the token landscape, as more short-term profit opportunities flooded the market, causing investor attention to decline. A senior industry insider said that both venture funds and retail investors have lost interest in long-term crypto game tokens; they only want the next “hot coin” that offers absurd daily returns.

Now that the meme crypto craze has faded, funds are flowing into new narratives. A game company believes artificial intelligence and real-world assets are the two asset classes currently shifting attention and capital away from crypto gaming. This can also be seen in several crypto game studios migrating to AI projects—one of which claims the decision was driven by funding issues.

Ultimately, both venture investors and individual investors are tired of low-return crypto game investments and are choosing to allocate funds elsewhere. With this, crypto gaming is collapsing under its own weight, leaving players at a loss.

A creator of a collectible card game established a crypto game recovery fund to help abandoned players recover some value from their now-worthless crypto assets. The project allocated $500,000 worth of tokens and crypto assets to the fund and invited other projects to participate. However, no major projects joined.

Other games offer no simple way for players to get refunds. Fortunately, some community members managed to get their banks to refund their NFT purchases, claiming the studio did not deliver what was promised at sale.

Economic losses are one thing, but some crypto gamers bought these assets with the promise of participating in the development process and joining an expanding community. For some, it’s like a unilateral breakup that destroys their sense of belonging and routine. Everything is lost.

A content creator said, “Many people use video games as an escape, and when you find a game or game universe to immerse yourself in, you do so out of passion. When that game or story ends, you not only lose the game but often also lose the friends and community built through it.”

“It leaves a void in your life that goes beyond simply having no more games to play,” he added. “In many ways, it’s like losing a part of your daily life.”