Author: Chloe, ChainCatcher

Recently, Solana Foundation President Lily Liu posted on X that "games on the blockchain will not return" and said that blockchain games are dead.

Her judgment comes from a Polymarket post, "Mark Zuckerberg's Meta is gradually giving up on the Metaverse vision after spending $80 billion." Although Meta’s blueprint does not explicitly involve blockchain or crypto-assets, its strategy highly overlaps with the future described by Web3 chain games in the past few years: virtual worlds, digital asset ownership, and immersive online economies.

Even the richest players have withdrawn from the game. Blockchain games used to be the most potential narrative in the crypto industry to "break the circle". Are they at the end of their rope today?

Collapse of the entire track: Are chain gaming projects shutting down one after another?

In August last year, of Play issued an announcement that seemed to be a confession to the market. Its full-chain pirate RPG "Pirate Nation" would be closed within 30 days. With two proprietary blockchains offline and token rewards going to zero, community players can only burn their assets in exchange for so-called "certificates" that may one day be useful, but most likely won't, and the game studio, which raised $33 million two years ago, vowed to build the future of on-chain gaming.

The PIRATE token plunged 92% within days following the announcement. Co-founder Adam Fern admits: "Closing Pirate Nation was one of the hardest decisions I've ever been involved in. But the truth is, it was never going to be a breakthrough mass-market title."

Pirate Nation is not an isolated case, it is just a small microcosm of the blockchain game debacle in 2025.

List one by one the list of blockchain games announced to be shut down last year. Ethereum game “Ember Sword,” which had attracted $203 million in funding through NFT land purchases, announced its closure in May last year, with developer Bright Star Studios bluntly citing a lack of funds.

Nyan Heroes, a third-person shooter battle royale game built on Solana, was once the wish list of more than 250,000 PC platform players. However, it also ended operations in May last year due to a financing breakdown, and its token NYAN plummeted by more than 99% from its high point. "Final Fantasy" creator Square Enix's Ethereum blockchain game "Symbiogenesis" also came to an end in July.

Also Gala Games' MMORPG that was officially authorized by "The Walking Dead" was also offline in July. The NFT-based mechanized combat game "MetalCore" has no news after shutting down its servers in March. The developer has quietly turned to launching a new game on Steam that has nothing to do with the blockchain.

The project that has been most lamented by the market recently is "Wildcard". After the TGE in March this year, the market value of this project only reached a maximum of 1.1 million US dollars. The community generally questioned the project as being irresponsible and soft. According to crypto asset data platform RootData, Wildcard has raised $46 million in financing, led by Paradigm.

Its founder Paul Bettner has participated in the development of well-known games such as "Words With Friends" and "Lucky's Tale", but now, even the endorsement of top VCs and the management of senior game players cannot prevent the collapse of the entire chain game track.

In addition, there are "Deadrop", "Blast Royale", "Mojo Melee", "Tokyo Beast", "OpenSeason", and "Captain Tsubasa Rivals". Behind each project are millions or even tens of millions of dollars of investment, the accumulation of countless game users, and promises that eventually came to nothing.

Web2 players want a good game, but Web3 players only want revenue

Most of the founders have real game development backgrounds, and their vision for on-chain games when raising funds was not empty talk. Why did the project end up being shut down or returning to Web2?

"Web3 games have built a whole set of investor-driven capital structures through tokens and NFTs before they have verified player needs." In other words, the people who fund these games and the people who ultimately need to stay in the game are not the same group of people from the beginning.

When it was discovered during the development process that the player base on the chain was smaller than expected and more biased toward short-term arbitrage, tokens continued to fall, and development costs continued to rise, the studio’s only choice was to close or abandon the blockchain identity and turn to the traditional market. No matter which path was taken, early Web3 investors and NFT holders were the final payers.

The farming simulation game "Moonfrost" is a typical case. Developer Oxalis Games raised $6.5 million and ran a Play-to-Airdrop campaign for more than a year, selling 1,833 NFT boxes for $150 each. Then in November 2025, the team announced it was leaving Web3 and relaunching as a paid PC game on Steam, with no more NFTs, tokens, or blockchain.

And just the day before the announcement, CEO Ric Moore was still publicly talking about how to create "slow and meaningful Web3 games." The reason given by the team is: "Web3 players want to make money, Web2 players just want a good game." It took them three years and millions of real money to see the real rules clearly.

The 2025 Blockchain Game Alliance (BGA) industry report also confirmed the decline of blockchain games: annual investment in blockchain games dropped to approximately US$293 million, a staggering drop from US$4 billion in 2021 and the peak of US$10 billion in 2022. DWF Labs describes the current phase as a “necessary reset.” Perhaps the biggest sequela left by the failure of this track is the credibility crisis of the entire chain game.

The BGA report shows that 36% of the respondents listed "fraud, fraud or rug pull" as the biggest threat to the industry. Even if the shutdown of most projects is not intentional fraud, from an outside perspective, the repeated cycle of "raising funds, issuing coins, and closing down" is almost indistinguishable from a rug pull. "This industry needs real game developers and real users who want to play games, both are indispensable."

Infrastructure and market conditions become advantages, and stablecoins and AI bring new opportunities

The collapse of the blockchain game narrative does not mean that consumer applications in the encryption industry have come to an end. The BGA report shows that 65.8% of industry practitioners remain optimistic about the next 12 months. This optimism is based on deliverable products and sustainable revenue models. At the same time, the large-scale transfer volume processed by stablecoins and AI tools are compressing game development costs to a fraction of the past. Infrastructure and market conditions have never disappeared. Even from the perspectives of many developers, several possible paths can be seen.

NEXPACE CEO Sunyoung Hwang put forward a core principle when talking about his "MapleStory Universe": wallets, gas fees, and token economics are obstacles for most players, not bonus points. The blockchain layer should do meaningful work behind the scenes, such as enabling true asset ownership, driving an open economy, etc., while players only need to focus on the game itself. "If the operation of the infrastructure infiltrates the game experience, the game design has failed."

Animoca Brands CEO Robby Yung and PLAY Network CEO Christina Macedo believe that retention is the only truth. The retained data of D1, D7, and D30 was true in the console era, it was true in the mobile gaming era, and it is still true in the encryption industry. Macedo points out that standard benchmarks for mobile games are 35-45% retention for D1, 15-25% for D7, and 5-10% for D30, and most Web3 games simply don't hit these basic health metrics.

Yield Guild Games co-founder Gabby Dizon believes that the reason for the industry's failure is that "it took too long to measure the wrong things," including using outdated indicators such as VC financing amount, token price, NFT sales, etc. The real metric simply requires players to be willing to pay because they see value in the gaming experience.

Finally, there are opportunities brought by stablecoins and AI.

The BGA report states that more than a quarter of respondents view stablecoins as key to the industry's success. Compared with volatile game tokens, stablecoins are friendlier and easier to understand for new users, and have been increasingly used for tournament bonuses, in-game rewards and cross-border payments. Sequence further pointed out that smart game developers are paying attention to stablecoin payments. Whether it is used for on-chain assets or other scenarios, lower handling fees, instant settlement, and easier profit sharing all have great scenario advantages.

And AI is changing cost structures. Simon Davis of Mighty Bear Games points out that AI-native teams are surpassing the output of traditional studios at a fraction of the cost and manpower. Animoca Brands agrees that the key to sustainability in 2026 lies in AI-driven or AI-assisted development practices, which will revolutionize the economic model of producing quality gaming content.

Blockchain games are not dead yet, is a reset necessary at this stage?

The core contradiction of the past chain game cycle has never changed: the investor-driven capital structure is ahead of the verification of player needs. When the retention rate cannot support the token economy, and when development costs engulf financing figures, the only end result for the project side is shutdown or de-blockchainization, and it is always the early holders who pay the bill.

But this reshuffle has also given game developers a more pragmatic consensus, making the blockchain invisible, measuring success or failure by retention rates rather than token prices, using stable coins to replace high-volatility tokens as the payment layer, and using AI to reconstruct development costs. What these directions have in common is: first make a game that can stand the test of traditional market indicators, and then let the blockchain exert its true value at the bottom.

Blockchain games may not be dead as Lily Liu said, but the market is indeed saying goodbye to the old cycle of using tokens to drive the number of users until it runs out of development funds and ultimately has to go back to Web2.