- Web3 game funding shrank 55% this year as token models lost players and capital.
- Web2.5 studios grew by using blockchain quietly to boost payments and revenue.
- Stablecoins improved micro-payments and helped shift growth toward Web2.5 games.
Blockchain gaming entered 2025 with some optimism, but the mood shifted quickly as funding dried up across the sector. Capital inflows, which once helped dozens of studios stay afloat, fell more than 55% from last year.
The numbers tell the same story in sharper detail: roughly $147 million arrived in Q1, half that in Q2, a brief $129 million rebound in Q3, and then a near-silent close to the year. As token treasuries thinned, so did project timelines, and many teams found themselves recalibrating under pressure.
Source: X
Token charts echoed the same decline. Prices across major gaming assets sank deep into double-digit losses from their highs, erasing reserves that many developers relied on. The downturn left several studios without runway and accelerated a series of closures that had already begun earlier in the year.
Funding Slide Hits GameFi Hard
The impact landed first on Web3 gaming projects built around token-driven loops. Market data places the overall gaming token cap near $6.1 billion, but that figure conceals the scale of individual declines.
GALA has dropped 82% year over year, the Sandbox is down 79%, and Immutable slid 83%. Each fall carried knock-on effects: operations slowed, support teams shrank, and early partners stepped back.
User retention metrics added another layer of strain. Many titles lost close to 60% of their players within a month, a pattern driven by bots and reward-seeking activity rather than committed users. Inflationary models encouraged rapid earnings and just as rapid exits.
Consequently, by the end of Q2, more than 300 gaming dApps had shut down. A long-standing analytics platform, DappRadar, followed suit, ending its seven-year run in the space. The cumulative effect was a GameFi segment increasingly stretched thin, with less capital, fewer players, and shrinking confidence.
Web2.5 Studios Move Differently, and Steadily
While that side of the market contracted, another group of developers worked with less attention and fewer disruptions. Web2.5 studios, those adopting blockchain as infrastructure rather than a front-facing product, maintained a steadier trajectory.
Their gains were not loud, but they were consistent. Teams such as Fumb Games, Mythical Games, and Wemade’s Wemix ecosystem continued to ship updates and report meaningful revenue.
Their strategy was practical: keep blockchain behind the scenes, rely on familiar design, and build around reliable monetization. Ownership tools, simplified payments, and a few well-chosen blockchain functions supported the gameplay rather than defining it.
This approach softened the learning curve for players. Without token speculation or complex onboarding, games ran closer to traditional models, which allowed them to retain and monetize users more effectively. The difference in outcome became clearer as the year progressed.
Payments and Stablecoins Shift the Mechanics
Stablecoins added momentum to this shift. Their predictable value and broad availability helped studios streamline microtransactions, settle cross-border purchases, and build reward systems without exposing users to price swings.
With many games serving global audiences, the improvement in payment flow was noticeable. Some traditional brands also began to test these frameworks. FIFA moved away from its previous blockchain partner and launched FIFA Rivals on the Avalanche network.
The game’s rollout brought other mainstream partners into the fold, signaling a more measured approach to blockchain integration, one that leaned on payments and infrastructure rather than speculation.
The trend suggested that established companies were more willing to experiment when blockchain played a supporting role rather than anchoring a token-centric economy.
Related: Coinbase Base App Becomes Publishing Layer for Web3 Creators
A Market Reset Taking Shape
Despite the funding contraction, activity across blockchain gaming did not disappear. Reports show about 4.66 million daily active wallets in Q3, indicating that a sizable audience continued to interact with blockchain-enabled titles.
What changed was investor behavior. Capital followed studios with clearer user traction, steadier retention, and fewer speculative components. The broader pattern suggests a reset rather than a retreat.
Web3 projects dependent on incentive loops struggled to keep pace, while Web2.5 studios using blockchain as a quiet utility advanced through the year. The sector emerged leaner but also more grounded, shaped by real engagement and revenue instead of the rapid-fire cycles that once defined it.
