Another month, another shutdown. Ember Sword. Treasure Chain. Blast Royale. One by one, games that once headlined investment decks and NFT leaderboards are folding—some without ever launching a playable product. In just the first five months of 2025, more than two dozen Web3 gaming projects have shut down. The reasons vary, but the pattern is impossible to ignore. And for those of us who care deeply about this space, it’s more than frustrating—it’s infuriating.

Web3 gaming was supposed to be different. Ownership, interoperability, new economies—it was a chance to challenge the old rules of game publishing and put more power in the hands of developers and players. But instead, we’ve inherited the worst parts of traditional gaming, added speculative greed on top, and too often forgotten the one thing that matters most: making great games.

A Wake-Up Call

Ember Sword’s team cited “funding issues” after raising around $200 million in NFT land sales and venture capital. Blast Royale, backed by major investors, decided to sunset and open-source their code. Treasure Chain launched a whole blockchain and shut it down within five months. These aren’t isolated failures—they’re symptoms of an industry that sprinted ahead without ever checking its footing.

Too many Web3 games have been built backwards—starting with tokens instead of gameplay. Economies were deployed before any meaningful core loops were tested. Some teams funneled significant resources into cinematic trailers and marketing assets while their actual games barely functioned. Investors, enamored by glossy decks and impressive résumés, poured capital into ambition over execution. The result? Projects that failed to find product-market fit, ran out of runway, or collapsed under the weight of their own hype.

Not All Failures Are Fraud

To be fair, not every shutdown is the result of malice or mismanagement. Some were earnest efforts by passionate teams who overreached. Making a game is hard. Making one in Web3—where developers must also handle token design, compliance frameworks, and a community-driven economy—is exponentially harder. But good intentions don’t insulate players or investors from the consequences of bad design, unclear value propositions, or poor planning.

And that’s exactly why the industry needs to grow up.

What the Industry Must Do

Web3 gaming won’t recover by repeating the same mistakes. If we want to build something sustainable, it’s time to reset our priorities.

It all begins with gameplay. If your game isn’t fun without tokens, it won’t magically become fun with them. Players know when they’re being sold a mechanic instead of an experience. Fun isn’t a feature—it’s the foundation.

Next, tokenomics need to be treated like economic design, not marketing strategy. Limit supply. Create sinks. Delay launches until the game works without a token. Pirate Nation, Shardbound, and Pixels are examples of studios taking this approach seriously—and it shows.

Investors also need to recalibrate their criteria. Innovation often doesn’t come from the most polished decks or the loudest social accounts. It comes from small, focused teams that experiment fast and build lean. In the traditional gaming space, indie games now generate nearly half of all Steam revenue. There’s no reason Web3 can’t reflect that same balance.

Finally, this space must prioritize integrity. Developers are increasingly managing assets with real monetary value. If they’re not working with licensed custodians or following compliance frameworks, they’re exposing their communities to unnecessary risk. Regulation isn’t something to avoid—it’s a baseline of trust.

There’s Still a Future Here

Despite the chaos, this is not the end of Web3 gaming. It’s a reset—a long overdue one. Every new industry has its reckoning. This is ours.

But the foundation remains strong. True digital ownership, player-aligned incentives, composable economies—these aren’t fads. They’re powerful ideas. If we pair them with thoughtful design, honest communication, and gameplay-first development, we can still deliver on the promise that brought so many of us here in the first place.

We don’t need more hype. We need more iteration. More prototypes. More transparency. More games that are fun to play, with or without a wallet.

The future is still there. We just have to earn it. As Sam Steffanina says, Web3 gaming is inevitable.