Numerous blockchain games have faced shutdowns this year, including several that were once highly anticipated. Experts suggest that the public failures of blockchain games are more pronounced compared to traditional gaming titles. Some argue that the pressure from gaming tokens diverts developers’ attention from actual game creation. The crypto gaming sector is currently grappling with a worrying trend of projects either ceasing operations or being abandoned after generating substantial hype and conducting token sales. Analysts believe this is unsurprising given the inherent difficulties in game development, pointing to the flawed nature of gaming tokens that burden nascent projects with excessive expectations.
While it may seem obvious that such a downturn was inevitable, many of the recently terminated games had initially generated significant excitement within the blockchain community. Take Deadrop, for instance, which was once associated with popular streamer Dr. Disrespect and garnered considerable buzz before collapsing in January following the content creator’s exit over alleged misconduct. Similarly, the Solana-based shooter Nyan Heroes amassed over 250,000 wishlists on various platforms before shutting down in May due to financial constraints. Other notable titles, including Raini: The Lords of Light, MetalCore, Blast Royale, Mojo Melee, and OpenSeason, are also among those that have ceased operations, with The Walking Dead: Empires and Symbiogenesis set to follow suit in the near future. The outlook for crypto gaming appears bleak.
“Even in the traditional game world, 90% of games fail,” remarked John Linden, co-founder and CEO of Mythical Games. “That’s essentially what we’re witnessing on the Web3 front—90% are destined to fail. The difference is that this is more visible because, in traditional gaming, players aren’t involved in the design process until after the game has released.” In the traditional gaming landscape, when a major title flops, it typically ignites a significant reaction from the industry, and in some cases, players may receive refunds, such as when CD Projekt RED permitted refunds for Cyberpunk 2077 after its disastrous launch in 2020. Conversely, most conventional games tend to fail before players can invest money in them, as seen with the cancellation of The Last of Us: Factions in 2023.
This scenario differs in the crypto space, where games frequently issue tokens and NFTs long before the full game is completed, often when they are merely concepts. Refunds for these digital assets are exceedingly rare, as seen in the case of Deadrop, where players had to seek refunds through banks and credit card companies after the studio went silent. However, the success of these claims depended on the discretion of financial institutions, leaving many disappointed.
The landscape of crypto gaming is evolving, with securing investment becoming increasingly difficult. “A few years ago, securing funding for blockchain games with tokens and NFTs was relatively straightforward. Investors were not as informed about sustainability and revenue,” explained Keith Kim, head of strategy at Nexpace, the developer behind MapleStory N. “It was a time when investors were eager to invest, assuming their returns would multiply significantly.”
The hype surrounding crypto gaming has significantly diminished, especially in light of numerous high-profile failures. The leading cause of recent blockchain game closures has been the inability to secure additional funding, as highlighted in several cases mentioned earlier. Linden from Mythical Games concurred, stating that the focus on “hype and speculation” rather than on the core fundamentals has hindered the sector’s progress.
Veteran game developer John Smedley, known for co-creating titles like EverQuest and H1Z1, shared that many crypto games alienate traditional gamers, a demographic that is often skeptical of blockchain integration. By neglecting this audience, crypto games limit their growth potential. To address this, his upcoming crypto shooter, Reaper Actual, will feature a marketplace that caters to both traditional and crypto gamers, offering in-game items as NFTs or traditional purchases via established PC marketplaces.
Similarly, Off the Grid, a highly successful blockchain title, also enables gameplay on non-crypto-friendly platforms like Steam, PlayStation, and Xbox, thereby broadening its audience. Notably, both of these games were developed over several years with limited public exposure, contrasting sharply with other now-defunct titles that launched prematurely and began selling tokenized assets without a playable version ready.
“It takes substantial time to develop games,” Linden remarked. “One of my close associates was among the original creators of the Grand Theft Auto series, and his latest project has just surfaced after years in development, which began well before we established Mythical in 2018.” For context, Deadrop allowed players to engage with the game at a pre-alpha level, provided they bought a Founders Pass NFT for $50. It was under development for nearly two years before ultimately shutting down, a timeline considerably shorter than that of Linden’s friend’s project.
Krypticrooks, a pseudonymous co-founder of the crypto game studio Fractional Uprising, shared his own experiences with the pressures that come with a crypto token during the production of the now-defunct OpenSeason. He noted that his work hours extended to 18 per day, as he struggled to balance game development with the demands of token management, particularly as investors grew impatient with price fluctuations. Ultimately, the project halted due to insufficient funding, leading its creators to pivot to a more straightforward game without token components.
“We faced immense expectations regarding our token from the community. Investors were fixated on the price, demanding constant increases,” Krypticrooks expressed. “Incorporating a token became a nightmare.” Linden echoed this sentiment, acknowledging the challenges posed by tokens associated with smaller projects, which lack stable demand over time. He asserted that maintaining a token for a game would become unfeasible as interest wanes. As a result, Mythical Games refrains from offering “single-game tokens” or any assets before a game is fully ready for release.
Conversely, Krypticrooks believes that increasing the number of tokens is the solution, highlighting last year’s launch of the Pump.fun platform as a pivotal moment in the industry. “With 18,000 new tokens emerging daily, individual tokens struggle to retain attention,” he explained. “They’ve opened Pandora’s box.”
Pump.fun, a Solana meme coin launchpad that enables anyone to create a token within minutes at no cost, has led to the creation of over 11.8 million tokens since its inception in January 2024, prompting competition from other launchpads that facilitate the introduction of thousands of additional coins daily.
While some traders have voiced concerns about the influx of meme coins, arguing that it negatively impacts the industry, the trend continues unabated. Krypticrooks pointed out that this surge has not only overwhelmed the market but has also shortened investors’ attention spans, akin to the rapid consumption patterns seen on platforms like TikTok. Consequently, gaming tokens are losing traction, with none remaining in the top 100 cryptocurrencies by market capitalization.
“Attention spans have dwindled significantly as people chase fleeting market cycles that last only 10 to 15 minutes,” he noted. “This has severely impacted Web3 gaming.”
