Crypto Gaming Faces Major Collapse in 2025 Amid Funding Drought and Market Decline
In 2025, venture capital funding for crypto gaming sharply declined, resulting in multiple game shutdowns, layoffs, and the abandonment of player communities. Several crypto games and studios including Battlebound/Anterris, Blade of God, Derby Race, Ember Sword, Kryptomon, Hello Monster, Loot Legends, and The Mystery Society ceased operations. Notably, The Mystery Society closed in February 2025 due to lack of funding, with investors preferring social-media growth and influencer spending over deeper game development.
The market for gaming tokens also collapsed as an asset class. By the time of reporting, no gaming tokens ranked within the top 150 by market capitalization, and only two appeared in the top 200. Tokens such as IMX and GUN experienced declines exceeding 85% and 89% respectively from their all-time highs. Investors increasingly pursued token-first exits rather than equity stakes, clashing with traditional venture capital timelines that typically seek five-year exits via IPOs; this misalignment contributed to the halt in funding since mid-2023.
Furthermore, the broader crypto gaming ecosystem suffered from investor fatigue encouraged by meme-coin and Pump.fun dynamics, shifting focus towards artificial intelligence and real-world assets as attractive new areas for capital investment. Despite these challenges, the Crypto Gaming Recovery Fund managed to raise approximately $500,000 in crypto tokens and assets aiming to support abandoned players. However, no major projects partnered with the fund, and some refunds for NFT purchases were processed through banks after studios failed to deliver the promised content.
