After years of hype and big promises, 2025 turned out to be a rough year for GameFi. Funding dropped hard, many studios shut down, and a lot of the excitement around gaming tokens simply faded away.
New data shows that GameFi funding fell by more than 55% compared to last year. While crypto funding slowed across the board, gaming was hit much harder than most sectors. Many projects depended on token rewards to survive, and once prices fell, the money quickly dried up.
Early in the year, things still looked hopeful. GameFi projects raised over $147 million in the first quarter. But by the second quarter, funding dropped to $73 million. There was a short bounce in the third quarter, but by the end of the year, funding had almost completely disappeared. With token prices crashing, many studios ran out of cash and were forced to shut down.
Gaming tokens were some of the worst performers in crypto. The total market value of gaming tokens fell to around $6.1 billion. Many major names lost most of their value. GALA dropped more than 80%, Axie Infinity fell by over 85%, and Enjin lost nearly 90%. For many teams, their treasuries simply weren’t worth enough anymore to keep operating.
Player numbers didn’t help either. Many games lost more than half their users within the first month. Play-to-earn models often rewarded bots instead of real players, which hurt the experience and pushed people away. In just one quarter, more than 300 gaming apps shut down. Even DappRadar, a long-running analytics platform, announced it would close after seven years.
But not everything in blockchain gaming is failing.
While flashy GameFi projects struggled, a quieter shift started happening. Web2.5 games began gaining ground. These games use blockchain behind the scenes but don’t focus on tokens or speculation. Instead, they focus on making money through normal game sales, in-game purchases, and better payment systems.
Studios like Fumb Games, Mythical Games, and Wemade are still generating real revenue. They use blockchain to lower costs, improve player engagement, or add new payment options, not to sell tokens. Stablecoins are helping too, making small payments and global transactions easier without forcing players to gamble on token prices.
Even big traditional brands are testing the space carefully. FIFA moved away from Algorand and launched FIFA Rivals on Avalanche, bringing well-known partners like Adidas into the mix.
Some Web3 games are still profitable, but their communities are smaller and mostly driven by rewards. When incentives slow down, player activity often drops as well.
Many people in the industry now see 2025 as a reset year. The hype from 2021 and 2022 brought in billions, but not enough real value. Going forward, the future of gaming tokens like GALA, AXS, and ENJ may depend less on speculation and more on whether these games are actually fun to play.
