These days, when you look at the web3 gaming market, a truly fascinating phenomenon is taking place. On one side, attention is reigniting with Nexon’s MapleStoryN launch, but on the other side, well-known projects are shutting down one after another.

There have been many truly shocking cases this year. Projects such as Tatsumiko, Nyan Heroes, and Blast Royal announced that development has been halted. In particular, Ember Sword raised more than $200 million and then suddenly closed its doors. When gameplay test videos were released, players’ reactions were along the lines of, “Is this a game from 1995?”

The problem is that this is not just a series of individual failures. According to CoinGecko analysis, the average failure rate of web3 games is 80% or higher, and ChainPlay’s research found that 93% of projects were discontinued. There are also statistics showing that GameFi projects last an average of only 4 months.

But what’s surprising is that this isn’t only a problem unique to web3 games. Traditional games also have a high closure rate, with 83% of mobile games shutting down within 3 years. In other words, the gaming industry itself already has a high failure rate.

So why are web3 games especially struggling? Funding is the core issue. In Q1 2025, investment in web3 games fell by 68% compared with the same period last year. Developers can’t keep projects going because they’re unable to secure follow-up funding rounds.

A more fundamental problem is user retention. At first, players are lured in with airdrops and token incentives, but once tokens are issued and rewards end, most people leave. This causes token prices to crash and creates a vicious cycle. The Nyan Heroes token plunged 40% on the day the shutdown was announced, and it is now down by 98% or more compared with its all-time high.

Another shocking point is that the core promise of web3 games—“players own their in-game assets”—doesn’t actually work in practice. Even assets registered as NFTs become essentially useless once the game ends. They remain on the blockchain, but their practical value becomes 0. What’s more, the concept of “interoperability” ultimately proved to be nothing more than a dream. What would an RPG character be good for in an FPS game?

For investors, web3 games are even more painful. Traditional game crowdfunding is generally about purchasing a copy of the game, whereas in web3 you’re directly buying real assets and tokens. When a project fails, the losses are much larger and far more direct.

So how can web3 games survive? Industry experts are clear: it’s not “token and NFT first,” but securing the quality of the game itself first. If the game is fun, players will come—and only then can a sustainable economic model be built.

Given the situation web3 games are facing right now, the urgent priority is to return to the basics rather than chase technical innovation. What’s needed at this point is transparent fund management, genuine game fun, and above all, restoring players’ trust.