It's been a rough weekend for crypto gaming. Within 24 hours, three web3 titles: Nyan Heroes, Blast Royale, and Rumble Kong League, all officially called it quits. Together, they raised over $22 million. Now, each one is either shutting down, going open source, or simply disappearing.

It's a pattern that's becoming too familiar in this space. So where exactly did these projects go wrong? And more importantly, what can upcoming teams do better?

Web3 Game Failures: What Went Wrong?

Let's start with the games themselves.

Nyan Heroes had all the signs of a winner. With $13 million in funding, a solid dev team from Halo and Destiny, and over a million players during playtests, things looked great on paper. They even ran massive play to airdrop campaigns with millions of $NYAN tokens up for grabs. But despite that, their latest build didn't reach the player numbers they needed. Funding dried up, and no acquisition deals came through. Just like that, the game was gone. Token price dropped over 40%, and their NFTs crashed nearly 70%.

Blast Royale was next. After raising $5 million, the battle royale game struggled to scale and is now scheduled to shut down by June 30. The team is open-sourcing the codebase for community use, but the core project is officially done.

And then came Rumble Kong League. Once known for its flashy marketing and NBA star endorsement (Steph Curry), the project fizzled out. Their $FAME token launched with just 12 ETH of liquidity, according to web3 content creator StarPlatinum. Unsurprisingly, the price tanked. Community mods stopped getting paid, the team announced they were "starting from zero," and the project was reportedly sold to a company in Brazil. 

But these aren't isolated cases. According to web3 gaming creator Tr3vor, a growing list of 2025 shutdowns shows this is an industry-wide problem.

Battlebound, known for its creature collecting game Anterris, ran out of funds. The same fate hit Blade of God and Derby Race, the latter being a horse racing title. Goombles, a player-owned mobile game, was discontinued due to a lack of traction. Jungle, once aiming to be a web3 mobile gaming ecosystem, shifted their focus back to web2.

Kryptomon (KMON), a blockchain MMORPG, also paused development while seeking more funding. Loot Legends, a roguelite dungeon crawler, was shut down so that the team could focus on UGC and Hytopia. 

Champions Ascension made headlines in March when development was paused to focus resources on REACH Labs, while Valeria Studios, the team behind Land Before the War, also closed shop after funds dried up.

Even high-profile titles like MetalCore, a 3rd person PvPvE mech shooter, have gone silent. No major updates have been posted on Discord or X since March. Meanwhile, The Mystery Society, a social deduction game, couldn't secure the funding it needed. 

What do the Experts Say

If you're wondering whether this is the beginning of the end, don't panic just yet. Many insiders say this level of failure was always expected.

Slayer, COO at Wolves DAO, shared that even in web2 gaming and tech, the failure rate for startups is 95% or more. Crypto gaming adds new challenges, such as having to manage tokenomics, early monetization, and the constant threat of shifting regulations. "There's no proven playbook for success yet," she wrote, and every team is figuring it out as they go.

Nick Dekker, a content creator in web3 gaming, warned against putting all your chips on marketing. "Don't waste money on big marketing pushes too early," he said. "It means nothing if players can't stick around." He praised early playtests of Nyan Heroes but admitted that during campaign breaks, there was no reason for players to stay.

And Isidro Quintana, CEO of Triple-O Games, kept it blunt: "Web3 just puts the crash in 4K." He shared that only 0.5% of indie games in 2024 became even mildly viable, and on Steam, 67% of titles earn less than $5k lifetime. 

Overfunded and Overspent?

So what's really behind all these shutdowns?

Many believe the problem wasn't underfunding; it was actually the opposite. During the crypto bull run in 2021, VCs were handing out cash left and right. Games raised millions based on trailers, pitch decks, or hype alone. But when the market cooled, interest faded, and as a result, the user numbers didn't match the investor expectations.

As Slayer explained, you don't raise all the money up front. Most projects rely on milestone-based VC rounds. The next round might never come if traction isn't strong or the market is slow. That's when even good teams will get stuck.

How Web3 Games Can Do Better in 2025

Many believe that success in this space now comes down to one thing: data-driven decisions.

Teams can't afford to fly blind anymore. That's why tools like the PlayToEarn Business Center are becoming essential.

PlayToEarn.com is already the leading platform for web3 game discovery, with over 10 million monthly page views and 100k+ registered users. Our new Business Center gives developers everything they need to track game views by country, device, and OS, understand where users are coming from and what they want, run cost-effective ad campaigns targeting real web3 players, as well as promote their game across banners, newsletters, and trending lists. 

Instead of spending on random marketing efforts, studios can run Top Game List ads or Airdrop banners directly where players are looking for new games. Top Trending ads have shown clickthrough rates of up to 2.3%, while Airdrop banners can generate over 20,000 click to actions.

Even better, campaigns can be backed by hard data. For instance, Galaxy Fight Club saw a +500% increase in visits and +120% new site visitors after using PlayToEarn ads. 

Smart Growth Over Hype

All in all, failure might be common in web3 gaming, but it's not random.

Most of the recent shutdowns weren't due to poor ideas or lazy teams. They were the result of overspending during the wrong cycles, missed player retention goals, and lack of targeted, data-driven growth strategies.

While no specific game is to blame, the industry must adapt.

One way to do that is by using tools that offer better visibility into market trends, user interest, and campaign performance. Our PlayToEarn Business Center provides game studios with the insights and outreach to support more informed decisions and focused growth.

Sign up now to explore what it offers: https://business.playtoearn.com/register