The second quarter of 2025 painted a sobering picture for blockchain gaming. Dozens of Web3 games shut down, funding continued its decline, and user activity dipped across the board. From overhyped MMORPGs to play-to-earn battlers, many titles simply couldn’t survive the harsh market conditions, whether due to dried-up investor backing, poor retention, or unsustainable tokenomics.
Yet, even as some doors closed, others quietly opened. Major Web2 players like Sega, Ubisoft, and FIFA doubled down on their blockchain bets, launching new projects and infrastructure partnerships. Meanwhile, top-tier games like Pixels and World of Dypians kept shipping meaningful updates, showing there’s still life and innovation in the ecosystem.
At this point, it feels like we’re all holding our breath. Waiting. Waiting for the game, the one that breaks through, hooks users, and makes the case for why on-chain gaming matters. The industry might be down, but it’s not done. And if Q2 2025 told us anything, it’s that the reset is real, but so is the buildup.
Key Takeaways
- Blockchain gaming activity dropped 17% QoQ, reaching 4.8M daily unique active wallets, the lowest since early 2023.
- Over 300 gaming dapps went inactive this quarter, 8% of all the gaming dapps listed on DappRadar, signaling a wave of project shutdowns amid funding shortfalls and low engagement.
- opBNB remained the #1 gaming chain by unique active wallets, while WAX led in gaming transactions, showing a split between user count and in-game activity depth.
- Metaverse NFT volume fell 26%, but sales count rose 54%, hinting at increased user activity despite lower valuations.
- Investments in blockchain gaming hit just $73M, down 20% from Q1 and a staggering 93% YoY, the lowest quarterly total in two years.
Table of Contents
- Blockchain gaming in Q2 2025: Is the hype cooling off?
- Top Web3 games of Q2: who’s still dominating the charts?
- Game over: Web3 titles that shut down in Q2
- The state of the metaverse: activity up, dollars down
- Web2 meets Web3: major brands enter the game
- Follow the money: Web3 gaming investments in Q2 2025
- Closing words
1. Blockchain gaming in Q2 2025: Is the hype cooling off?
In Q2 2025, the Web3 industry slowed down slightly, with daily Unique Active Wallets (dUAW) averaging 24.3 million. That’s a modest 2.5% drop from Q1. The gaming sector even took a bigger hit, with activity falling 17% QoQ to 4.8 million dUAW.
As covered in our Q2 2025 Dapp Industry Report, the gap between DeFi and gaming continues to narrow. But new narratives are quickly gaining ground. AI and Social dapps are now firmly in the spotlight, hinting at a future where AI dapps could overtake gaming in wallet activity, driven by fresh hype cycles and new user behavior. But we should not rule out the potential of a blend between AI and gaming, which could bring player-owned AI agents into virtual worlds.
In terms of gaming activity by chain, opBNB remains the most used gaming blockchain this quarter, holding its top spot for unique active wallets.
But when we look at onchain gaming transactions, the picture shifts. WAX leads by transaction count, showing it still powers a large volume of gameplay interactions. Chains like Aptos, Sei, and SKALE also show momentum, signaling where developers are building and players are active.
One notable spike: the rise of GUNZ Testnet, boosted by the buzz surrounding the extraction battle royale shooter Off the Grid, a game already gathering serious traction despite being in its testing phase. Moreover, a small part of the OTG community is already playing on Gunz mainnet, of which we do not track the data yet.
We won’t go into every chain here, but if you want to track rising stars, active games, and real-time wallet activity, hit up our Trending Gaming Page to stay plugged in.
2. Top Web3 games of Q2: who’s still dominating the charts?
In Q2 2025, the Web3 gaming landscape remained dominated by key players like World of Dypians, while others continued to gain momentum and solidify their position in the ecosystem.
Let’s break down what some of the top Web3 games and platforms delivered this quarter:
In April, the game secured $450,000 in permanent liquidity through BNB Chain’s support program, after winning two competitive rounds. Version 0.5 dropped this quarter, bringing multiplayer features and AI-powered NPCs to the game. Players can now interact with BNB Chain humanoid guides, and new social spaces like the Museum and Academy were launched to provide in-game crypto education.
The team behind OTG activated its custom GUNZ mainnet (an Avalanche subnet) in April and began the transition from testnet to mainnet. In June, they launched the “Red Ant” Battle Pass and a major update featuring the Cyberlancer weapon, magma-infused character skins, and fine-tuned gameplay. Expect faster TTK, smoother movement mechanics (jetpack slides, better extractions), and more balanced combat.
Season 3 kicked off on June 12, bringing a massive 5 million $SERAPH token reward pool (~$800K), the biggest in-game incentive to date. A new token-burning mechanic was introduced, where players collect “Soul Spars” in dungeons and burn them for access to weekly prize draws and a 200K $SERAPH season-end bonus pool.
This Web3 gaming infrastructure project gained steam in Q2. Its flagship Overtake Marketplace went into closed beta on Sui, offering peer-to-peer trading of in-game assets like accounts and items with minimal fees. While infrastructure-focused, Overtake is also publishing its own titles. Its first game, Somnis: Rumble Rush, rolled out updates addressing player feedback. The game reappeared on iOS after a brief App Store hiccup and introduced new skill systems and NFT card rebalances.
May marked a big step in Alien Worlds’ decentralization journey. The six Planetary DAOs were given control over 10% of their daily TLM mining pools (DTAP), allowing them to fund mini-games, prize events, and infrastructure directly. This move shifted the power from miners and landowners toward community-led resource allocation, with several Union DAOs already deploying funds for ecosystem growth.
Axie kept up its competitive season rhythm, with Classic Season 9 and Origins Season 13 running throughout the quarter. Meanwhile, Sky Mavis doubled down on “Atia’s Legacy”, the upcoming Axie MMO. The team sunset Project T to fully commit resources to the MMO, which had over 2.5 million pre-registrations by mid-March. In June, a summer playtest was announced, featuring open-world co-op and base-building mechanics. The full launch is expected later this year.
While relatively quiet in Q2, Alliance Games continues to build core Web3 infrastructure for game devs, including permissionless servers, decentralized storage, and AI tools. After raising $5M from Animoca Brands in late 2024, the team focused on test campaigns and infrastructure scaling.
The mobile studio converting hyper-casual hits into Web3 games continued its private beta this quarter. One standout update came to Penguin Life, where the new “Magma World” zone introduced new missions and allowed players to hatch NFT eggs for $PENG token rewards.
Beyond individual titles, Web3 gaming NFTs saw a breakthrough moment. For the first time, a gaming NFT collection outpaced BAYC and CryptoPunks in trading volume, a major milestone. Guild of Guardians remained a top choice for in-game asset collectors, while Gods Unchained held firm as the go-to for blockchain TCG fans. Editorial note, Immutable rewards $IMX stakers with trading activity by airdropping periodical rewards, which could inflate the numbers of both Gods Unchained and Guild of Guardians.
3. Game over: Web3 titles that shut down in Q2 2025
Even as new games enter the space, Q2 2025 was marked by a notable wave of Web3 gaming shutdowns. From ambitious MMORPGs to casual mobile battlers, a mix of high-profile and mid-tier projects were forced to halt development, mostly due to funding issues, low retention, or strategic pivots toward newer trends like AI.
According to DappRadar data, while there were around 300 active gaming dapps in Q1 2025, these same projects showed no on-chain activity, neither transactions nor unique wallets, in Q2. This drop in activity could be attributed to several factors: some dapps may have shut down, others might have migrated to blockchains we don’t currently track, or simply failed to update their smart contracts, resulting in no recorded on-chain activity.That’s a stark reminder of how quickly things can turn in a still-maturing industry.
Here are the most notable closures:
Once hailed as the next-gen MMORPG on Ethereum (later Polygon and then Immutable zkEVM), Ember Sword officially shut down in May. Despite early hype and $200M+ in land sale pledges, developer Bright Star Studios couldn’t secure further funding. The game had struggled for traction amid delays, chain migrations, and gameplay criticisms. Its shutdown is a cautionary tale for overpromised metaverse visions.
The mech-cat shooter on Solana with a 250K+ wishlist ended development in May after failing to raise capital. The $NYAN token collapsed over 99%, and the team at 9 Lives Interactive admitted the play-to-earn model couldn’t sustain itself in the current climate. A potential buyout of their IP is on the table.
An MMORPG born from the Treasure DAO ecosystem, Alurya was placed on indefinite hold after a promised grant was pulled. Having just migrated to Ronin, the game is now offline. It’s another example of how strategic shifts by platform backers (in this case, Treasure focusing on AI) can leave dependent projects stranded.
Despite its strong IP, Gala Games’ zombie MMO based on AMC’s The Walking Dead will be playable only until July 31, 2025. Player retention remained weak despite early NFT land sales. Gala is offering “mystery boxes” from other games as partial compensation.
The Polygon/Base mobile battle royale shut down in late June. Devs said they explored every option before pulling the plug. The project open-sourced its code, encouraging the community to keep it alive post-shutdown. Meanwhile, the token ecosystem $MCG and $NOOB collapsed >99%.
🪦 Mojo Melee
Planet Mojo’s auto-battler will sunset on July 1, 2025 as the team pivots from Web3 gaming to an AI-powered movie-making platform. This is part of a wider trend of studios rebranding or shifting toward newer narratives like AI, especially as play-to-earn fatigue sets in.
Square Enix’s Ethereum-based storytelling NFT game will conclude on July 15, per its original design. While technically not a shutdown, the game ends with low engagement and without plans for future expansion, despite a late attempt to crossover with Sony’s new L2 Soneium.
All in, Q2 2025 confirmed a brutal truth: the exuberance of 2021–2022 has faded, and Web3 gaming is now in survival mode. Common themes across these shutdowns:
- Lack of sustainable funding
- Weak product-market fit
- Insufficient long-term player engagement
Some teams are now exploring mergers, IP sales, or open-sourcing their codebases to salvage value. Others are exiting Web3 altogether.
The play-to-earn reset is real, and only the most adaptable teams will weather the bear.
4. The state of the metaverse: activity up, dollars down
The metaverse sector continues to mirror broader NFT market trends. According to our Q2 2025 Dapp Industry Report, trading volume for metaverse NFTs dropped 26% quarter-over-quarter, while sales count actually climbed 54%, a clear sign of lower average prices but more users engaging with these assets.
Looking at the top-traded NFT collections this quarter, several metaverse-focused projects maintained strong secondary market activity:
Here’s what some of the leading projects were up to in Q2:
Animoca Brands’ Moca Foundation introduced Moca Chain, a new Layer-1 blockchain designed for self-sovereign identity and data ownership. MOCA Coin will power the chain’s ecosystem, covering gas, storage, staking, and data fees. Testnet is expected in Q3, with mainnet slated for Q4 2025. This is a big move toward building an open metaverse infrastructure.
Yuga Labs rolled out the persistent version of Otherside, finally letting Otherdeed holders explore the metaverse 24/7, far beyond the earlier “Trip” demos. As of late June, players (Voyagers) can freely access areas like:
- BAYC Swamp
- Meebits’ Meetropolis
- Kodas’ Nexus
This marks a major step toward Yuga’s long-term metaverse vision actually going live.
🌾 Pixels
Pixels refocused in Q2, shifting from hyper-growth to deepening gameplay and economic sustainability. April brought a major strategic update (Chapter 3), emphasizing:
- Relaxed farming
- Social play
- Player progression
The team also teased Pixels Pals, a Tamagotchi-style mobile game launching Summer 2025, aimed at expanding the Pixels universe and onboarding casual users.
Alpha Season 5 launched in late March and ran through mid-May, featuring 40+ new experiences built by Sandbox and its partners, making it one of the platform’s largest seasonal drops to date. The team also began prepping for Season 6, which includes major brand activations like Cirque du Soleil and new monetization tools for creators.
Yes, metaverse NFT trading volume is down, but the builders aren’t stopping. From Yuga’s persistent world to Moca Chain’s infrastructure pivot, leading projects are continuing to ship updates and develop new entry points, particularly in identity, gaming, and mobile.
This is less about speculation and more about foundational progress.
5. Web2 meets Web3: major brands enter the game
Web2 isn’t just watching Web3 from the sidelines anymore. In Q2 2025, several major brands and gaming giants took significant steps into blockchain gaming and the metaverse, some launching their first-ever Web3 titles, others doubling down on previous efforts.
Let’s break down who did what:
🎮 Sega
The Japanese gaming titan launched its Web3 game with KAI: Battle of Three Kingdoms, released on April 30. Co-developed with double jump.tokyo and running on the Oasys blockchain, the game reimagines Sega’s classic Sangokushi Taisen arcade series into a strategic card battler with NFT integration. It’s a bold move, blending legacy IP with Web3 ownership mechanics.
🎮 Ubisoft
Ubisoft introduced Might & Magic: Fates, a free-to-play NFT card battler built on Immutable’s zkEVM. Announced in April, the game brings a trusted franchise into the blockchain space after years of Web3 experimentation by Ubisoft (remember Champions Tactics?). Launching winter 2025 on mobile and PC, this partnership with Immutable highlights Ubisoft’s continued push to bridge traditional gaming and blockchain.
🎮 Netmarble / MarbleX
Korea’s Netmarble is going full Web3 with its dedicated MarbleX division, revealing a 2025 roadmap packed with seven new blockchain games across RPG, sim, and MMORPG genres, all powered by Immutable. Two titles dropped in Q2. To sweeten the deal, MarbleX and Immutable announced a $20M ecosystem fund, aimed at onboarding developers and pushing their “fun comes first” mantra. This is real firepower in Web3 content production.
🎪 Cirque du Soleil x The Sandbox
In June, The Sandbox teamed up with Cirque du Soleil to bring the iconic live entertainment brand into the metaverse. First up? A voxel version of “Luzia”, part of Alpha Season 6, featuring mini-games and digital collectibles. It’s one of the most creative crossovers yet, combining immersive circus art with gamified virtual worlds.
⚽ FIFA x Mythical Games
Football fans got their first real taste of Web3 this quarter with the launch of FIFA Rivals by Mythical Games. It’s a mobile-first soccer title powered by Mythical’s proprietary chain and features an NFT-based player building mechanic. Players collect “fragments” to assemble superstar cards, with the first Lionel Messi NFT selling for $11,200. This marks FIFA’s first major Web3 play, and it’s targeting a massive global audience.
🎮MapleStory N
It is developed by gaming giant Nexon, officially launched in May 2025 on Avalanche’s Henesys subnet, making it one of the most prominent Web2-to-Web3 transitions this year. The MMORPG saw a rapid surge in activity, minting over 1.7 million NFTs and pushing Avalanche daily transactions above 1 million multiple times. Early marketplace action was intense, with some items trading for as much as $18,000, and the NXPC token spiking before correcting by more than 60%. While initial hype drove massive traction, activity has since started to normalize, with on-chain metrics and trading volumes gradually stabilizing.
These moves prove that mainstream adoption isn’t just about hype anymore, it’s about IP leverage, real infrastructure partnerships, and creative monetization via NFTs and in-game economies. Whether it’s Ubisoft’s zkEVM strategy, Netmarble’s multi-game roadmap, or Cirque’s artistic metaverse expansion, Web2 brands are getting smarter about Web3.
It’s not just about being early, it’s about showing up with something people actually want to play.
6. Follow the money: Web3 gaming investments in Q2 2025
The investment landscape in blockchain gaming and the metaverse continues to struggle. In Q2 2025, the sector raised only $73 million, down 20% from Q1 and a steep 93% drop compared to Q2 2024.
This quarter confirms what we’ve been seeing all year: funding is drying up. Between the tight macroeconomic climate, shaky political dynamics, and lingering risk-off sentiment across most sectors, Web3 gaming is feeling the crunch. And as always, this niche, still building its way out of the 2022–2023 hype cycle, is more exposed than others.
That said, it’s worth remembering: good games take time. Many projects that secured funding in 2021 or 2022 are still deep in development. So while the charts might look grim, that doesn’t mean builders have left the room. It all comes down to building quality games, and managing the budget to actually finish it.
One trend stands out this quarter: most of the capital flowed into infrastructure. Specifically, 74.8% of Q2 funding went to infrastructure plays, while the rest went to actual Web3 game studios. It’s clear that investors are betting on the picks-and-shovels layer before the next breakout game appears.
Here are the top three deals of Q2 2025:
1. Ultra – $12M Raised
Based in Luxembourg, Ultra secured $12 million in a round led by NOIA Capital. The funding will help expand its team and continue building out its publishing and distribution platform, designed to reshape how games are played, owned, and monetized on-chain.
2. MagicBlock – $7.5M Raised
MagicBlock, a real-time engine built for decentralized applications on Solana, raised $7.5 million in seed funding. The goal? Enable devs to build fully on-chain, low-latency games without relying on Layer 2 solutions. It’s one of the more promising infrastructure bets this quarter.
3. Cooking.City – $7M Raised
Solana-powered Cooking.City closed a $7 million round. The game blends a token issuance platform with a mobile cooking sim, think NFTs meets time-management gameplay, backed by MagicSeven Co., Ltd. Players compete across themed restaurants in live events like Dinner Peak and World Chef Leaderboard.
One thing worth flagging: two of the top three raises this quarter were Solana-based. That’s a signal. Investors appear to be leaning toward Solana’s high-speed, low-cost infrastructure, especially for gaming use cases where real-time performance matters.
7. Closing words
Q2 2025 wasn’t bullish for blockchain gaming by any stretch. Activity dropped, funding dried up, and several high-profile projects hit the shutdown button. But beneath the surface, builders kept building. From Solana-native infra plays to legacy brands like Sega and FIFA stepping into Web3, the groundwork for the next wave is being laid right now. And while AI dapps may be stealing some of the spotlight, gaming still holds a unique place in onboarding users, testing on-chain mechanics, and pushing the limits of open economies.
The bear isn’t over. But neither is the game.
