Analyzing the journey of crypto gaming from bubble to organic growth with real players

2025.02.11

Analyzing the journey of crypto gaming from bubble to organic growth with real players

Web3 gaming is shifting from speculation-driven to user-centric and sustainable development.

2025.02.11 - 04:02:58

游戏

Navigating Web3 tides with focused insights

Web3 gaming is shifting from speculation-driven to user-centric and sustainable development.

Author: Joey @IOSG

Methodology

This research focuses on two key aspects:

Analyzing the internal structure of gaming sub-sectors;
Mapping a comprehensive landscape of mainstream projects in the current market.

To achieve this, we selected top projects with market capitalizations exceeding $50 million, along with major games that have not yet launched tokens but enjoy high visibility and community interest. Projects spanning multiple domains are categorized under the most relevant vertical.

Gaming Ecosystem Map

As of January 2025, the Web3 gaming ecosystem can be divided into three verticals: Infrastructure, Games, and Ecosystems.

#Infrastructure

Infrastructure covers the technical foundation of Web3 gaming, including development frameworks, game engines, AI tools, data management systems, and DePIN (Decentralized Physical Infrastructure Networks).

To avoid excessive layering, this classification is relatively broad. For example, the "Data" category includes both analytics platforms and in-game data ownership protocols (such as IP protocols).

#Games

This includes all playable Web3 game types, further segmented by gameplay categories. Among them, "AA+ tier games" represent higher-quality verticals.

#Ecosystems

Ecosystem projects aim to build network effects and include platforms, studios, gaming guilds, quest systems, and incubators/launchpads. Platforms primarily refer to aggregated gateways offering game distribution channels.

See the appendix at the end for specific project names.

Market Overview

Overall Trends in Web3 Gaming

#Annual Trading Volume

Although trading volume remains high, it has declined from its peak in 2022.

#Annual Funding Scale

Funding dropped sharply from $84 billion in 2021 to $5.58 billion in 2024.

2021–2022: Speculative sentiment drove capital inflows, with NFT assets, GameFi tokens, and "play-to-earn" models dominating the market, but lacking sustainable user retention.
2024–2025: Speculative funding decreased while actual player engagement increased, indicating a shift toward real gaming demand.

#Daily Active Players

User base continues to grow, with increasing adoption rates across games.

#Web3 Gaming Market Cap (CoinMarketCap data)

After excluding the abnormal peak at the end of 2021, the current market cap shows little difference compared to early levels, reflecting improved industry health:

Early stage (2021–2022): High speculation, few users, but NFT and token hype inflated market cap.
Current stage (2024–2025): Speculation has subsided, and real players now dominate the market.

Trends by Game Type

#Developer Structure

The share of independent developers is rising, mainly due to reduced VC funding and maturing development tools. As tooling improves, the number of games is expected to grow explosively.

#Project Survival Rate

Following the end of the 2023 bear market, studio and publisher interest in Web3 games has rebounded, leading to a significant increase in new releases.

Web3 Chain Dynamics

#Top Chain Performance

Immutable and Arbitrum ecosystems grew fastest over the past 12 months:

Immutable: Added 181 new games (+71% YoY), with 33% of projects migrating from Polygon.
Arbitrum: Leveraging the Orbit framework, added 119 new games (+68% YoY), including 23 chains dedicated to Web3 gaming.

#User Distribution

In terms of user base, WAX and BNB Chain still hold dominant positions.

#Migration Trends

Polygon became the chain with the highest number of departing projects, indicating intense ecosystem competition and the need for greater stability.

Smart Contract Development Environment

#EVM Dominance

81% of new game chains are still based on the Ethereum Virtual Machine (EVM), primarily because:

Development tools for non-EVM chains remain immature;
Migration costs are high.

#Developer Choice

Project teams are actively seeking better development environments, forcing ecosystems to continuously innovate to maintain competitiveness.

Conclusion

Web3 gaming is transitioning from speculation-driven to one centered on real users and sustainable development. Despite declining transaction volumes, growth in daily active users indicates industry maturation.

Infrastructure Layer: Improved tooling has attracted more independent developers, while DePIN and AI technologies further strengthen the technical foundation.
Ecosystem Competition: Immutable and Arbitrum have become primary migration destinations, while EVM-based chains continue to dominate the market.
Future challenges lie in ecosystem stability, project retention, and high-quality game development. The next phase will focus on:

Innovation;
Deeper on-chain integration;
User experience optimization.

Decentralized gaming is entering a new phase of development.

Appendix

Infrastructure

Development Tools: thirdWeb, Metaplex, Altura, Stardust, reNFT
Engines: MUD, Blade Games, Cartridge, Reflekt
AI: PlayAI, Carv, Aethir, Arc, Neural, Freysa, MomoAI
Data: Story Protocol, Helika, Chromia, Spaceport
DePIN: Deeplink, Gaimin, Shaga, Beamable, Cudos

Games

FOCG: Pirate Nation, Primordium, Alien Worlds, Downstream, Sage Labs
Speculative: Duper, RPS.live, Force Prime, Pump.fun
AA+ Tier:

Cards: Parallel, Axie Infinity, Gods Unchained, Splinterlands
Shooting: My Pet Hooligan, Shrapnel, Off the Grid, Deadrop
RPG: Metacene, Pixels, Cornucopias, Illuvium, Star Atlas, Mines of Dalarnia, Fusionist
Metaverse: Zentry, Decentraland, Sandbox, Nifty Island, Wilder World, My Neighbor Alice, Mobox, (RACA) Radio Caca
Telegram/Mini-games: Notcoin, Hamster Kombat, Catizen, Wizzwoods, WATC, StepN

Ecosystems

Gaming Guilds: YGG, Merit Circle
Platforms: B3.fun, Gala Games, Game7, SuperVerse, Bora, TreasureDAO, Myria, Ultra, Ancient8, Sonic
Studios: Nexus Interactive, Big Time, Mythos, Vulcan, Dapper Labs, Gomble, Ready Games, Playmint
Quest Systems: Perion
Incubators: Seedify, Everyrealm