Blockchain Gaming Faces 70% Funding Fall, Pivots to Play-to-Own

- Web3 gaming funding plunges 70% in Q1 2025, signaling a major industry shock. - Industry pivots to play-to-own (P2O) to address play-to-earn (P2E) model flaws. In early 2025, the blockchain gaming industry began a critical transformation away from the unraveling play-to-earn (P2E) model, a shift highlighted in a Cointelegraph report on July 7, 2025. According to the report, funding for Web3 gaming plunged by 70% in the first quarter, accompanied by sharp decreases in player engagement and daily active wallets. The report underscores how P2E’s foundational flaws led to its demise, as the model relied on rewarding players with inherently volatile tokens that turned gaming economies into speculative ecosystems. Since players prioritized accumulating tokens over enjoying gameplay, the model became heavily dependent on a continuous inflow of external capital. As a result, this precarious structure unraveled by April 2025, with over 90% of announced blockchain games failing and daily active wallets plummeting. To salvage the industry, developers are embracing the play-to-own (P2O) model, which, unlike P2E, emphasizes tangible ownership of in-game assets. These assets, such as skins, weapons, and land, are represented as verifiably scarce NFTs that derive their value from real player utility and demand. This approach eliminates the need for the inflation-driven reward systems that destroyed the P2E economy. Consequently, developers using the P2O model are focusing on crafting immersive gameplay, implementing finite asset supplies, and incorporating economic sinks to manage inflation sustainably. Recognizing the need to move away from speculative financial models, blockchain game developers are pivoting to P2O and shifting the industry’s focus toward gameplay depth and stable asset economies. By doing so, the industry hopes to rebuild trust, foster player retention, and ensure long-term growth through more meaningful ownership opportunities. Meanwhile, according to CoinMarketCap on July 7, 2025, Ethereum (ETH) was trading at $1,712, reflecting a 3.6% decline in 24-hour trading volume.