When web3 gaming first entered the spotlight, the pitch was clear and compelling. Players would finally own their digital assets. Games would be built on decentralized platforms, breaking free from corporate control. Community-driven economies would replace extractive monetization models. On paper, it sounded like the future of gaming.

But that future hasn’t arrived. What has arrived is a growing list of failed projects, abandoned communities, and disillusioned players. In the first half of 2025 alone, several major names in web3 gaming have shut down operations—Nyan Heroes. MetalCore, Tatsumeeko, Ember Sword, Blast Royale, Junglexyz, Mystery Society, and Battlebound among them— just to name a few. These weren’t obscure projects; they were heavily funded and widely promoted. And they still collapsed.

Web3 Gaming Needs a Reset

So what happened? The uncomfortable truth is that web3 gaming, as it has been pursued so far, was built on shaky foundations—more hype than substance, more financial engineering than game design. If the industry wants to survive, let alone thrive, it doesn’t just need better execution. It needs a fundamental reset.

Web3 Gaming Needs a Reset, Not a New Roadmap

The Ownership Promise Was Oversold

One of the loudest promises in web3 gaming has been the idea of digital ownership. Buy an in-game item, and you own it forever—unlike traditional games, where content is licensed rather than owned. But in practice, web3 has largely failed to deliver on this core idea. NFTs that exist off-chain, or rely on centralized game logic, are meaningless once a game shuts down. They're not assets; they’re digital IOUs that vanish with the servers.

This isn’t just a technical problem—it’s a trust problem. If players don’t truly control their assets, what exactly is web3 offering them? Unless developers commit to on-chain logic and interoperability at a foundational level, the promise of ownership will continue to ring hollow.

Web3 Gaming Needs a Reset, Not a New Roadmap

Token-First Has Done More Harm Than Good

Another major issue is how many web3 games have put tokenomics ahead of gameplay. Entire business models have been structured around launching tokens early, generating buzz, and driving speculative interest. But this approach rarely leads to sustainable games. Instead, it incentivizes short-term thinking and unsustainable economies—systems that rely on new users buying in just to keep existing users rewarded.

We’ve seen what happens when this model breaks. The collapse of Axie Infinity’s token value was a clear warning. Yet many projects still follow similar patterns, choosing fully diluted market caps and token hype over lasting value. The next phase of web3 gaming must reverse this order. Games should come first. Tokens, if they exist at all, should support player experience—not serve as a speculative asset class.

Web3 Gaming Needs a Reset, Not a New Roadmap

Regulation Not Optional for Crypto Gaming

The lack of regulatory clarity in web3 gaming hasn’t just made life harder for developers—it’s created a system that’s fragile and unpredictable for everyone involved. Too many games operate in legal gray zones, risking violations of securities laws or gambling regulations without fully understanding the consequences.

This is not a problem that will go away on its own. If web3 gaming wants to be taken seriously, it has to embrace compliance. That means building systems that account for legal realities from day one, not treating regulation as an afterthought. The rise of infrastructure providers like Genesis Engine, which aim to handle these challenges on behalf of developers, is a promising step in the right direction. But it also highlights how little progress most projects have made on this front.

Security Not a Technical Issue, But Reputational One

Security failures in web3 gaming are often seen as unfortunate but unavoidable. That mindset needs to change. Hacks, exploits, and phishing attacks don’t just hurt individual projects—they damage the credibility of the entire space. When players lose funds or accounts due to preventable issues, it reinforces the idea that web3 is unsafe and unready.

Many of these issues are avoidable. Basic practices like third-party audits, secure wallet integrations, and clear user interfaces are still lacking in far too many titles. Until these become non-negotiable, blockchain gaming will continue to face an uphill battle with public perception.

Web3 Gaming Needs a Reset, Not a New Roadmap

The User Experience Is Still Too Fragmented

For web3 gaming to reach a broader audience, it needs to stop asking players to jump through hoops just to get started. Right now, the onboarding process often includes setting up a crypto wallet, buying tokens, bridging assets across chains, and navigating unfamiliar interfaces—before ever pressing "Play." Compare that to downloading a game on Steam or a console. The contrast is stark, and it’s costing web3 games potential users. The lack of a unified, game-first platform is a glaring problem.

Investors Must Rethink Their Priorities

Venture capital has fueled web3 gaming, but not always wisely. Many funds have chased flashy projects with big promises, slick trailers, and celebrity advisors. Meanwhile, foundational infrastructure—the boring but essential work—gets ignored. The result is an ecosystem where style often trumps substance. That needs to change.

If web3 gaming is going to mature, investors need to start valuing things like compliance, security, backend reliability, and sustainable economies—not just marketable tokenomics or past résumés from AAA studios. Platforms like Genesis Engine exist not because it’s trendy, but because the space desperately needs reliable infrastructure. But projects like these will continue to struggle for funding until the broader investment mindset shifts.

Web3 Gaming Needs a Reset, Not a New Roadmap

It’s Time to Build for the Long Term

Web3 gaming isn’t dead—but the version of it built around speculation and shortcuts is. What comes next has to look different. It has to focus on games that people want to play even without financial incentives. It has to create economies that are balanced, durable, and transparent. It has to define ownership in ways that are both technically and legally meaningful. There is still real potential in the idea of players owning their digital goods. There is still value in interoperable game assets and decentralized economies. But none of these ideas can succeed if the foundation they rest on is unstable.

The industry needs less hype and more patience. Less talk of revolutions, and more talk of responsibility. This is a moment to pause, reflect, and rebuild—because continuing down the same path will only lead to more closures, more losses, and more missed opportunities. The future of web3 gaming is still unwritten. But if it’s going to work, the next chapter must be grounded in realism, not just rhetoric.