GameFi Funding Drops 55% in 2025, Web2.5 Games Signal Shift

Source: DefiPlanet Original Title: GameFi Funding Drops 55% in 2025, Web2.5 Games Signal Shift Original Link: https://defi-planet.com/2025/12/gamefi-funding-drops-55-in-2025-web2-5-games-signal-shift/

Quick Breakdown

• Delphi Digital highlights 55%+ funding drop year-over-year, with hyped launches underdelivering on player growth.
• Web2.5 games leverage blockchain backends without tokens, prioritizing real revenue over speculation.
• Native Web3 titles hit six- to seven-figure revenues, but face bot issues, small audiences, and fading incentives.

GameFi endures funding drought in 2025

GameFi funding fell more than 55% year-over-year, caused by several high-profile launches that failed to meet expectations and eroded investor confidence. Total investments plummeted from $147 million in Q1 to near zero by year-end, as venture capital tightened amid broader crypto market volatility. Projects struggled with unsustainable play-to-earn models, where 60% player drop-off within 30 days drained liquidity and forced dozens of shutdowns across Ethereum, Solana, and Layer-2 chains. This cleanup phase weeded out weaker teams unable to cover high operational costs for on-chain games.

2025 was a rough year for GameFi. Funding is down over 55% YoY. The most anticipated launches underdelivered and enthusiasm is muted. But the overall picture is more nuanced. We are seeing the quiet rise of Web2.5 games.

Web2.5 rise challenges pure Web3 model

Despite the slump, GameFi avoids straight decline through “Web2.5 games” that embed blockchain as invisible infrastructure, skipping token issuance to focus on genuine revenue streams. Examples include FIFA’s Avalanche-based mobile title with Adidas and Play Solana’s PSG1 console, which drew traditional investment.

Native Web3 games generated six- to seven-figure revenues this year, yet player bases stayed tiny due to rampant bots, retention drops as rewards waned, and preference for familiar experiences. Market cap for GameFi shrank over two-thirds to $7 billion, with trading volume halving to $2.2 billion, underscoring the need for sustainable economics over hype.

Despite the 2025 funding slump and shift to Web2.5, institutional interest remains key. The launch of specialized labs focused on driving innovation across DeFi, GameFi, and AI signals continued long-term faith and vital support for the next generation of resilient Web3 projects.