GameFi funding volume drops over 55%, how Web2.5 games can break through becomes the focus

2025 marks a profound period of self-reflection for the crypto gaming industry. According to the latest analysis from renowned research firm Delphi Digital, the overall funding volume in the GameFi sector has significantly declined this year, with a drop of over 55% year-over-year.

Some highly anticipated projects have underperformed after launch, and market enthusiasm has noticeably cooled.

Meanwhile, a hybrid mode game called “Web2.5” is quietly emerging, redefining the way blockchain and gaming are integrated.

01 Industry Shift: Funding Winter and Narrative Transformation

The crypto gaming market stands at a critical crossroads. Over the past few years, the “Play-to-Earn” model has ignited enthusiasm among countless players but has also faced widespread skepticism due to the unsustainability of its economic models.

Now, data clearly reveals a shift in the industry. Delphi Digital’s report indicates that funding activity in the GameFi sector experienced a significant slowdown in 2025.

Compared to the same period last year, total funding has decreased by over 55%, showing that investors are becoming more cautious and rational about this sector.

This change does not mean the end of gaming but is a necessary step toward industry maturity after a period of frenzy. During the previous bull market, large amounts of capital flooded into GameFi, leading to many projects centered on token economies but with weak gameplay.

As market enthusiasm waned, the problems of these projects became apparent: low player retention, and once incentives decreased, active user numbers plummeted.

02 Breakthroughs: The Rise of Web2.5 Games

While traditional Web3 games are still seeking sustainable models, a new force has begun to demonstrate its potential.

Web2.5 games—this emerging concept is gradually becoming a focal point of industry discussion. Unlike traditional Web3 games, they view blockchain primarily as a core infrastructure tool rather than a marketing or fundraising gimmick.

The core of the Web2.5 model is balance. It retains the emphasis on product quality, user experience, and sustainable business models typical of Web2 games, while cleverly integrating blockchain technology (Web3) to enhance asset ownership, transparency, and new monetization channels.

Studios like Fumb Games, Mythical Games, and Wemade / Wemix exemplify this approach. They generate substantial revenue without forcing users into token speculation.

03 Mode Comparison: Traditional GameFi vs. New Pathways

To understand the advantages of Web2.5, it’s important to compare it with native Web3 games. Traditional Web3 or GameFi projects often rely heavily on tokenomics and speculative incentives to attract users.

According to Delphi Digital’s observations, while these games can generate millions of dollars in revenue, their player base remains relatively small, and their user composition often includes many bots.

Once incentives dry up, the fun provided by the game itself is usually insufficient to retain users.

In contrast, Web2.5 games take a different approach. They typically skip complex token designs and instead compete based on genuine product experience and revenue-generating capabilities.

They utilize blockchain technology with more pragmatic goals: improving operational profits, increasing user engagement, or opening new revenue streams, rather than building fragile “Ponzi” economic models that depend on continuous new user influx.

The table below clearly contrasts the core differences between these two modes:

04 Future Outlook: Infrastructure and Trend Integration

The rise of Web2.5 games is not an isolated phenomenon; it is closely linked to the maturation of crypto infrastructure and industry development trends. The further adoption of stablecoins is seen as a key accelerant.

Stablecoins provide efficient, low-cost solutions for small in-game payments, global creator revenue settlements, and user engagement rewards.

Beyond payments, the improvement of Blockchain-as-a-Service (BaaS) modules allows traditional game developers to easily integrate wallet functions, NFT minting, or asset trading—similar to calling cloud services—without building complex blockchain architectures from scratch. This significantly lowers the technical barriers for top-tier teams to enter the Web3 space.

Industry analysts also point out that future successful projects in the gaming sector are likely to emerge at the intersection of AI and blockchain gaming, or those capable of attracting mainstream Web2 users through high-quality production and sound economic design.

The market has grown weary of pure token speculation models and increasingly demands engaging, sustainable digital experiences.

05 Investor Perspective: Opportunities in the New Ecosystem

For investors focusing on the gaming sector on platforms like Gate, the current market environment requires sharper insights and more rigorous analysis frameworks. Amid the overall cooling of GameFi funding, identifying truly promising projects becomes especially critical.

Investors should prioritize projects with teams that possess both successful traditional gaming experience and a solid understanding of blockchain technology. Such teams are more likely to develop engaging Web2.5 products with healthy economic models.

When evaluating a project’s tokenomics, be wary of designs with unclear inflation mechanisms or those overly reliant on new capital inflows. Sustainable models should focus on value creation through in-game consumption, empowering scarce assets, or sharing genuine platform revenue.

On the Gate platform, you can easily track the performance of related game assets. As of December 30, 2025, blockchain tokens closely tied to the gaming ecosystem, such as SOL, are priced at $122.79, and tokens of established GameFi projects like AXS are also available for real-time analysis.

This indicates that despite industry adjustments, the market still maintains interest and liquidity in leading projects and core infrastructure.

Future Outlook

The world of blockchain gaming has never stopped evolving. As the hype around GameFi gradually subsides, explorers like Wemade and Mythical Games are attempting to build a solid bridge between the vibrant Web2 world and the decentralized Web3 ideal.

They focus not on disruption but on solving concrete problems: how to use blockchain technology to increase profits, and how to make it easier for global players to trade virtual items.

This transformation is driven not by slogans but by real users and sustainable revenue streams quietly propelling progress.