GameFi funding has plummeted 55% in one year. With the rise of Web 2.5 games, do GALA, AXS, ENJ still have a chance to turn things around?

After experiencing multiple cycles of highlights, the GameFi sector faced a cliff-like cooling in 2025. Data shows that the total funding for GameFi dropped by approximately 55% year-over-year, with many projects forced to shut down due to funding shortages and incentive failures. This change not only exposes the structural flaws of traditional GameFi token models but also drives the industry toward a Web 2.5 gaming model centered on profitability.

According to a Delphi Digital report, GameFi funding was still at 147 million USD in the first quarter, but rapidly declined to 73 million USD in the second quarter. After a brief rebound in the third quarter, it nearly stagnated by the end of the year. CoinGecko data indicates that the total market cap of gaming tokens is about 6.1 billion USD, generally retracing 70% to 95% from its peak. Among them, GALA, Axie Infinity (AXS), and Enjin (ENJ) each fell more than 80% year-to-date.

Low user retention further amplified the impact. Many “Play to Earn” mechanisms, severely affected by inflation, are dominated by bots and arbitrageurs, with a 60% user loss within 30 days becoming the norm. In the second quarter alone, over 300 gaming dApps ceased operations, and DappRadar also announced the end of its services.

Meanwhile, Web 2.5 games are beginning to attract attention. These projects use blockchain as a foundational tool rather than a core selling point, weakening or completely abandoning tokens, and focusing more on cash flow and user experience. Teams like Fumb Games, Mythical Games, and Wemade are leveraging blockchain to improve payment efficiency, expand stablecoin micro-payments, and enable global monetization. FIFA also launched a new game based on Avalanche, demonstrating that traditional brands are entering the crypto gaming space more cautiously.

Industry experts generally believe that 2025 will be a necessary adjustment period for GameFi. Whether tokens like GALA, AXS, and ENJ can rebound depends not on speculative return but on whether the industry can truly produce “games that people are willing to play long-term.”