Blockchain Gaming Faces Decline: Daily Active Wallets Drop Below 5 Million in April 2025

The blockchain gaming sector experienced a significant decline in user activity during April 2025, with daily active wallets falling by 10% to just 4.8 million. This represents the lowest level of user engagement recorded this year, signaling challenges for the industry as it seeks to maintain momentum.

Blockchain Gaming’s Market Share Shrinks

According to recent data, blockchain gaming’s share within the decentralized app (dApp) industry has decreased, now accounting for 21% of the market. This is on par with decentralized finance (DeFi), while artificial intelligence (AI) projects have gained traction, capturing a 16% market share. The shifting focus highlights how competition within the Web3 ecosystem is intensifying.

Funding for Blockchain Gaming Sees a Sharp Decline

April also saw a dramatic drop in funding for blockchain gaming projects. Investments fell by nearly 70% compared to March, totaling just $21 million. This marks one of the steepest declines in recent months. Despite the downturn, some major ecosystem funds continue to support the space. For instance, Arbitrum Gaming Ventures recently deployed $10 million from its $200 million fund, backing projects such as Wildcard, XAI Network, and Proof of Play.

“Capital is harder to secure, but that’s not necessarily a bad thing. Weak projects are falling away, and funds are flowing into the builders who are quietly laying the groundwork for the next generation of blockchain games.”

Sara Gherghelas, a blockchain analyst, noted that the industry is undergoing a “reset mode,” with investors prioritizing sustainable models, player engagement, and long-term retention over token-driven hype. This shift could pave the way for more robust and enduring developments in blockchain gaming.

Major Players Still Testing Blockchain Gaming

Despite the overall decline, prominent gaming companies continue to explore blockchain opportunities. For example, Sega launched an NFT game titled “KAI: Battle of Three Kingdoms.” However, not all ventures have been successful, as Square Enix pulled the plug on its Symbiogenesis project after a lackluster performance. Ubisoft remains committed to the space, collaborating with Immutable on a blockchain-based “Might & Magic” card game slated for release later this year.

Gherghelas highlighted that major publishers are increasingly partnering with Web3-native teams for better outcomes. The focus is gradually shifting from speculative token models to delivering solid gameplay, interoperability, and meaningful user retention. This evolution suggests that the blockchain gaming industry is maturing and adapting to meet user expectations.

Key Takeaways for Investors

For those interested in the intersection of blockchain and gaming, here are some key insights from recent developments:

  • Investors are prioritizing sustainable projects with strong retention and engagement metrics.
  • Funding has become more selective, favoring projects that demonstrate long-term potential.
  • Partnerships between traditional gaming companies and Web3-native teams are becoming more common.
  • The focus is shifting from token speculation to creating immersive and engaging gaming experiences.

While the current numbers may seem discouraging, the market correction could ultimately benefit the blockchain gaming sector by weeding out weaker projects and encouraging innovation among serious developers. As the space matures, it’s likely to attract a more dedicated user base and sustainable investment.

Post Views: 10