Web3 Games Get Cancelled & Arbitrum Ventures hit the Gas

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Hello everyone! It's Kostas - welcome back to the new edition of Gaming Crypto. Today we are going to go over the activation of Arbitrum's Gaming investment initiative, and the most recent closures of web3 games.

Arbitrum Gaming Ventures makes its official debut

Arbitrum Gaming Ventures (formerly knows as Gaming Catalyst Program, GCP), is an initiative that was announced in early 2024 with 200 million ARB tokens (~$70 million).

The first round of funding, totalling around $10 million, was aimed at Wildcard, Hyve Labs, T-Rex, Xai and Proof of Play.

Wildcard is a 2v2 card action game and is the only company that wasn’t already building on Arbitrum. They also unveiled in late 2024 that they were building ThousandsTV, a streaming platform that attempts to differentiate itself by making streaming an even more interactive experience. It gives viewers, represented by digital avatars, the chance to join live games and take part in NFT giveaways.
The Wildcard team (Playful Studios) previously raised $46m in 2022 and were building on Polygon. After quietly distancing themselves from the Polygon ecosystem for some time, they had been actively seeking a new blockchain home, which they appear to have found in Arbitrum. It is safe to assume that this was the largest of the five investments, considering their move from another ecosystem.

The next three investments focus squarely on infrastructure development, with each building their own chain using Arbitrum Orbit technology:

• Hyve Labs is developing cross-platform distribution technology enabling seamless gameplay across various channels, including X, Telegram, Farcaster, and web browsers—all in real-time.

• T-Rex is pursuing a "blockchain for consumer applications" approach that bears similarities to Abstract's strategy.

• Xai, representing the most established of these three infrastructure-focused projects, has already developed and launched Raijin, an innovative rewards system specifically designed for PC games that integrates directly with players' existing Steam accounts to enhance their gaming experience.

Proof of Play, the studio responsible for Pirate Nation (a fully on-chain RPG), rounds out the investment portfolio. Their team boasts impressive credentials, led by Farmville co-creator Amitt Mahajan alongside numerous gaming industry veterans. They previously raised $33 million in 2022 in a funding round spearheaded by a16z and Greenoaks. Beyond their primary game development focus, Proof of Play has evolved into an infrastructure provider, offering their in-house solutions to power other games like Onchain Heroes and Gigaverse. They appear to be positioning themselves as the default provider for certain infrastructure tools within the Abstract ecosystem.

Overall a great debut from AGV that seems they are ramping up their activity. Web3 gaming certainly needs more of this.

Web3 Games cancellation barrage

Nyan Heroes, Rumble Kong League, Blast Royale and Tatsumeeko. What do all these games have in common?

They have announced that they are shutting down in the past two weeks (partially in the case of Tatsumeeko).

Blast Royale stands as the most developed project among these closures, having first launched in 2022. The team recently announced they will completely halt development and officially close down the game on June 30th. In an unexpected but community-friendly move, rather than simply archiving the project, the developers are taking the step of fully open-sourcing the game's code. This decision potentially allows the community or other developers to build upon their work, providing a silver lining.

Rumble Kong League had a significantly shorter market presence, having only officially released in late 2024 despite beginning development around the same time. The project made headlines when it migrated to the Ronin blockchain in early 2025, as the first game to join Ronin after it opened its gates to everyone. The move was suggested a long-term commitment to the ecosystem. However, the team appears to have abandoned the game entirely just months after this migration. Most concerning is that they did so without making any official announcement to their community, leaving players in the dark about the project's status.

Nyan Heroes has arguably faced the most significant community backlash following its closure announcement. This intense negative reaction primarily stems from the project's substantial funding history, having secured an impressive $13 million from investors. Despite this considerable financial backing and conducting four separate playtests over a two-year development period, the team ultimately announced they could not secure the additional funding necessary to reach full release. This situation has raised serious questions, yet again, about financial management in web3 gaming.

The most recent addition to this list of closures is Tatsumeeko, though their situation differs somewhat from the others. The Tatsu development team has officially announced they're discontinuing development on Tatsumeeko as it currently exists. However, unlike the other projects mentioned, they aren't exiting the space entirely. Instead, they're pivoting to a new game called Project: Wander. This new Discord-based experience aims to transform standard Discord servers into dynamic, cozy environments featuring fantasy-based life simulation elements.

Failing in web3 gaming

This recent wave of web3 game closures has sparked debate about whether these cancellations represent the normal risks of game development or indicate projects that never truly aimed to deliver quality experiences.

Indeed, we should acknowledge that there is a very high percentage of games that fail in production (even higher if we include those in preproduction). Even functional and fun games fail in competitive markets, often for external reasons.

It is also true that failures in web3 are much louder. The teams are mostly raising funds from VCs and their communities, so we can estimate their funding more accurately. This contrasts sharply with traditional publishing, where major studios can quietly shelve projects after significant investment with minimal public awareness. In many cases, traditional game cancellations happen without the public ever knowing development had begun. The resources invested in these failed projects remain largely unknown. In web3 though, teams build in public more often than not, and that amplifies both the positives and the negatives.

What frustrates most people isn’t the failed attempt, but the effort put into it. Extremely slow development cycles, little to no progress, and the desperate attempts to continue pouring funds, often from their communities, into a game that is clearly not at the level of progress it should be.

Adding to this frustration is the frequent absence of proper post-mortem analysis. Numerous teams have essentially disappeared without providing even basic explanations about why development stopped or what lessons they learned. This accountability gap represents a serious breach of trust.

Not only that, but in this latest heavy round of cancellations, we also saw a number of individual investors state that they knew the games weren’t going anywhere, but they invested anyway due to “greed”, meaning that they didn’t believe in the long-term success of the game, but they though they could capitalise early bease on the market conditions.

This pattern indicates the deeper issues within segments of the web3 investment landscape, where short-term speculation has often outweighed sustainable development practices and product quality.

🎮️ Game of the Week?

A special shoutout to Nomstead. A casual-sandbox MMO from a small indie studio that went live on Immutable. While we still don’t know much about its depth of gameplay and game economy, which are absolutely crucial in a sandbox MMO, we can, however, say that Nomstead’s art direction is truly beautiful. Looks like a true indie game, in the best way possible.

More Gaming & Web3 Stories

• Mongraal, a renowned Fortnite pro and streamer joined Opensea as their first global gaming ambassador. (Read more here)

• The Xociety Epic Games Playtest is live. (Read more here)

• YGG’s LOL Land is launching, featuring pudgy penguins’ members, May 23rd on Abstract. (Read more here)

• Netherak Demons is a new ARPG coming to Somnia. (Read more here)

• Sparkball is launching this week. (Read more here)

• Pixelmon has officially announced that their flagship game, Warden’s Ascent, will launch on Avalanche. (Read more here)

• Maplestory Universe’s NXPC token is now live.

• Hytopia mobile is now live. (Read more here)

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