GameFi Performance Decline in 2025: Delphi Digital Report Explains Why

Web3 Gaming Funding Drops 55% as GameFi Performance Decline in 2025

Why did crypto gaming struggle so much in 2025, even after years of hype? According to a new report by Delphi Digital, the GameFi Performance Decline became one of the clearest trends in the Web3 sector this year. Funding collapsed, big launches disappointed, and player interest faded faster than expected. However, beneath the slowdown, a quieter shift is taking place that could define the future of blockchain gaming.

Funding Data Confirms GameFi Performance Decline in 2025 

The Delphi Digital report shows a clear drop in Web3 funding. In Q1 2023, total quarterly funding was near $450 million, with deal activity above 60 deals. By Q4 2025, funding fell close to $80–90 million, and the number of deals dropped below 15.

Source: X (formerly Twitter) 

This confirms a 55%+ year-over-year decline in GameFi funding. Even during brief rebounds in early 2024, the trend never recovered. 

A smaller number of investors were willing to fund new gaming tokens, specifically after several highly anticipated launches failed to deliver strong gameplay or long-term user growth.

Why Traditional Web3 Games Lost Momentum

One of the major aspects that resulted in the GameFi Performance Decline is incentive dependence. Most Web3 games are play-to-earn games and incentive-driven. Players are attracted by token rewards. Once these rewards slow down, people quit. 

According to Delphi Digital, some projects made six or seven-figures in 2025. However, these games had limited players.

The other issue is bot traffic. Most current users are actually not actual gamers but wallets that Farm rewards. That means there is artificial engagement, and actual engagement becomes weak. Once the perks fade, engagement goes down, and that pressures developers as well as investors.

Web2.5 Games Are Quietly Gaining Strength

Despite the GameFi Performance Decline, Delphi Digital highlights the rise of this new category. These projects use blockchain only as backend infrastructure, not as the main selling point. In many cases, they do not issue tokens at all.

Studios like Fumb Games, Mythical Games, and Wemade/Wemix are generating steady revenue by using blockchain to improve ownership systems, increase engagement, or reduce platform fees. Players usually do not even notice the blockchain layer, which removes friction and enhances user experience.

Stablecoins’ Role in Blockchain Gaming

The adoption of stablecoins in gaming could assist in preventing the GameFi Performance slowdown in the coming years. The use of stablecoins makes microtransactions inexpensive and allows global payment systems and reward mechanisms without price volatility. The Web2.5 studios can harness the power of blockchain technology without having to incorporate wallets, tokens, and trading patterns on the game, attracting regular gamers who avoided previous play-to-earn models.

Conclusion

The GameFi Performance Decline in 2025 is real and backed by hard data. Funding fell sharply, deal activity collapsed, and many projects failed to hold players. However, crypto gaming is not disappearing. Instead, it is evolving. 

As Web2.5 models evolve and stablecoins improve payments, blockchain gaming may return stronger, quieter, and far more sustainable than earlier. 

Disclaimer: This article is for informational purposes only, kindly do your own research before investing in any crypto gaming projects.