Web3 gaming emerged with great expectations accompanying it, and gamers who were also crypto fans saw it as the next big leap in the evolution of the gaming industry. They expected a future where players would own in-game assets, earn real-world value by playing, and even shape the in-game token economy of their favorite titles. That, and a lot more, was promised thanks to the gaming’s usage of NFTs, crypto rewards, and blockchain technology.
However, the promised gaming evolution did not unfold as everyone expected it to. When Web3 gaming gained popularity, even AAA game studios like Ubisoft and EA became involved. However, by 2025, most of them had largely withdrawn. Despite the promising outlook, the experiment encountered difficulties, including a lack of interest from players, poor user experience, and mistrust toward so-called “play-to-earn” (P2E) models. It also did not help that some projects turned into gaming rug pulls, increasing the mistrust even further.
However, even though many of these projects ultimately turned out to be Web3 failures, there are a few titles that proved that crypto-native gaming might not be a pipe dream after all. Titles like Illuvium and Star Atlas have demonstrated that there is potential in blockchain games when done right.
AAA Experiments
While multiple traditional game developers tried to enter the Web3 space in its early days, Ubisoft and EA are the biggest examples. Ubisoft created a platform called Ubisoft Quartz, which was one of the first attempts by a AAA publisher to incorporate NFTs into mainstream games.
The company rolled out ghost skins for Ghost Recon Breakpoint, which were mostly cosmetic items that did not have any impact on the game. The skins were tokenized, meaning that owning a corresponding token tied to the skin made the player the owner of the skin, as well. That also allowed them to sell the token/skin or store it and claim permanent ownership.
However, this led to a massive player backlash, as Ghost Recon players saw it as nothing but a money-grab attempt. Even some of Ubisoft’s employees reportedly questioned the move, and the project was ultimately abandoned.
As for EA, its own attempt to enter Web3 and connect it to its games initially saw some success, and the company’s CEO, Andrew Wilson, said that NFTs are an important part of the industry’s future. However, after speculating about NFT integration into FIFA and Battlefield, EA decided to reverse its decision. It abandoned it rather quickly, and it has not brought up Web3 again since.
Why Did They Leave?
In Ubisoft’s case, the reason for leaving is quite apparent, but the same is true for other gaming studios. Some faced similar backlash after their attempt to mix traditional gaming and Web3, while others, who seemingly left without warning, may have foreseen similar results. Perhaps they realized that the concept, which worked out in theory, did not behave that well in practice. Continuing with it would have likely been damaging for the company’s brand, as player backlash tends to be quite loud.
Gaming communities view even regular microtransactions as exploitative. Adding NFTs, which are considered not only exploitative but still fresh and risky technology, did not sit well with many, especially when users were asked to buy a risky, uncertain asset that contributed nothing to their gameplay.
To this day, NFTs still fall under the regulatory grey zone, with no clear global rules on digital assets. Players were concerned by this, as they had no one to turn to for help if they encountered issues, and the gaming studio refused to help them. At the same time, it also concerned studios themselves, as the lack of regulatory support meant that agencies like the US SEC and EU regulators might introduce NFT-unfriendly laws in the future, effectively ruining all the games that introduced the asset.
“Too Big to Build”?
Another thing worth noting is that many Web3 gaming projects did not fail because they had a bad idea. However, they encountered issues when it came to executing that idea.
These days, AAA studios require massive budgets to develop their games, often investing hundreds of millions of dollars into a single title. On top of that, developing a proper game, which is balanced, has depth, and is well polished, takes years. Meanwhile, Web3 requires studios to roll out their games quickly and plug in the tokens. This meant that gameplay was secondary, and tokenomics played the key role.
Players wanted a good game and the ability to earn that was promised; investors wanted quick and major returns, and development teams started minting NFTs, selling land, and publishing whitepapers long before their games were out, or playable at all. It wasn’t long before everyone got burnt, the budget was gone — spent on marketing, token launches, and the like — and the game did not even exist yet.
Teams started missing milestones, breaking promises, and performing soft rug pulls as the entire projects collapsed around them. The regulators quickly doubled down due to investor complaints, further discouraging other major studios from getting involved with the sector.
Cases of Illuvium & Star Atlas
With AAA giants failing and withdrawing from Web3 in a hurry, many believed that there is no hope for the sector in which experienced developers have failed. But, this turned out to be wrong, as projects like Illuvium and Star Atlas ended up still standing as others around them folded.
The two became big names in the blockchain gaming market because they played the long game. Illuvium was created on Immutable X, which is an Ethereum Layer-2 chain. It focused on delivering scalability and gas-free transactions from the very beginning. The project separated different elements of the game, such as overworld exploration, auto-battler combat, and Zero (the land builder). It also completely ignored the hype over crypto and focused on delivering solid gameplay.
Star Atlas, on the other hand, was created on Solana’s blockchain. It also took a slow but steady approach, and it had multiple delays, which attracted some criticism. However, the project’s developers kept working and publishing bit by bit, and that kept the players interested. They released an in-browser showroom, developed DAO infrastructure, and set up real-time economy mechanics. The entire game was based on on-chain governance and asset utility instead of NFT drops, which allowed it to survive.
So, what makes their approach better than the AAA studios? Primarily, agile teams and purpose. The teams behind these two games did not chase trends. They used efficient chains to build on, they remained decentralized and community-driven, and they decided to stick to what can be done realistically in the new blockchain environment.
East vs. West
It is also worth noting that the situation played out differently in the East compared to the West. Specifically, Japanese developers, such as Square Enix, made a crucial decision to approach Web3 gaming slowly and carefully, rather than rush in like Ubisoft and EA just to pump out a game as soon as possible. In fact, they are still cautiously experimenting with NFTs as collectibles, companion apps, and lore-driven ecosystems.
One reason behind the fact that they had more success with Web3 could be attributed to cultural and market tolerance. In countries like Japan, digital ownership is not as controversial as it is in the West. Gamers are more familiar with mobile microtransactions, gacha systems, and digital item trading. To them, NFTs are a logical next step, so there was no major backlash when Square Enix’s CEO openly supported blockchain gaming in his letters to shareholders.
Other, smaller developers also started integrating NFTs, but not as speculative assets — instead, they are using them as part of the player-driven economics. In other words, the approach and intention on how to incorporate NFTs had a big impact in the East, while in the West, NFTs became associated with scams and failure.
What is next?
Web3 gaming is unlikely to go away entirely, but it won’t come through AAA studios and their future titles. Instead, experts believe it will come from smaller, indie studios as hybrid models. Like Japanese developers, these developers will have to prioritize gameplay and introduce optional NFT features that do not alienate traditional players by making NFTs an obligatory part of their gaming experience.
In other words, they have to let the players warm up to NFTs instead of forcing them into the game. Many such games are likely to shift to off-chain user experience, while blockchain works quietly in the background, and user interaction with NFTs will be masked and turned into a more traditional-looking process. For example, games might introduce cosmetics that can be minted, but if they don’t want them, players would never have to interact with them.
Indie devs and lean teams will likely lead the second wave using Layer-2 networks and modular infrastructure to make games faster and for less money. Then, over time, if all crypto and blockchain elements can be kept invisible, there may be a convergence where blockchains would run behind the scenes while players enjoy the game.
Conclusion
While Triple-A studios were among the first to jump on the Web3 trend, their approach was overly aggressive and not well thought out. Issues like community backlash, technical issues, unclear regulations, and more stood in the way of their success, and they had no choice but to swiftly retreat. Meanwhile, leaner studios that put the player and user experience first, like Star Atlas and Illuvium, succeeded where major studios failed.
Their success hints at the future of the Web3 race, showing that the loudest and richest studios won’t win the race using their traditional tactics. They will have to listen to players and avoid methods that exploit this technology for quick financial gain, such as NFT money grabs. Instead, they should view this technology as a means to enhance the games, rather than a means to generate immediate profits. As for blockchain, it will have to be treated as a tool operating in the background, and not the selling point of their projects.
Glossary
Web3 — The next version of the internet built on blockchain technology, where users can own digital assets and control their data.
Layer-2 — A secondary blockchain designed on top of a main chain; typically used to make faster, cheaper transactions.
Tokenomics — Short for “token economics,” it is a term that refers to how a project’s digital tokens are designed, distributed, and used. It often influences gameplay, provides incentive, and gives long-term value to the games and projects