Web3 Gaming’s AAA Ambitions Are Expensive, and Projects Are Paying the Price
- The pursuit of AAA-quality in Web3 gaming is driving development budgets into the hundreds of millions.
- Many high-profile Web3 games are minimizing or making blockchain features optional in an effort to appeal to traditional gamers.
- Investment in blockchain gaming has sharply declined, leading to a wave of studio shutdowns and abandoned projects.
The Web3 gaming industry is experiencing a challenging year, marked by a steady stream of high-profile project closures due to falling funding.
This downturn follows optimistic remarks from Immutable co-founder Robbie Ferguson, predicting that 2025 would see more AAA Web3 games than all previous years combined.
However, even with reported AI-driven efficiencies, the cost of developing AAA games is becoming increasingly unsustainable, and the most ambitious Web3 projects are feeling the heat.
Growing Cost of AAA Titles
Producing a AAA title has always been expensive, but budgets have surged dramatically over the past five years.
In 2023, the U.K.’s Competition and Markets Authority (CMA) revealed that some major publishers reported development costs exceeding $1 billion for top-tier franchises.
The CMA, in a report following its initial decision to block the Activision Blizzard merger, noted that many 2024 and 2025 releases had development budgets of at least $200 million.
When factoring in marketing, these costs often balloon further.
One unnamed studio disclosed development costs of $660 million, with marketing adding another $550 million, bringing the total to over $1.2 billion.
Grand Theft Auto 6, slated for release next year, is rumored to have a development budget exceeding $2 billion.
These staggering costs raise uncomfortable questions about the viability of Web3 developers aiming to deliver AAA-quality experiences.
Web3’s Push Toward AAA
In 2025, many Web3 game developers are striving to produce games that rival the quality and scope of traditional AAA titles.
Michael Wagner, CEO and Founder of ATMTA, the team behind Star Atlas, commented in a recent CCN interview on the shift toward higher production values in Web3 gaming.
“There’s been a back-and-forth narrative between those who say Web3 just needs great games, and others who emphasize financial incentives and tokenomics,” Wagner said.
“To me, it’s the hybrid of both that makes Web3 gaming unique, the blend of immersive gameplay and financialization,” he added.
Upcoming titles like Star Atlas, The Bornless, and Illuvium showcase this trend with their high-fidelity graphics and ambitious design goals.
However, many are downplaying or sidelining blockchain features to target more traditional gamers.
The Bornless, for example, clarified on its Q&A page that it is not strictly a blockchain game and that blockchain integration is optional.
Similarly, Off The Grid, a blockchain-enabled battle royale game available on PlayStation 5, Xbox Series X, and soon Steam, has pushed its conventional gaming experience to the forefront.
Studio Closures and Falling Funding
As some developers pursue expensive AAA goals, others are folding under financial pressure.
Web3 gaming content creator Tr3vor recently shared a list of fifteen Web3 games that have either paused development or shut down entirely in 2025.
This week, Ember Sword became the latest AAA Web3 title to shut down despite having raised over $200 million from players.
The team stated they could not “secure the funding needed to continue.”
“We explored every possible way forward,” the developers said . “But in today’s market—where even some of the most promising projects are shutting down—we couldn’t find a viable path.”
This is not an isolated case. A recent DappRadar report highlighted a 71% decline in investment in the blockchain gaming sector in Q1 2025 compared to the same period in 2024.
With investor enthusiasm waning and funding scarce, the massive budgets required for AAA development are proving viable only for a select few well-funded teams.
