Blockchain gaming promised to change how people play and earn from games. Developers said players would own their in-game items, earn real money from playing, and unlock new ways to interact with virtual economies. At first, crypto gaming looked promising. Axie Infinity and Decentraland drew headlines across the world. Venture capital flooded the space, and some players even treated crypto games as a way to make a living.

But it didn’t last. According to CoinGecko, more than 75% of Web3 games launched between 2018 and 2023 are now dead. That’s far worse than what’s seen in traditional gaming. Not everything flopped, though. Cryptocasino platforms proved to be more resilient by delivering fair games with real crypto stakes, focused on actual gameplay, and building a loyal base. These platforms found success by keeping gambling mechanics simple and transparent.

Most crypto games put the earning system ahead of the gameplay. Developers spent more time designing token models than building a game people would want to play. The result was often a trading app wearing a video game skin. Tokens came first, graphics and gameplay came second if at all.

Reddit forums are full of complaints about bad controls, repetitive loops, and games that feel more like chores than entertainment. The Blockchain Gaming Alliance found that 37% of surveyed players avoided crypto games because they just weren’t fun. ChainPlay’s research paints an even worse picture: 93% of GameFi projects shut down within four months.

Axie Infinity is a good example. It exploded when its SLP tokens had real value. Players, especially in developing countries, earn a daily income. But when the token dropped 99%, people stopped logging in. The game couldn’t survive on gameplay alone, and players were left with worthless digital assets.

Crypto gaming often leans on pyramid-like structures. Early users get big rewards, funded by those who join later. When the wave of new users slows, the system breaks. Players expecting a stable ecosystem quickly realize they’re stuck in a cycle of grinding, cashing out, and watching token prices collapse.

Axie’s “scholarship” model showed how this went wrong. Wealthy users bought assets and loaned them to players in exchange for a cut of their earnings. This turned into a system where people clicked through hours of boring gameplay just to send a slice of tokens to someone else. Once the profits dried up, both sides lost interest.

More recently, “play-to-airdrop” trends caused a different kind of problem. Players jump into games just long enough to qualify for a token giveaway, then leave as soon as they get their reward. It boosts short-term numbers but gives a false sense of growth. Investors see big user stats, but there’s no lasting engagement.

Crypto games come with a long list of requirements before anyone can even start. New players often need to set up wallets, learn how to manage seed phrases, pay gas fees, and switch between different networks. For most people, that’s too much.

Even after setup, there are delays and friction during gameplay. A player trying to trade an item or make a move might have to wait through transaction times and fluctuating fees. Traditional games don’t do this. They work as soon as you press a button. Blockchain games add steps that get in the way of the experience.

These barriers keep everyday gamers out. People don’t want to learn crypto just to play a card game. They’ll play something easier instead, with no wallets, no fees, no waiting.

Blockchain technology promises digital ownership, but bugs and security issues have cost players hundreds of millions. The Ronin bridge hack, linked to Axie Infinity, drained over $600 million. Vulcan Forged lost $140 million after attackers gained access to users’ private keys.

These events shake confidence. Many crypto games rush to launch without proper audits. When flaws get exposed, it’s the users who lose money. That undermines the whole idea of ownership. If someone can take your assets through a coding mistake, do you really own them? Players burned by security failures rarely return. They tell others that new users hesitate, and the audience shrinks.

Most countries still don’t have clear rules for crypto gaming. NFTs and tokens may fall under gambling laws, financial regulations, or both. Some governments treat in-game tokens like securities. Others see them as unregulated digital goods.

This confusion creates legal risk. Developers don’t know if their game is legal in every country. Players may face unexpected taxes or find out a game is banned where they live. Nobody wants to risk fines or penalties for playing something they don’t fully understand.

That uncertainty scares off bigger developers. No one wants to invest in building a game if the legal ground can shift underneath them.

Crypto games won’t break through by mimicking finance apps. The ones that want to have a shot should forget the tokens at first and build something worth playing. The mechanics need to be smooth, the art must look good, and the story should hold attention.

There is room for blockchain in games, but it needs to stay behind the curtain. Let players trade items freely or carry assets between games, but don’t make them learn how to stake tokens just to press play. Hide the tech and keep the rewards simple. Make the loop fun without needing a market to prop it up.

Social casino games, card battlers, fantasy sports, and skin marketplaces all show paths that could work. Start with what people already enjoy. Use crypto to support it quietly, not to carry the whole experience. If the next wave of developers treats gameplay as the product and crypto as a feature, the space still has a future. If not, players will keep spending their time elsewhere.