I Dismissed Web3 Gaming as Dead — and I Was Wrong
Throughout most of 2023, I mocked GameFi at every opportunity. Axie Infinity had collapsed from a $9 billion market cap to irrelevance. StepN’s move-to-earn model had imploded. Every “play-to-earn” project I had touched resulted in losses. I wrote off the entire sector as a failed experiment that mistakenly assumed financial incentives could substitute for genuine game quality. I was partly right — the 2021-2022 GameFi model was fundamentally broken. But I was also dangerously wrong about the sector’s future, because while I was not paying attention, a new generation of Web3 gaming infrastructure emerged that bears almost no resemblance to the Axie era. I started paying attention again in mid-2025 when I noticed that Immutable’s gaming chain was processing more daily transactions than Arbitrum, and that Ronin had quietly rebuilt its ecosystem with games that people actually play for fun rather than for token farming.
The Web3 gaming market generated approximately $7.2 billion in on-chain transaction volume in 2025, according to DappRadar’s annual report. That is down from the $25 billion peak in 2021, but the composition is entirely different. In 2021, over 80% of GameFi volume was speculative token trading and NFT flipping with minimal actual gameplay. In 2025, approximately 55% of volume was in-game transactions (item purchases, crafting, marketplace trades) from users who play the games regularly. The daily unique active wallets across Web3 gaming exceeded 4.2 million in January 2026 — not far off the 2021 peak of 5.8 million, but with dramatically better retention metrics. Average 30-day user retention in top Web3 games is now 34%, up from a dismal 8% in 2022. For context, top mobile games in traditional gaming average 25-40% 30-day retention. Web3 games are approaching parity with their Web2 counterparts on the metric that matters most: do players keep coming back?
Immutable: The Gaming-First Blockchain That Is Actually Working
Immutable has positioned itself as the infrastructure layer for Web3 gaming, and the strategy is paying off. The Immutable zkEVM (built in partnership with Polygon) launched in early 2024 and now hosts over 280 games in various stages of development, with approximately 45 in live playable state. The chain processes 1.8-2.2 million daily transactions, making it one of the most active rollups in the entire Ethereum ecosystem. The gas cost for game transactions is effectively zero — Immutable subsidizes gas fees for approved game contracts, meaning players never have to think about transaction costs. This single design decision removes one of the biggest friction points that killed earlier GameFi projects.
The flagship titles on Immutable are what convinced me the platform has legs. Gods Unchained, the trading card game that Immutable originally built its reputation on, still maintains 25,000-35,000 daily active players after three years — exceptional longevity for a crypto-native game. Illuvium, an open-world RPG with AAA production values, launched its full version in Q3 2025 and peaked at 89,000 concurrent players during its first month. Guild of Guardians, a mobile action RPG, has accumulated 2.1 million downloads with healthy daily active user numbers around 120,000. These are not vanity metrics — they represent real people spending real time playing these games because the games are genuinely entertaining.
Immutable’s IMX token ($0.78, market cap $1.2 billion) has declined from its 2024 high of $3.60 but stabilized in the $0.65-0.90 range over the past three months. The token is used for staking (currently offering 5.8% APY), governance, and as the primary marketplace currency for NFT trades across the ecosystem. My position in IMX is one of my higher-conviction altcoin bets: I hold approximately $3,400 worth, accumulated between $0.60 and $0.85. The thesis is simple — if Web3 gaming takes even 2-3% market share from the $180 billion traditional gaming industry, the infrastructure layer that hosts the games captures enormous value. Immutable is currently the leader in that race.
Ronin: The Post-Hack Redemption Story
Ronin’s story is one of the most remarkable comebacks in crypto. After the devastating $620 million hack in March 2022, most analysts wrote off the chain as permanently damaged. The brand was toxic. Users fled. Axie Infinity’s player count collapsed from 2.8 million daily actives to under 50,000. Sky Mavis, the company behind Ronin, could have folded. Instead, they rebuilt the validator set, implemented a new proof-of-authority consensus with more validators, repaid all affected users (using a combination of their own treasury and a $150 million round led by Binance), and — most importantly — diversified the ecosystem beyond Axie Infinity.
The Ronin ecosystem in 2026 looks nothing like the Axie-dependent monoculture of 2021. Pixels, a farming game with retro pixel art aesthetics, is now Ronin’s highest-volume game with 380,000 daily active wallets. Kaidro, an anime-inspired RPG, launched in late 2025 and immediately attracted 85,000 players. Wild Forest, a real-time strategy game, maintains a dedicated community of 45,000 daily users. The Mavis Marketplace processes approximately $2.8 million in daily NFT volume across all Ronin games. Total daily transactions on Ronin average 1.4 million — healthy activity for a gaming-focused chain.
The RON token ($0.52, market cap $580 million) is used for gas payments and staking on the Ronin network. Gas costs are negligible (typically under $0.005 per transaction), and RON staking yields approximately 7.2% APY. I hold a small RON position ($1,200) primarily as exposure to the Pixels ecosystem, which I believe has the strongest community engagement metrics of any Web3 game. The risk with Ronin is concentration: Sky Mavis controls the core infrastructure, and the chain’s success depends heavily on their continued execution. The hack recovery proved their operational resilience, but it also demonstrated the risks of a chain controlled by a single entity.
BEAM: The Merit Circle Rebrand That Changed Everything
BEAM (formerly Merit Circle) represents the most interesting pivot in Web3 gaming. Merit Circle started as a GameFi guild — essentially an organization that recruited players, lent them NFTs (primarily Axie characters), and took a share of their earnings. When the play-to-earn model collapsed, Merit Circle’s guild operations became unprofitable. Rather than dying, the DAO voted to pivot completely: they shut down guild operations, rebranded to BEAM, and built a dedicated gaming chain using Avalanche’s subnet technology. The BEAM chain launched in mid-2024, and the transition from a failed guild to a successful gaming infrastructure provider is one of the smartest strategic moves I have seen in crypto.
The BEAM chain currently hosts approximately 35 games with 15 in live playable state. The standout titles include Sphere (an open-world survival game), Castle of Blackwater (a social deduction game with 28,000 daily players), and several indie titles that chose BEAM for its gaming-optimized infrastructure. The chain processes roughly 600,000 daily transactions — smaller than Immutable or Ronin, but growing at approximately 15% month-over-month, the fastest growth rate among gaming chains. BEAM’s SDK and developer tools are specifically designed for game studios, offering features like gasless transactions, session keys (so players do not have to approve every in-game action), and a built-in marketplace for NFT trading.
The BEAM token ($0.012, market cap $570 million) is the network gas token and has appreciated approximately 180% from its 2024 lows. The BEAM DAO treasury holds approximately $85 million in diversified assets (ETH, stablecoins, gaming tokens), providing a financial runway that most gaming chains lack. I hold approximately $800 in BEAM tokens, making it a small but speculative position. The bull case for BEAM is that it captures a meaningful segment of indie game developers who want blockchain-native features without building on large, expensive ecosystems. The bear case is that with Immutable’s head start and Ronin’s name recognition, BEAM may struggle to attract the volume of games needed to achieve network effects.
How I Am Playing the GameFi Revival
My total GameFi allocation is approximately $5,400, representing about 4% of my crypto portfolio. The distribution is: IMX ($3,400), RON ($1,200), BEAM ($800). I also hold small amounts of in-game tokens and NFTs across Gods Unchained, Pixels, and Illuvium, worth approximately $600 combined. This is deliberately a smaller allocation than my positions in DeFi or Layer 2 infrastructure because GameFi carries unique risks: game quality is subjective and hard to predict, player retention depends on continuous content updates, and the token economic models are still evolving. A game that loses its player base can see its token and NFTs go to zero much faster than a DeFi protocol with real TVL.
My thesis for 2026-2027 is that we are entering the “second wave” of Web3 gaming, driven by three factors. First, several AAA-quality games built by studios with traditional gaming experience are scheduled to launch in 2026 (including highly anticipated titles on Immutable and Epic Games Store partnerships). Second, the infrastructure layer (gasless transactions, account abstraction, invisible wallets) has matured to the point where players do not need to understand crypto to play Web3 games — the blockchain becomes invisible plumbing rather than a visible barrier. Third, the move from play-to-earn to play-and-earn (where earning is a bonus rather than the primary motivation) creates sustainable economic models that do not depend on new player inflows to pay existing players.
The downside risk is that Web3 gaming remains a niche within a niche. If traditional gaming studios (EA, Activision, Ubisoft) continue avoiding blockchain integration, the total addressable market for Web3 games stays small. I manage this risk through position sizing — losing the entire $5,400 allocation would be painful but not portfolio-damaging. For investors who want crypto exposure without the game-specific risks of GameFi tokens, Ethereum staking provides more predictable returns backed by the security of the entire Ethereum network rather than the success of individual game titles. And for active traders who prefer capturing momentum across all crypto sectors including gaming tokens, systematic DeFi strategies offer diversified yield generation that does not depend on any single narrative thesis.