ChronoForge, a Web3 game studio that was developing a multiplayer action RPG focused on onchain asset ownership, is ceasing operations. The closure highlights the significant financial challenges confronting the Web3 gaming sector during the current market downturn, with the studio operating with a drastically reduced team for months.
The studio announced on Wednesday that all services will be terminated by December 30. The decision was attributed to "many headwinds," including a substantial funding shortfall. This deficit compelled the founders to finance development out of pocket since July, leading to an 80% reduction in staff.
In a statement shared on social media, the ChronoForge team detailed their continued operation under intense financial strain. They noted the release of patches and new features "despite no marketing budget, below sustainment revenue, loss of codevelopers and terrible Web3 gaming sentiment."
Abhishek Pawa, founder of the cryptocurrency consulting company AP Collective, commented on the closure, stating that it "reflects how difficult the Web3 gaming market has been this cycle."
ChronoForge was developed by Minted Loot Studios. The game's token and ecosystem are managed by its affiliated entity, Rift Foundation. This foundation had raised over $3 million through the sale of the RIFT token to support the game's development.
The project became active in 2022, marking its launch with its first NFT collection and initiating early community-building efforts.
GameFi's Broader Struggle and Emerging Bright Spots
The Web3 gaming sector, commonly known as GameFi, has experienced weak funding and a decline in user interest throughout much of 2025.
According to a report by ChainPlay, a blockchain gaming platform, by late last year, an estimated 93% of Web3 game projects were considered defunct. At that time, GameFi token prices had fallen 95% from their peak values.
This trend represented a significant reversal from the previous crypto bull market, which concluded in 2022 and had previously stimulated a surge in demand for GameFi projects.
Venture capital interest in the sector has also diminished due to poor returns. The ChainPlay report indicated that more than half of the venture capital firms that had invested in GameFi as of late 2024 had incurred losses.
Despite these challenges, certain areas within the sector have shown resilience. Data from DappRadar reveals that GameFi and decentralized finance were the most active sectors in Web3 during October. Gaming, specifically, accounted for nearly 28% of all decentralized application activity within that month.
