Crypto MMORPG Ember Sword shuts down despite raising millions, highlighting the volatile nature of Web3 gaming projects.

A Promising Start Meets a Harsh Reality

On May 21, 2025, the Web3 gaming community was shaken by the abrupt shutdown of Ember Sword, a highly anticipated blockchain-based MMORPG developed by Bright Star Studios.

BREAKING

Crypto Game Ember Sword just announced it’s shutting down, citing funding challenges and broader market difficulties.

In 2024, Ember Sword raised more than~$7M in funding and launched its token ($EMBER) on June 13, 2024.

They sold over 40,000 virtual land NFTs,… pic.twitter.com/SBZanw0XMQ

— Abhi (@0xAbhiP) May 21, 2025

Ember Sword initially captured significant attention with its ambitious vision of a player-driven economy powered by blockchain technology. The game promised to integrate NFTs and a native token, EMBER, launched on June 13, 2024, to enable players to earn rewards through in-game activities. 

The project raised approximately $7.1 million in investor funding and secured pledges worth $203 million from 35,000 gamers for 40,000 virtual land NFTs, with $11 million realized in sales. 

This followed a successful $1.5 million land sale in May 2023, though that event faced technical challenges due to overwhelming demand.  The game also rolled out its Origins Collection NFT launch and offered early access gameplay in December 2024, fueling optimism among its community.

Read more: Top Web3 Games Are Coming to Ronin Network

However, despite the early traction, Ember Sword struggled to sustain its momentum. The team’s announcement on May 21, 2025, revealed that the project could not secure the necessary funding to continue development amid a challenging Web3 gaming landscape. As a result, game servers cease, and the official Discord channel of Ember Sword shuts down, leaving the community without updates or support.

Source: X

At least 16 GameFi Projects are Dead in 2025

The collapse of Ember Sword is not an isolated incident but rather a reflection of systemic issues within the Web3 gaming industry. A 2023 CoinGecko report highlighted that 75.5% of Web3 games launched between 2018 and 2023 failed, with an average annual failure rate of 80.8%.

Source: CoinGecko

Chainplay 2024 report analysis of 3,279 GameFi projects revealed that 93% are dead, having either dropped 95% from their all-time high or fallen below 100 daily active users, with an average lifespan of just 4 months.

Read more: Is Web3 Gaming Dead? Latest DappRadar Report Suggests Otherwise

More specifically, at least 16 web3 games are either paused, shut down, or were set to close in 2025, including: Blade of God, Metalcore, Blast Royale, Nyan Heroes, etc.

Many users label Ember Sword a “pure scam,” pointing to the rapid depletion of funds. Others criticize the tendency of Web3 projects to overpromise with “giant projects” without delivering functional games.

As a result, the price of these project tokens has no bright future. The NYAN token of Nyan Heroes has decreased by 99% in value from its ATH.

EMBER, token of Ember Sword, has crashed over 50% in the last 30 days, or down 99% from its peak on Jun 14, 2024.

The broader market context also played a role. The Web3 gaming sector has faced headwinds since the NFT boom of 2021, with declining investor interest and a tougher funding environment. While Ember Sword’s vision of blending MMORPG gameplay with blockchain technology was compelling, the project’s inability to navigate these challenges underscores the precarious nature of the industry.

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