The YGG team does not believe that the cryptocurrency consumer market or the Web3 gaming market can recover in the short term.
Written by: Maher, Foresight News
On July 6, Yield Guild Games (YGG) announced through its official account and co-founder Gabby Dizon that it has decided to shut down its game publishing department YGG Play. The team plans to gradually take the platform and some games offline by July 31, and 35 employees will receive an additional 8 weeks of compensation. Some games, such as GIGACHADBAT, will be handed over to developer Delabs to continue operation. Others, like LOL Land and Waifu Sweeper, will be officially retired. Games published by YGG Play have generated over $9 million in revenue, contributing $876,000 in a single quarter in the first quarter of 2026.
In the statement, Gabby Dizon stated: This is a market decision, not a product decision. Although the team successfully validated the casual gaming track — short sessions, high engagement, a rapid feedback loop for crypto-native users — the lack of liquidity and declining user confidence in the macroeconomic environment rendered this business no longer commercially viable.
While shutting down YGG Play, YGG also announced a complete transformation to the AI Data Economy, aiming to capture the billions of dollars AI training dataset market, with an initial focus on building a B2B pipeline around game datasets.
Chain Game Publishing Platform YGG Play
YGG Play is YGG's Web3 game publishing arm launched in 2025, focusing on serving casual players in the cryptocurrency field. It targets quick, social, and rewarding experiences on mobile, helping independent studios quickly distribute on-chain and acquire users through YGG's community network. These games accumulated substantial revenue during the 2025-2026 period, proving that even at the end of a bear market, specific vertical tracks can still generate real payments.
However, revenue peaked around October 2025, and the large-scale liquidation events in the cryptocurrency market in October further impacted the payment willingness and retention of target users. The closure of YGG Play marks a strategic contraction from YGG's dual-driven approach of "guild operation + publishing."
To understand the weight of this closure, one must trace back YGG's complete trajectory.
In 2020, veteran in the Philippine gaming industry Gabby Dizon, Beryl Li, and anonymous partner Owl of Moistness co-founded YGG. At that time, it was the peak of the COVID-19 pandemic, and many service industry workers in the Philippines were unemployed. Axie Infinity, as the hottest Play-to-Earn (P2E) game, was allowing players to borrow Axie NFTs for free through a "scholarship" model to battle, sharing profits.
YGG seized this window, starting from small guilds, raising funds to purchase Axie assets, organizing and training players, and quickly became one of the largest and most scale-efficient guilds in the Axie ecosystem.
2021 was the peak year for YGG. Driven by the bull market and P2E narrative, the token price skyrocketed, exceeding $10 at its highest. YGG expanded from a single Axie guild into a global network, covering dozens of regional guilds and establishing partnerships with over 80 blockchain games and infrastructure projects. It not only provided asset lending but also maximized players' earnings through tasks, events, and community operations. In places like the Philippines, a real economic phenomenon of "gaming as work" appeared, and YGG was regarded as a benchmark for the P2E model.
At its peak, YGG's model was widely replicated: guilds became critical intermediaries connecting players, assets, and games, with DAO governance and token incentives allowing participants to share in growth dividends. YGG evolved from being merely an "asset manager" to an investment, content, and community platform.
The 2022 crypto bear market revealed the fragility of the Axie Infinity economic model — slowing new user inflow, crashing token prices, and serious player attrition. Guilds and P2E projects disappeared, and the industry as a whole entered a downturn. YGG did not collapse but instead began a long process of adaptation. In 2025, YGG made another strategic bet: launching YGG Play, officially entering the game publishing space, as heavily P2E practices became hard to sustain, while crypto users inherently preferred high-frequency, instant feedback casual experiences.
This halt in operations comes just a year after its last transformation.
A Microcosm of the Chain Game Industry
The closure of YGG Play can be seen as a concentrated reflection of the development trajectory of chain games over the past five years.
The crypto quantitative trading and market-making institution Caladan reviewed the trajectory of the Web3 gaming sector from enthusiastic boom to complete collapse this April, with the core conclusion: the decline of Web3 games is not a normal cyclical trough but rather due to a fundamental "structural misalignment" between its underlying speculative financial design and players' genuine entertainment needs, resulting in a brutal destruction of capital amounting to $15 billion.
Examples abound, such as Pixelmon, which raised $70 million and has not reached public testing in 4 years, Ember Sword, which burned $18 million before liquidating directly, and Hamster Kombat, which lost 96% of its users within 6 months.
As of April 2026, among approximately 3,200 chain game projects tracked in a report, 93% have been classified as "actually dead" or completely lost activity. The entire gaming sector's crypto token prices have dropped an average of 95% from their historical peaks in 2022.
The prosperity of chain games was entirely built upon the Ponzi-distribution logic of "earn while you play." This model is essentially an unsustainable speculative financial loop: the profits and token prices for early players relied entirely on a continuous influx of new players purchasing tokens or NFTs to maintain. Once new user growth slows and external capital inflow decreases, the severe inflation of tokens can quickly breach economic balance, triggering a "death spiral" of token crashes, shrinking profits, and mass user exodus.
YGG Play did not fail in product delivery or revenue numbers but lost in "market timing."
The story of chain games may be nearing its end.
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