The cryptocurrency gaming sector is experiencing widespread shutdowns in 2025, with numerous studios closing operations or pivoting away from crypto-based models. Industry observers attribute this trend to the exhaustion of funding from previous years and challenging market conditions. Some developers are shifting focus toward artificial intelligence or adopting alternative business models such as web2 integration with NFT skins or crypto casino-style games. Concurrently, the broader crypto industry faced security challenges in May 2025, with 20 major hacks resulting in losses totaling approximately $244 million, a 39% decrease from April. Notably, decentralized finance platform Cork Protocol suffered a $12 million breach related to stablecoin and liquid staking token hedging. Recovery efforts by entities like Cetus Protocol and Sui have reclaimed about $157 million of stolen funds, representing a 71% recovery rate from a $220 million theft.