The GameFi market continues to experience turbulence. Project Yield Guild Games (YGG) has announced the closure of its gaming division, YGG Play, and the layoff of 35 employees. The main reason is the instability of the crypto market, which has made traditional game publishing in Web3 unprofitable. The team is reallocating resources to the promising data economy sector for artificial intelligence.
According to an official statement, YGG is shutting down the YGGPlay.fun website, launchpad, and all associated games, including LOL Land and Waifu Sweeper, by August 1. Some projects, such as the Web3 versions of GIGACHADBAT and Ragnarok Breaker, will continue to exist within their own development studios.
Why YGG Play Could Not Withstand Market Pressure
The decision was made amid a prolonged bearish trend. The market correction in October last year led to the liquidation of over $19 billion in leveraged positions within a single day. Selling pressure has not eased in 2026 either: Bitcoin has repeatedly fallen below $60,000, and many leading altcoins have lost 80% or more of their value. Despite YGG Play generating $9 million in revenue in the first quarter of 2026, the market crash on October 10 fundamentally changed the behavior of retail traders. YGG directly states that it does not expect a quick recovery of markets for crypto and Web3 games to previous volumes. Under these conditions, the division cannot remain commercially viable.
New Direction: From Games to AI Datasets
YGG is betting on a more stable and long-term business. All company resources are now directed towards the data economy for artificial intelligence, starting with a B2B product based on gaming datasets. According to Grand View Research, the global AI dataset market is valued at approximately $3.9 billion, and demand for specialized data types is only beginning to grow. YGG joins a number of crypto companies that, amid the market downturn, are cutting non-core assets and shifting focus to AI development. Earlier, in May, on-chain analytics platform Dune Analytics announced a 25% staff reduction, concentrating on AI development and working with institutional data.
Expert opinion: The winding down of YGG Play is a symptomatic move for the entire GameFi industry. The market became overheated with "play-to-earn" ideas, but without a sustainable economy and real user experience, these projects proved vulnerable. YGG's transition to the AI dataset space looks pragmatic: the company is leveraging its accumulated gaming experience to create valuable data, which could become a more reliable source of revenue in current market conditions. However, the success of this strategy will depend on YGG's ability to compete in an already saturated market.