Proof of Play, a blockchain gaming studio backed by venture capital giant a16z, is shutting down. The studio said the blockchain gaming thesis it was built on simply didn't pan out. It will open-source its flagship on-chain game Pirate Nation, and an independent foundation will take over support for the PIRATE token.
Why the studio is closing
Proof of Play launched in 2022 with a vision of building fully on-chain games where players truly own their assets. The studio raised $33 million in a seed round led by a16z, with additional backing from Greenoaks and others. But the broader market for blockchain games never took off the way founders hoped. In a statement, the team said the thesis that blockchain gaming would become a mainstream category fell short of expectations. The company is winding down operations and letting go of staff.
What happens to Pirate Nation
Pirate Nation, the studio's flagship title, won't disappear entirely. Proof of Play is open-sourcing the game's code, assets, and smart contracts. That means anyone can fork the game, run their own instance, or build on top of it. The PIRATE token, which was used in the game's economy, will be handed over to an independent foundation. The foundation's job is to keep the token functional and support the community that remains. It's not clear yet how the foundation will be funded or who will run it.
a16z's gaming bet takes a hit
For a16z, the shutdown is another reminder that crypto gaming is a tough bet. The firm has backed several blockchain game studios, including Sky Mavis (Axie Infinity) and Mythical Games. Proof of Play was one of its more prominent bets on the "fully on-chain" approach. The studio's closure doesn't mean a16z is out of gaming, but it does suggest the firm's thesis on on-chain games needs recalibrating.
The state of blockchain gaming
Proof of Play's shutdown is the latest in a string of closures and pivots in the blockchain gaming space. A few big titles like Axie Infinity and Gods Unchained are still running, but many projects that raised money in 2021 and 2022 have struggled to retain players. The idea that blockchain would revolutionize gaming by giving players true ownership of in-game items hasn't translated into mass adoption. Most gamers still seem indifferent to the technology. Proof of Play's decision to open-source Pirate Nation is a pragmatic move — it lets the game live on as a community project without the overhead of a studio.
The independent foundation now holds the keys to the PIRATE token. What it does with them is the next open question.
