Pixelmon has ended all game development and cut its gaming team after a three-week publisher-led test failed to produce results strong enough to secure a long-term commercial offer.
Pixelmon said in an announcement on its official Discord that external publishers had spent their own marketing budgets on its games over the past three weeks, using their tools to study player acquisition and retention. The publishers did not reject the games outright, but the results were not strong enough for them to make a longer-term offer.
Instead, the publishers asked Pixelmon to polish the game further and run another test within a few weeks. Pixelmon’s leadership decided against doing so, ending a development process that it said had remained in a similar position for more than two years.
“We think we have been in this ‘not too bad but not good enough’ territory now for over 2 years,” the team said, adding that it had previously agreed internally that the publisher exercise would be the final test.
Pixelmon game development ends after final test
Following the decision, Pixelmon gave notice to all members of its gaming team last Friday and provided severance and other benefits based on the legal requirements in their respective jurisdictions.
Employees will move to what the project described as “garden leave,” serving their notice periods from home once the games have been taken offline and the related systems dismantled.
Pixelmon did not identify the external publishers involved in the latest test or disclose figures for marketing spending, player acquisition or retention. It described the exercise as an “audit of sorts,” with the publishers examining the performance of user cohorts brought into the games through paid campaigns.
The project had spent years developing games around its $NFT intellectual property. In August 2024, Pixelmon said it was preparing to showcase Warriors of Nova Thera and Hunting Grounds after conducting tests with members of its Discord community.
Earlier plans were more extensive. When Pixelmon raised fresh capital in 2024, the company was working on four games, including PixelPals, Hunting Grounds, Arena and Kevin the Adventurer.
The decision to stop development means Pixelmon will no longer pursue further polishing or testing of its existing game portfolio. A smaller group of senior and multidisciplinary staff will remain with the project while management considers businesses that do not depend on game development.
Pixelmon turns to possible non-gaming pivots
Pixelmon said the remaining group is now working on potential non-game paths for the project, with more details expected during a town hall on Thursday.
Management described the process as another attempt to find a workable business model, citing previous experiments including its Launchpool, CollectShiny and Lexium. Unlike those efforts, the new process will take place without a gaming operation or Launchpool process running alongside it.
Pixelmon’s MON Launchpool program formed part of efforts over the years to extend the project beyond its original $NFT game concept. The Pixelmon brand had previously surfaced among projects building on Coinbase’s Base network as the $NFT sector searched for new ways to bring digital collectibles into consumer applications.
The remaining team plans to discuss its approach to future pivots and progress involving AI tools at Thursday’s meeting. Management said the session will cover how the team and community will operate while those alternatives are explored.
A refund to the community is not among the options being considered. Pixelmon said the company behind the project has shareholders, including funds and financial investors that provided capital connected with acquiring the intellectual property and moving funds from the project’s original New Zealand entity.
Because of the company’s ownership structure and obligations to equity shareholders, management said a refund was not structurally possible. The remaining non-tax escrowed funds will instead be used to try to find a business model with product-market fit. If that effort fails, Pixelmon said the alternative would be to close the company.
$8 million round backed Pixelmon’s gaming plans
The decision comes more than two years after Pixelmon secured $8 million in seed financing from investors including Animoca Brands, Delphi Ventures, Foresight Ventures, Amber Group, Bing Ventures, Bitscale Capital and Cypher Capital.
Crypto.news previously reported that Pixelmon raised $8 million during a February 2024 fundraising period in which crypto startups collectively attracted hundreds of millions of dollars in venture investment.
The financing was intended to support development across Pixelmon’s portfolio of casual and mid-core games. At the time, Pixelmon was positioning itself as a decentralized gaming brand built around collectible creatures and intellectual property that could extend into different games and other media.
Its history stretches back to one of the $NFT market’s most heavily scrutinized launches. Pixelmon generated roughly $70 million from its $NFT mint in February 2022 after promoting plans for an Ethereum-based play-to-earn game. Buyers paid as much as 3 ETH for some NFTs during the primary sale.
The subsequent artwork reveal produced heavy criticism after the final 3D models differed sharply from the concept art shown before the mint. The Pixelmon $NFT artwork reveal drew complaints from holders and became one of the project’s earliest major setbacks.
Pixelmon later changed leadership and rebuilt parts of the project, including its artwork and gaming plans. Development continued through multiple titles and tests before the latest publisher exercise led management to end the gaming operation entirely.
Web3 game closures have followed years of funding
Pixelmon is not the first venture-backed blockchain gaming project to abandon a title after spending years on development.
Tatsu Works discontinued Tatsumeeko: Lumina Fates after determining that its development results did not provide enough confidence to continue the project. The Tatsumeeko game shutdown came roughly three years after the studio raised $7.5 million from investors including DeFiance Capital, Delphi Ventures and Bitkraft Ventures, with Animoca Brands and Binance Labs among other participants.
Tatsu Works said at the time that it would redirect its work toward a separate project while finding new uses for NFTs associated with Lumina Fates.
Pixelmon’s remaining team is taking a different path by removing game development from its operations while it evaluates potential business models around the assets and resources that remain.
Management said Thursday’s town hall will provide more information about potential pivots, its work on AI tools and the future operating relationship between the project team and the Pixelmon community.
