Yield Guild Games is shutting down its crypto game publishing business and laying off 35 employees as it pivots away from Web3 gaming to focus on supplying data for artificial intelligence models.

The company said Monday that it will wind down YGG Play after concluding that a prolonged crypto market downturn and an equally difficult video game publishing market have made the business commercially unsustainable.

Yield Guild Games said a major market crash on Oct. 10 fundamentally changed retail investor sentiment and that it does not expect either the crypto consumer market or the Web3 game publishing sector to recover sufficiently in the near term.

Co-founder Gabby Dizon said closing YGG Play was driven by market realities rather than the quality of its products.

“Sunsetting YGG Play is a heavy decision, but it is a market decision, not a product decision. I am proud of what this team achieved under such tough conditions.”

As part of the shutdown, Yield Guild Games will close YGG Play's website, its game-launching web application and its community rewards platform, while ending marketing support for third-party titles. Browser games LOL Land and Waifu Sweeper will also be discontinued, though the Web3 versions of GIGACHADBAT and Ragnarok Breaker will continue operating.

AI becomes YGG's next growth strategy

Rather than continuing to invest in Web3 publishing, Yield Guild Games said it will redirect resources toward the AI data economy, beginning with gaming datasets that can be used to train artificial intelligence models.

The company said its global gaming community can generate valuable behavioral data simply by playing games, allowing AI systems to better understand human irrationality, decision-making and emergent behavior. It described the transition as a natural evolution of its business as demand for high-quality training data continues to grow.

Yield Guild Games said the restructuring is expected to extend its operating runway to four years. The company also reported holding $20.6 million in treasury assets at the end of the first quarter.

The move adds to a broader shift across the crypto industry, where companies are increasingly scaling back crypto-focused operations in favor of AI initiatives. More than 5,000 crypto jobs have been cut so far this year, with firms including Block, BitGo, Robinhood, Kraken, Coinbase, Gemini and Crypto.com all announcing workforce reductions, while several cited AI as an increasingly important strategic focus.