[Edit: A former spokesperson wanted to clarify that the funding numbers reflect closer to 11 million from land sales rather than 200 million, with nearly 8 million from initial funding rounds. The article has been changed to reflect this]

Now that Bright Star Studios has gone belly-up, there are certainly a lot of questions around what happened. The premier Web3 NFT game that promised a game-first approach with a primarily cosmetic cash shop, community-built worlds, and a purely player-driven economy with contributor kickbacks has placed its last two Ember tokens on the eyes of their titular hero, putting to rest the hopes and dreams of many similar Web3 games that too will likely shutter in a gaming market that's volatile for even the largest and most experienced studios. It’s now time to take a closer look and see what went wrong and whether this entire NFT-tokenomics experiment can finally be put to rest.

It's easy to look back on the saga of Ember Sword and simply shrug off the failure as nothing more than an unequivocal rejection of NFTs. It’s more than that, though. The problem began with some fundamental shifts in the design of the game. Coming from someone who was at the forefront of the game, from its humble offline demo that showed some promise, to their change in gameplay with a combat-free demo, and onto a fantastic showing of boss mechanics with an on-site demo, it seemed as though the team was having trouble pinning down exactly what needed to be done to succeed.

Originally slated as a game intended to merge the planning and competitive combat stylings of a MOBA with the massive world of an MMORPG, it felt as though Bright Star was sound in their vision but always seemed to lag horribly in execution. Despite securing pledges of over $200 million (but only 11 million of funding) just four years ago and crafting a browser-streamable engine meant to revolutionize gaming (an engine they intended to license to other developers), we have to wonder where it all went wrong. From an outward perspective, the funding accrued over virtual land assets should have easily pulled the game through to release, not even accounting for investment rounds securing big names like former Blizzard CCO Rob Pardo and (in)famous influencer Dr. Disrespect among its advocates.

Yet, we have now found that all the funding, investments, and endorsements mean precisely dick. More than 35,000 players (myself included) lost what was otherwise described as more than just a crowdfunded investment in the future of a promising game. Rather, it was in many ways a financial investment, where the popularity of the game could have become some sort of Axie Infinity-esque money-making opportunity.

Meanwhile, Web3 proponents continuously attempted to convince gamers that ownership of their in-game assets would somehow fix the longstanding problem of developers hogging all monetization possibilities for players on gray markets. But this has all been posturing. We’ve known from the jump that gray market sales, though generally frowned upon by most games' Terms of Service, were never mechanically off the table. Yet, we were somehow meant to believe the premise that real-money transactions not only required the presence of a blockchain marketplace but would also more easily facilitate payments through a complex process of tokenomics.

One of the main hurdles was that this was never a simple process—not for developers and certainly not for gamers. Bright Star could have streamlined this process if they wanted, but instead, it became a convoluted system requiring players to jump through multiple hoops to achieve largely the same goal. We saw this when they jumped ship from multiple layer 2 blockchains, from the perfectly reasonable Polygon network to Immutable X, another solid GameFi branded network, only to later jump ship again for Mantle. These moves did little more than frustrate players, forcing them to constantly stay on the ball to ensure their assets remained accessible once the new chain was available.

But what does that matter when your assets are worthless anyway? Players repeatedly dipped into their wallets to purchase exorbitant packages filled with Ember Tokens, intended to facilitate trades. These tokens appeared on blockchain exchanges, holding relative value depending on trade volume. It may not surprise you to learn this token is now worth less than thousandths of a cent, with trade volumes cratering and a current fully diluted value 99% lower than its peak.

The Grand Scheme of Things to Come

It’s obvious that we can’t overstate the lack of enthusiasm for blockchain gaming. However, it's not something we can blame solely on the presence of technology used in Ember Sword. Design philosophy greatly impacts how these games are advertised, marketed, and ultimately perceived by players. Ember Sword envisioned world hubs as spaces for players to create sprawling cities, spur events, receive kickbacks from renting land, trade items for real-money-tradable currency, and outright sell cosmetics.

The critical problem we encountered was that there just wasn’t enough meaningful content to play, even ignoring the simplistic combat design that never genuinely evolved. It all felt like a proof of concept stalled indefinitely in research and development. Upon the game’s Early Access release, it became abundantly clear that the experience on offer was insufficient to capture the attention of anyone beyond a handful of testers.

Knowing firsthand the passion of the development team during my visit to the studio in 2023, it was disheartening to witness the state of the game upon Early Access. Web3 has been an experiment with wildly unpredictable results within an inherently volatile market. However, Bright Star wasn’t merely a Web3 gaming company—they were also an indie development team. Strangely enough, most small indie teams currently in the MMORPG market would salivate at the thought of a $20 million budget (based on land sales and investments). Often, these smaller teams manage to create compelling and intriguing games on shoestring budgets, driven purely by passion.

Yet, passion projects remain just that, ventures pursued with the understanding that the odds are stacked against them and that long-term financial viability is uncertain at best. Ember Sword, for all its bluster, delivered an indie gaming experience but carried the expectations and responsibilities of a triple-A funded title. Now, former players are left holding nothing more than the bittersweet memories of a promising true-form Web3 MMORPG—and, of course, their now-worthless non-fungible tokens. It’s an undeniably catastrophic loss for fans who invested tens of thousands of dollars to become landowners of towns and cities, some spending upwards of $80,000 for returns they will sadly never see.

Now That The Smoke Has Cleared

Ultimately, Ember Sword stands as a stark reminder of the perilous combination of grand ambitions, experimental technologies, and substantial financial underestimation. We can make a case that innovation often demands risk, this collapse illustrates once again that games specifically are ventures that can quickly spiral out of control when fundamental design and execution falter. Throw in a distasteful gimmick, turning a once fun game into a potential job opportunity, while stopping short of making that game engaging, and you have Ember Sword’s downfall wrapped up in a bow.

This is not merely a cautionary tale aboutthe overwhelming perils of blockchain gaming and volatile nature of GameFi, but a broader lesson about balancing dreams with reality in game development. We can only hope future studios take heed of history on the potential for upcoming projects.