Pixelmon stops game development due to unclear publisher test results

Pixelmon terminates game development and abolishes game team

Pixelmon has decided to stop all game development efforts and disband its game development team after a three-week publish-led testing failed to produce results sufficient for long-term commercial cooperation.

After three weeks of testing by external publishers, Pixelmon officially ended all game development projects due to ambiguous results and failure to reach any long-term cooperation agreement. Although the publisher had asked Pixelmon to further polish the game and conduct the next round of testing, after more than two years of similar stagnation, management finally decided not to move forward.

Currently, game team members have been notified and received severance pay and other statutory benefits. Related games will soon be rolled off the production line and their technical systems will also be dismantled. A small number of senior and cross-functional staff will stay on to explore business models in non-games areas, and more details are expected to be announced at an all-staff meeting on Thursday.

Pixelmon said that given the company's shareholding structure and shareholder obligations, refunds are not a viable option. The remaining funds will be used to find a viable business model, and if efforts fail, the company may choose to close down.

Pixelmon announced on its official Discord channel that in the past three weeks, external publishers have invested their own marketing budgets to promote their games and used their own tools to study player acquisition and retention. Publishers did not directly reject these games, but the data performance was not enough to support their long-term cooperation commitments.

Instead, the publisher advised Pixelmon to polish the game further and launch a new round of testing within a few weeks. After consideration, Pixelmon's leadership decided to reject the proposal, thus ending the game development process that lasted for more than two years and had always been in a "fair but not ideal" stage.

"We realize that this state of 'not too bad but far not good enough' has been going on for more than two years," the team said in a statement, adding that there had been an internal consensus that this publisher test will be the last attempt.

Full termination of game development after final testing

Following the decision, Pixelmon issued dismissal notices to all game team members on Friday and provided severance payments and other benefits in accordance with legal requirements in their respective jurisdictions. After the game goes offline and related systems are dismantled, employees will enter the so-called "garden leave" period, which means spending the notice period at home.

Pixelmon did not disclose the names of external publishers participating in the latest test, nor did it disclose specific data on marketing spending, acquired or retained by players. The company described the operation as an "audit" in which publishers examined the performance of user groups introduced into games through paid advertising campaigns.

The project has been developing games around its NFT intellectual property for years. In August 2024, Pixelmon announced that he was preparing to showcase "Warriors of Nova Thera" and "Hunting Grounds" after completing testing with members of the Discord community. Previous plans are even more ambitious: When Pixelmon raises new funding in 2024, the company is developing four games, including PixelPals, Hunting Grounds, Arena and Kevin the Adventurer.

The decision to stop development means Pixelmon will no longer polish or test its existing game portfolio. As management considers a business direction that does not rely on game development, a small group of senior and cross-functional employees will remain on the project.

Turning to potential non-game business transformation

Pixelmon said that the left-behind team is currently exploring the non-game path of the project, and more details will be announced at an all-staff meeting on Thursday. Management described the process as another attempt to find a viable business model and mentioned previous projects such as Launchpool, CollectShiny and Lexium. Unlike in the past, the new process will occur without accompanying game operations or Launchpool processes.

Pixelmon's MON Launchpool program is part of a multi-year expansion of its project from the original NFT game concept. As the NFT field seeks new ways to bring digital collectibles into consumer applications, the Pixelmon brand has previously made its mark in projects built on the Coinbase Base network.

The left-behind team plans to discuss its approach to future transformation and progress on AI tools at a meeting on Thursday. Management said the meeting will also cover how the team and community will operate while exploring alternatives.

Refunds to the community are not considered. Pixelmon pointed out that the company responsible for the project has shareholders, including funds and financial investors who provide capital to acquire intellectual property and transfer funds from its original New Zealand entity. Due to the company's ownership structure and obligations to equity shareholders, management stated that it is structurally impossible to achieve refunds. The remaining tax-free custody funds will be used to try to find business models that match the product's market fit. If the effort fails, Pixelmon said the alternative is to close the company.

The US$8 million financing previously supported the game plan

This decision comes more than two years after Pixelmon received an US$8 million seed round of funding two years ago supported by investors such as Animoca Brands, Delphi Ventures, Foresight Ventures, Amber Group, Bing Ventures, Bitscale Capital and Cypher Capital.

Crypto.news previously reported that Pixelmon raised $8 million in its February 2024 financing cycle, when cryptocurrency start-up collectively attracted hundreds of millions of dollars in venture capital. The financing is intended to support the development of Pixelmon's casual and mid-core game portfolio. At the time, Pixelmon positioned itself as a decentralized games brand built around collectible bios and intellectual property, and scalable to different games and other media forms.

Its history traces back to one of the most closely watched issues on the NFT market. In February 2022, Pixelmon generated approximately $70 million in revenue from NFT Foundry by promoting an Ethereum-based Play-to-Earn game program. Buyers paid up to 3 ETH for certain NFT during the primary sale.

Subsequent art revelations sparked strong criticism because the final 3D models diverged significantly from the conceptual art presented prior to casting. The revelation of the Pixelmon NFT art sparked complaints from its owners and became one of the project's earliest major setbacks.

Pixelmon then changed leadership and rebuilt some projects, including its artwork and game plan. Development work spanned multiple titles and tests until the latest publisher testing prompted management to completely terminate game operations.

Web3 game closures continue for years

Pixelmon is not the first venture backed blockchain game project to abandon work after years of development. Tatsu Works stopped developing "Tatsumeeko: Lumina Fates" after determining that its development results were not enough to continue with confidence. About three years after Tatsu Works raised $7.5 million from DeFiance Capital, Delphi Ventures, Bitkraft Ventures (including other participants such as Animoca Brands and Binance Labs), the project was announced to be closed.

Tatsu Works said at the time that it would redirect work to a separate project and find new uses for NFTs related to Lumina Fates.

Pixelmon's left-behind team took a different path, removing game development from operations when evaluating potential business models around remaining assets and resources. Management said Thursday's all-staff meeting will provide more information on potential transformations, AI tool work and future operational relationships with the Pixelmon community.