Proof of Play, the Web3 gaming studio behind the fully onchain game Pirate Nation, is shutting down after admitting it could not turn its blockchain gaming vision into a sustainable business at scale. Instead of allowing years of development work to disappear with the company, the studio is taking an unusual approach by open-sourcing Pirate Nation’s code and placing its artwork, intellectual property, logos and Founder Pirates NFTs into the public domain under a CC0 license.
The closure represents another setback for the Web3 gaming industry, but Proof of Play’s decision to release its technology and creative assets could allow developers — and potentially AI coding agents — to continue building with pieces of Pirate Nation long after the company itself disappears.
Proof of Play Couldn’t Make Fully Onchain Gaming Sustainable
Proof of Play was built around the belief that blockchain technology could fundamentally change gaming and potentially help create a more decentralized internet.
Pirate Nation became the company’s flagship experiment with that idea, using blockchain infrastructure as a core part of the game rather than simply attaching NFTs or tokens to a traditional video game.
But the studio ultimately concluded that the business model wasn’t working.
Proof of Play said it couldn’t build a product and sustainable business capable of proving its blockchain gaming thesis at scale.
The announcement effectively brings an end to a company that once had substantial ambitions for fully onchain gaming.
Pirate Nation’s Code Is Going Open Source
Rather than locking away its technology, Proof of Play is releasing a significant amount of its development work for other builders.
The open-source release includes the Pirate Nation Unity application, the game’s smart contracts, and an internal agent workflow tool.
Proof of Play said it wants to make as much of its code and artwork available as possible so that it can remain useful to future “builders & agents.”
That reference to agents is particularly interesting as AI-powered software development becomes increasingly common. Future developers could potentially use AI coding agents alongside Proof of Play’s open-source infrastructure to modify, repurpose or build entirely new projects from the technology.
Pirate Nation NFTs and Artwork Become Public Domain
Proof of Play is going even further with Pirate Nation’s creative assets.
The studio released its Founder Pirates NFTs, Pirate Nation artwork, intellectual property and logos under a CC0 license, effectively waiving copyright restrictions and placing those materials into the public domain.
The Pirate Nation art archive includes assets covering Combat Cards, Founder Pirates NFTs, logos and voxel game assets.
That means other game developers and digital creators can potentially reuse and modify those assets in their own projects without obtaining traditional licensing permission from Proof of Play.
Game developer AzFlin described the archive as a valuable collection for other developers, highlighting the 3D models and other reusable game assets included in the release.
PIRATE Token Has Collapsed Nearly 100% From Its Peak
Proof of Play’s shutdown comes after an enormous decline in the value of PIRATE, the token associated with the Pirate Nation ecosystem.
At the time of The Defiant’s report, PIRATE was trading around $0.001285, giving the cryptocurrency a circulating market capitalization of approximately $940,000 and a fully diluted valuation around $1.3 million.
The token had fallen approximately 99.7% from its $0.4757 all-time high, which was reached on July 18, 2024.
The dramatic collapse illustrates the difficulties faced by many Web3 gaming tokens after the sector attracted significant speculation and venture capital during previous crypto cycles.
Pirate Nation Foundation Will Continue Supporting PIRATE
The shutdown of Proof of Play does not necessarily mean the PIRATE token itself will disappear.
The Pirate Nation Foundation operates independently from Proof of Play and plans to continue supporting PIRATE while maintaining its website.
However, Proof of Play’s internal reward system is ending.
The company confirmed that existing Proof of Play points will not be redeemable for anything following the shutdown.
The token could therefore continue operating independently even though the studio responsible for developing Pirate Nation is disappearing.
Shiba Story Go! Finds a New Owner
Proof of Play’s other game, Shiba Story Go!, will survive the company’s closure.
The game has been acquired by an unidentified third party and will continue operating independently. Proof of Play did not disclose the identity of the buyer.
That creates two very different outcomes for Proof of Play’s gaming properties.
Shiba Story Go! will continue under conventional private ownership, while Pirate Nation’s technology and creative assets are being opened to the broader development community.
Proof of Play Once Had Much Bigger Ambitions
The shutdown represents a dramatic reversal for a company that once planned major infrastructure expansion.
Proof of Play was founded by former Zynga executives and raised venture funding to build Pirate Nation as a fully onchain game. In 2024, the company even announced plans to launch a second blockchain dedicated to handling the game’s transaction volume.
Proof of Play reportedly raised $33 million in seed funding in 2023, in a round co-led by a16z crypto and Greenoaks.
Just three years later, the studio is winding down.
Web3 Gaming Continues to Face a Sustainability Problem
Proof of Play isn’t alone.
Its closure follows other contractions throughout blockchain gaming, including Yield Guild Games’ decision to sunset its YGG Play publishing operation and eliminate 35 positions.
The problem facing the sector increasingly appears to be less about whether blockchain technology can technically power games and more about whether those games can attract and retain enough players to support sustainable businesses.
Web3 gaming projects have experimented with play-to-earn tokens, NFT ownership, fully onchain games, gaming-specific blockchains and decentralized economies, but creating games people consistently want to play remains the fundamental challenge.
What This Means for Web3 Gaming
Proof of Play’s shutdown is significant because Pirate Nation was designed around one of Web3 gaming’s most ambitious ideas — that games themselves could exist as persistent onchain ecosystems rather than applications controlled entirely by individual companies.
Proof of Play ultimately failed to turn that concept into a sustainable business. But its exit may unintentionally demonstrate another aspect of the Web3 philosophy.
A traditional gaming company can shut down and take its servers, source code, artwork and intellectual property with it.
