Immutable Cuts 33% of Staff, Leverages AI to Streamline Web3 Gaming Operations

According to the Financial Review, Australian Web3 gaming giant Immutable has reduced its workforce by approximately one-third over the past nine months, bringing its headcount from 224 in 2023 to around 150 by May 2025. The layoffs, confirmed by the company, reflect a strategic shift toward integrating artificial intelligence (AI) to handle roles in design, content creation, and other operational areas. This move comes as the Web3 gaming sector grapples with financial challenges and evolving technological trends

Immutable’s Workforce Reduction: Context and Details

Founded in 2018, Immutable has emerged as a leader in Web3 gaming, leveraging its layer-2 scaling solution on Ethereum to power blockchain-based games like Gods Unchained and Guild of Guardians. The company achieved a $3.5 billion valuation in 2022, cementing its status as one of Australia’s top private tech firms. However, rising operational costs and a prolonged bear market in crypto assets contributed to reported losses of $50 million in 2023, prompting cost-cutting measures. The layoffs, which began in 2023 and continued through 2024, affected teams across commercial, engineering, product, and marketing functions. Immutable has confirmed that some of these roles are now supported by AI tools, particularly in areas like game design and content creation, where automation can enhance efficiency. This aligns with broader industry trends, as AI-driven tools like non-player character (NPC) scripting and procedural content generation gain traction in gaming. A spokesperson stated that Immutable expects to approach cash flow break-even by the end of this year and is currently hiring for 20 new positions.

The Immutable (IMX) token, which powers the Immutable ecosystem, is at a historical price low, likely due to declining attention and broader market skepticism toward the blockchain gaming sector. According to CoinGecko, IMX reached a high of $3.60 in April 2024 and a peak of $9.31 in November 2021. As of May 23, 2025, IMX is trading at $0.7149, down 92.3% from its all-time high and 80% from its 2024 peak, reflecting significant operational pressures faced by Immutable.

The Role of AI in Immutable’s Strategy

Immutable’s adoption of AI reflects a growing convergence of Web3 and artificial intelligence in the gaming sector. AI-powered tools are increasingly used to streamline development processes, from creating immersive in-game environments to personalizing player experiences through data-driven insights. For instance, AI-driven crypto wallets can suggest in-game strategies or assets based on player behavior, enhancing engagement in Web3 titles. The company’s pivot to AI is not merely a cost-saving measure but a strategic bet on technology. Immutable’s ecosystem, built on its Immutable X and Immutable zkEVM blockchains, supports over 460 games, particularly in Asia, where the gaming market is projected to reach $400 billion by 2034. By integrating AI, Immutable aims to optimize development pipelines and deliver scalable, high-quality gaming experiences.

Web3 Gaming’s Broader Challenges

Immutable’s layoffs are emblematic of broader financial pressures in Web3 gaming. The sector, while promising, faces high development costs, complex blockchain integration, and fluctuating crypto asset values.

For example, Nyan Heroes, another Web3 gaming ecosystem, recently ceased development, as it could not secure the additional funds needed to complete development. Similarly, just hours after Nyan Heroes’ announcement, Blast Royale, a Web3 battle royale game that raised $5 million, revealed it will shut down on June 30, 2025.

According to a DappRadar report, blockchain gaming recorded 5.8 million daily active wallet addresses (dUAW) in Q1 2025, a 6% decline from the previous quarter. Metaverse NFT trading volume fell by 28%. Web3 gaming funding also saw a sharp drop, with $91 million raised in Q1 2025, down 71% from Q4 2024 and 68% from Q1 2024.

Despite these challenges, companies like Immutable, deeply engaged in Web3 gaming, are seeking new growth opportunities. Immutable has secured partnerships with major titles, including the upcoming AAA space exploration game Star Atlas and Ubisoft’s Might & Magic: Fates, which could drive significant revenue in the coming years, provided the company effectively navigates its ongoing restructuring.

Industry Implications and Future Outlook

Immutable’s shift to AI could set a precedent for other Web3 gaming firms. As development costs rise, automation offers a path to scalability, but it also raises questions about the balance between human creativity and machine efficiency. Bluwhale CEO Han Jin recently highlighted AI’s potential to personalize Web3 gaming experiences, but noted that reliance on centralized AI tools could strain decentralized ecosystems. Immutable’s challenge will be to integrate AI without compromising the decentralized ethos that defines Web3.

For now, Immutable’s leadership appears focused on long-term sustainability. The company’s partnerships with major players like Ubisoft and its focus on Asia’s burgeoning gaming market signal confidence in its roadmap. However, rebuilding trust with its community and delivering on high-profile projects will be critical to maintaining its $3.5 billion valuation.