This would explain why there's been so much decline in Blockchain based games niche
I work as moderator in that particular space, and most of what is called Blockchain based games or Web3 games is just regular Web2 games with an option to make deposits using crypto

What I've seen more lately is connecting your wallet to access tokens you store and have it recorded on the game database, it's great, but then most of the other assets in the game are still not on chain, or not withdrawable to an on-chain wallet

I believe with time more games will use this approach where game items are very much on-chain, readily transferable and easy to store

I believe in the future of Blockchain games that's beyond just deposits and withdrawals, but also game assets and  (CREDENTIALS) if you'd call it so