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GameFi within crypto-based games is experiencing a noticeable downturn. A recent analysis by Coingecko revealed that as much as 75% of GameFi ventures have failed. This collapse highlights the challenges faced by initiatives trying to combine cutting-edge ideas with gaming and cryptocurrencies.
Current State of Crypto-Based Games
According to the analysis, of the 2,817 games launched between 2018 and 2023, only 690 maintain a reasonably active user base. If a Web3 game is being evaluated by Coingecko, a 14-day moving average of active users that is 99% or more below the peak is considered “unsuccessful.”
Coingecko reports that after five years since the emergence of game financing or GameFi, three out of four Web3 games have ceased operations. Another past study claimed that 95% of NFTs are now essentially worthless.
During the bull market, projects appeared strong, and in 2021 the failure rate was below 46%. However, the number of unsuccessful Web3 games rose to 339, surpassing the 2018 figures. The market continued to see a succession of collapses. The decline continued in 2022, and the number of failed games more than doubled, setting a record. The failure rate reached 107.1%, the highest level of all time, with 742 failed games.
Measurements showing parallels with the bright period of 2018 reveal that 509 games (or 71%) launched this year were unsuccessful as of 2023. Considering this decline in failure rates compared to previous years, there might be a chance for the Web3 game market to stabilize.
Is It the End for Web3 Games?
At the end of 2017, Canadian studio DapperLabs created the blockchain game CryptoKitties, which quickly became popular and sparked GameFi in 2018. Play-to-Earn (P2E) games took on another dimension after this point, resulting in the launch of 422 Web3 games in 2018 alone.
CryptoKitties was one of the first Web3 games to gain popularity in late 2017, but since then, its popularity has significantly declined. Today, other notable games include Axie Infinity, The Sandbox, and Decentraland.
Play-to-Earn (P2E) offers players the opportunity to earn rewards for their time and effort. In this process, the rewards include in-game cryptocurrencies and NFTs that are sellable, tradable, or usable as collateral in other financial applications.
From January 1, 2023, to April 22, 2023, the most popular three games were Alien Worlds, Planet IX, and Splinterlands, according to current data. The highest average number of unique active wallets for games occurred during this period.
Furthermore, data shows that the number of Web3 and crypto-based games without players reached a record level of 742 last year. In addition, the number of new Web3 games continues to increase.
- GameFi ventures face a 75% failure rate.
- Coingecko analysis reflects the GameFi downturn.
- Web3 games struggle amidst crypto decline.
