Is there still hope for the GameFi market? Coingecko: 3 out of 4 Web3 games have failed

The data company Coingecko conducted a study on failed cases in the GameFi sector, finding that Web3 games gradually gained popularity after 2017 and saw a sharp growth in 2018. However, its development slowed down during the bear market from 2019 to 2020, only to resurge in the crypto bull market of 2021. So far, the growth of this market seems to be gradually stabilizing.

How Many Web3 Games Have Failed?

Coingecko first cited data from Footprint Analytics, stating that out of 2,800 Web3 games in the past five years, over 2,100 have ultimately failed, with a staggering failure rate of 75.5%.

This means that for every 4 web3 games, 3 are in a state of player inactivity.

It is reported that the study examined 2,817 Web3 games launched from 2018 to 2023; and the activeness of Web3 games is defined based on whether their "14-day moving average active user count" has dropped by 99% or more from its peak.

Footprint Report｜73% of GameFi projects have monthly active users of less than ten people

The Decline of GameFi from 2018 to 2023

Following the massive success of the P2E Play To Earn pioneer CryptoKitties in 2017, the next year saw 422 Web3 games being born, but 307 had already fallen by the wayside.

Subsequently, during the bear market contraction from 2019 to 2020, the development of GameFi slowed down, but the failure rate over two years remained high at 94.2%.

Later, the bullish sentiment of 2021 successfully brought hot money into the GameFi industry. Despite the increasing number of failed games, the failure rate hit a new low of only 45.9%.

However, the surge in the number of Web3 games due to market enthusiasm has brought more failed projects when the hype fades. According to statistics, the number of failed Web3 games is twice that of the previous year, reaching a new high of 742 games and a 107% failure rate.

As of this year, 509 Web3 games have failed, accounting for 70.7% of games launched this year, marking the lowest failure rate in nearly 5 years, indicating a potential stabilization of the market.

Are There Inherent Issues with GameFi Itself?

The above data shows that Web3 games face significant challenges in sustainability and success, with most heading towards failure. While 2023 may see some stability, the historically high failure rate highlights the fundamental risks and operational difficulties of GameFi projects.

Crypto venture capital firm Paradigm has also pointed out the current bottlenecks and challenges facing Web3 games in previous reports, offering many suggestions to game developers.

Cointelegraph has expressed a similarly pessimistic view in previous reports, using the example of the well-discussed chain game Illuvium to highlight that most GameFi developers focus on tokens rather than the changes and fun of the game that players desire:

Any highly anticipated Web3 game may gradually disappear.

GameFi's Resurgence, but Can it Last?

Nevertheless, the GameFi sector has benefited from the recent surge in market enthusiasm. According to data from DappRadar, the top 10 Web3 game projects in terms of active wallet transaction volume have mostly seen growth in trading volume in the past month, and Coingecko data indicates that the current market value has reached $13 billion.

Furthermore, the development of the GameFi industry is still ongoing. Projects such as the launch of the AAA game Illuvium by Epic Games, the new Gas Hero by the StepN team, and the base-building game Fren Pet, have sparked community discussions on Twitter and attracted many players to participate.