A Deep Dive into the Decline of Web3 Games Over the Last 5 Years (Research Analysis)

Web3 games
Web3 games

A Glance at the Grim Reality: The Alarming Rate of Inactivity

Recent findings from CoinGecko have brought to light a stark revelation: a staggering three out of every four Web3 games launched within the past five years have succumbed to inactivity. The Game Finance (GameFi) realm, emerging in 2017, has witnessed a disheartening trend, with over 75% of all Web3 games meeting their demise due to a waning interest from users.

Analyzing the Extent: CoinGecko’s Comprehensive Study

CoinGecko’s meticulous study scrutinized a total of 2,817 Web3 games unveiled between 2018 and 2023. Using insights from the blockchain data platform Footprint Analytics, the study identified active projects as of November 27, 2023. GameFi projects were categorized as inactive if their 14-day moving average of active users plummeted by 99% or more.

The Grim Numbers: A Daunting Landscape

The results were unsettling, revealing that approximately 2,127 Web3 games launched in the last five years have faced failure. Since 2018, the average annual failure rate for GameFi projects stands at a staggering 80.8%. This grim reality raises questions about the sustainability of the Web3 gaming space.

The Rise and Fall: A Historical Perspective

The initial success of pioneering Web3 games like CryptoKitties in late 2017 triggered a surge in new launches, leading to the popularity of play-to-earn (P2E) gaming. However, of the 422 games introduced in 2018, 307 met their demise, marking a failure rate of 72.7%.

A Period of Contraction: Struggles Amidst the Crypto Bear Market

In the subsequent two years, GameFi faced challenges amidst the crypto bear market. Consequently, only 244 games were launched in 2019 and 2020, with 230 projects failing, reflecting failure rates of 94.3% and 94.2%, respectively.

Glimmers of Hope: Signs of Stabilization

Amidst the turbulence, 2021 brought a glimmer of hope. The failure rate of Web3 games decreased to 45.9%, with 339 projects becoming inactive. Despite witnessing some of the most significant game failures, 2021 stands as the year with the lowest overall failure rate.

2022’s Dismal Record: A Double Blow

The year 2022, however, proved to be the darkest chapter, recording the highest failure rate at a staggering 107.1%. The number of defunct Web3 games more than doubled, reaching a yearly high of 742. This surge could be attributed to the bear market’s impact, leading to the collapse of numerous crypto projects.

A Ray of Hope in 2023: Signs of Stabilization

In 2023, approximately 509 GameFi projects faced inactivity, with a failure rate of 70.7%. CoinGecko suggests that this decline in the failure rate may indicate a potential stabilization in the Web3 space, offering a glimmer of optimism for the future.

In conclusion, the Web3 gaming landscape has navigated tumultuous waters over the last five years, with the looming question of sustainability. As we move forward, only time will reveal whether the recent signs of stabilization mark a turning point or a temporary respite in the dynamic world of Web3 games.