Game Over for GameFi? A Staggering 75% Crash and Burn in CoinGecko Report

Three out of four GameFi projects flatline after launch in five recent years. Is GameFi dead?

Cryptocurrency Gaming Meltdown

A recent study by CoinGecko has revealed that from 2018 to 2023, only one in four GameFi projects have survived. Over the past five years, 2,817 Web3 games have been launched, but unfortunately, around 2,127, representing 75.5%, have failed.

According to the report, a GameFi project is considered a failure (inactive games) when its number of active users drops by 99% in an average of 14 days or more from its peak.

The report also details the failure rate of GameFi projects in recent years, in addition to the number of game launches. Notably, 2022 recorded the highest failure rate with 107.1% despite the number of new web3 games. This was also the year of turmoil that caused the major market setback.

In contrast to 2022, only 45.9% Web3 games failed in 2021. This was the golden year of the crypto market. Decentralized finance (DeFi), non-fungible tokens (NFTs), and crypto games achieved several milestones.

Although the 70.7% failure rate of 2023 (to date) is significant, it is lower than the rate observed in 2022. However, a reduced failure rate does not necessarily imply stabilization within the web3 gaming industry

Game Over for GameFi?

Ongoing controversies have centered on the combination of gaming and financial aspects, of which the play-to-earn (P2E) model is the most common example. Axie Infinity’s initial success apparently inspired other teams to seize the market.

However, Sky Mavis’ move to turn its back to P2E and CoinGecko’s latest insights are some factual evidence that narrative is just a hook, GameFi needs compelling gameplay to reel in players.

GameFi is not dead, it will mature, as soon as it addresses the urgent problem about user’s experience, gameplay mechanics, and game’s business models.

In the end, the main course is play-to-have fun. The extra toppings can come in due time, per order.