- The GameFi sector is a powerhouse within the crypto industry, attracting substantial investments and user engagement.
- Despite GameFi’s rising success, CoinGecko presents a worrying outlook for the industry’s prospects.
- Considering the recovering market and the onset of a bullish trend, the GameFi sector could be on a path toward stabilization.
Web3 gaming emerged as a highly acclaimed and anticipated use case within the crypto industry, allowing users to earn rewards and extract tangible value from their gaming experiences.
Historically, the sector has attracted immense funding, injecting substantial investments and attention into crypto. Even this year, Web3 gaming projects have collectively secured over $2 billion in funding. However, despite this financial influx, CoinGecko’s data paints a potentially worrisome picture of the industry’s future, leading to a pressing question:
Are Web3 Games Dying?
A Majority of Web Games Fail, CoinGecko
The blockchain gaming sector is a powerhouse within the crypto industry, consistently affirming its prominence through a steady rise in daily active wallets. However, as revealed by CoinGecko’s latest report, a closer look unveils a stark reality – three in four gaming projects fail.
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Over the past five years, since the emergence of the GameFi trend, more than 2,800 Web3 games have entered the scene. Yet, around 2,100 of these games have closed shop. CoinGecko reports that the average annual failure rate for Web3 games stands at 80.8% from 2018 to 2023, calculated based on the number of failed games compared to those launched.
While the early stages of the sector saw different dynamics, with bullish macro conditions favoring growth, Web3 games have struggled during bear markets, resulting in a 95% failure rate in 2020 and 2019. In contrast, 2021 experienced the lowest Web3 games failure rate at 45%.
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According to CoinGecko, 2022 was the worst year, with the annual number of defunct Web3 games more than doubling, registering a failure rate of 107.1% despite a high influx of new Web3 games.
This year, 509 Web3 games have met their demise, constituting 70% of the Web3 games that launched. Interestingly, the lower failure rate suggests that the industry could be charting a course toward stabilization, considering the recent market recovery and the onset of a bullish trend.
On the Flipside
- According to DappRadar, Blockchain gaming reached 1 million daily unique active wallets in October, commanding 33% of the industry’s activity.
- It’s important to highlight that, as per CoinGecko’s report, Web3 Gaming projects were categorized as inactive when their 14-day moving average number of active users plummeted by 99% or more from the peak.
Why This Matters
Web3 Gaming is pivotal in the crypto industry, attracting substantial investments and user engagement. Nevertheless, the recent downturn in the market raises concerns that may erode investor confidence in the sector.
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