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Study Finds 75% Of NFT Games Have Died In The Past Five Years – What Went Wrong?

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GameFi, a market segment within the decentralized finance ecosystem that combines blockchain technology with elements of game theory, has faded in the past several months, with a new study suggesting that 75% of these games have failed. In this article, we shall dive in-depth into what went wrong.

75% of NFT Games Are Dead

The analytic study done by CoinGecko.com, an on-chain data aggregator, has found that three out of four web3 games have become inactive since the emergence of Game Finance five years ago. The study comes just a few months after another study revealed that 95% of NFTs had gone nearly worthless.

CoinGecko study

The research firm has examined 2,817 web3 games which have been launched in the past five years. The study has found that 2,127 web3 games of the total games have become inactive. In other words, three out of every four or 75% of web3 games have died.

GameFi came into the spotlight in 2018, following the success of CryptoKittles, a blockchain game developed by Canadian studio Dapper Labs, in late 2017. At the time, play-to-earn (P2E) gaming became a popular crypto narrative, resulting in 422 web3 games launched in 2018 alone.

Play-to-earn (P2E) is a gaming business model that provides gamers with tangible incentives for their time and effort. Popular incentives include in-game cryptocurrencies and non-fungible tokens that can be traded, sold, or used as collateral in other financial applications.

What Went Wrong?

The initial traction in play-to-earn gaming began fading amid the 2019 and 2020 bear market. During that period, Only 244 web3 games were launched during these two years. At the same time, the failure rate of web3 games rose to 94.3% in 2019 and maintained at 94.2% in 2020.

The web3 gaming stabilized slightly in 2021 amid the crypto bull run, which left the majority of non-fungible tokens rising to new record highs. During this time, the gaming ecosystem recorded the lowest web3 games’ failure rate of 45.9%.

CoinGecko Study 2

Based on the research, the annual number of dead web3 games doubled last year, reaching a record yearly high of 742. This also marked the highest failure rate of 107.1%, even as the number of new web3 games remained high. The downtrend was again attributed to the crypto market downturn, which started in mid-June 2022.

Lastly, the study has revealed that 509 web3 games have become inactive since the start of this year, representing 70.7% of the web3 games launched this year. Nonetheless, since the global NFT market has recently started its recovery journey, many sectors, including gaming, are expected to return to life.

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