- The 2021 bull market registered a significantly lower failure rate of 45.9%.
- A marked drop in failure rate was seen in 2023.
After decentralized finance (DeFi) and non-fungible tokens (NFTs), gaming is being touted as the next major catalyst for mass Web3 adoption.
The prospect of decentralized ownership of in-game assets and getting the ability to trade them outside the gaming world has garnered the interest of many enthusiasts.
However, a not-so-optimistic development came to light recently, casting aspersions on its growth story.
Most Web3 games end up failing
More than 75% of all Web3 games launched in the last five years have failed, based on a recent report by crypto market tracker CoinGecko. The study analyzed as many as 2,817 blockchain-based games for the period from 2018 to 2023.
In fact, the average annual failure rate for all games launched in the aforementioned time period was a whopping 80.8%.
Coingecko called a “failed” or inactive Web3 game as one whose 14-day moving average number of active users fell by 99% or more from peak.
Upon examination of the data provided, it became clear that barring the 2021 bull market, nearly all the year included in the survey witnessed high failure rates.
Indeed, 2021 registered a significantly lower failure rate of 45.9%. Note that this phase coincided with increased interest in most of the Web3 narratives, including DeFi and NFTs.
However, things were pretty dull in the 2019-2020 bear market. Not more than 244 games were launched. To make matters worse, more than 94% of the games failed.
Just like the pre-bull market phase, the year after the historic bull run of 2021 also proved to be ordinary.
In fact, a record 107% failure rate was witnessed during 2022. This basically meant that more games, some of which were launched in previous years, failed than the ones getting launched.
Signs of recovery?
Talking about 2023, about 509 Web3 games succumbed, resulting in a failure rate of 70%. The marked drop in failure rate indicated stabilization of the vertical, CoinGecko opined.
As of this writing, motoDEX, Sweat Economy, and Pipeflare were the largest Web3 games, AMBCrypto observed using DappRadar’s data. The performance was based on unique active users who interacted with the games in the last 30 days.