According to a study by CoinGecko, three-quarters of all Web3 games fail. How are these figures calculated and what are the reasons behind them?
Three quarters of Web3 games are doomed to failure
Over the past few years, the video game sector has seen a huge boom in the Web3 ecosystem following the success of CryptoKitties in 2017, so much so that a new term has been coined: GameFi.
Since then, a multitude of play-to-ean games have been created, making use of non-fungible tokens (NFT) and with a variety of mechanics. But while some of them find their audience and manage to last over time, many fail and quickly fall into oblivion.
To quantify this comparison between failures and successes, CoinGecko conducted a study using data from Footprint Analytics. In order to consider that a game has failed, it is assumed that this was the case when it saw its number of active users drop by 99% compared to its historical high on a 14-day moving average.
Based on these parameters, CoinGecko found that since 2018, one in four Web3 games has failed. The graph below shows an annual comparison between the number of play-to-earn launched and the quantity of failures:
Comparisons between Web3 games launched and those that failed
In year-on-year comparisons, 2022 proved particularly catastrophic for the sector, with more games failing than launching in the same year. Of the 6 years studied, 2021 fared the best, as it was known to have seen tremendous growth in the sector, with a failure rate of “only” 45.9%.
A number of factors may explain these numerous failures.
Firstly, it’s important to bear in mind that, as this sector is still completely new, everything is still at an experimental stage, with games still seeking their own business model.
Then, as in any industry, when a project succeeds, the copycats arrive, pouring a good number of more or less convincing imitations onto the market in an attempt to capitalize on the trend, inevitably bringing its share of garbage.
On the other hand, even when a game is successful and driven by a serious team, it needs to find its audience in a still very young ecosystem.
Although a lot of progress is being made year after year, Web3 still has challenges to overcome in order to welcome more adopters, especially in terms of user experience.
