Web3 Games: Why 3 Out of 4 Projects Never Make It Past Launch

The GameFi sector has become synonymous with failure. According to a comprehensive analysis by CoinGecko using data from blockchain platform Footprint Analytics, a staggering 75% of all Web3 games launched over the past five years have gone dormant. Out of 2,817 projects that entered the market between 2018 and 2023, roughly 2,127 simply didn’t survive.

The Numbers Tell a Brutal Story

The statistics are sobering. An average failure rate of 80.8% annually since 2018 means the odds are heavily stacked against any new Web3 game launching today. CoinGecko’s methodology classified games as inactive when their 14-day moving average user count dropped by 99% or more—essentially meaning they went from something to nothing.

The early momentum was real. When CryptoKitties exploded in late 2017, it sparked enthusiasm across the industry. Play-to-earn (P2E) gaming became the buzzword, and by 2018, projects flooded the market. That year saw 422 Web3 games launch, yet 307 collapsed almost immediately, representing a 72.7% failure rate right out of the gate.

When the Cycle Turns Harsh

The bear markets of 2019 and 2020 devastated the space. Interest evaporated as the broader crypto market entered its winter. Although only 244 games launched during this two-year stretch, the damage was severe—94.3% and 94.2% failure rates respectively. It wasn’t a question of whether projects would fail, but when.

Then came the 2021 bull run. Hope returned. With crypto momentum behind them, GameFi projects showed unexpected resilience, dropping the failure rate to 45.9%. While 339 games still became inactive that year, it marked the best performance for the sector despite the year’s high-profile collapses.

The Crash and the Signals of Recovery

2022 shattered the optimism. The cryptocurrency market’s collapse triggered a cascade of failures, with the Web3 gaming sector recording its worst year: a 107.1% failure rate and 742 dead projects. The numbers exceeded expectations—more games failed than existed at the year’s start.

Yet 2023 brought a surprising reversal. As 509 GameFi projects went inactive at a 70.7% failure rate, the downward trajectory itself became noteworthy. CoinGecko’s analysis suggests the industry may finally be stabilizing. Fewer new projects are being launched recklessly, and those entering the market appear more sustainable than their predecessors.

What This Means for Web3 Games Moving Forward

The five-year track record reveals a sector shaped by market cycles and speculative fervor. The early promise of play-to-earn mechanics attracted capital and players alike, but sustainability proved elusive. As the Web3 games space matures, the lower failure rates could indicate investors and developers are learning from past mistakes—building with longevity in mind rather than chasing short-term hype.