The Web3 Gaming Graveyard: Why Three-Quarters of Projects in the Last Five Years Never Made It

The track record for Web3 games over the past five years tells a sobering story. According to comprehensive research from CoinGecko using data from blockchain analytics firm Footprint Analytics, roughly 2,127 Web3 games have gone defunct since 2018—representing a staggering phenomenon where more than 75% of all Web3 games last five years never achieved sustainable traction.

The Numbers Behind the Collapse

CoinGecko’s examination of 2,817 Web3 games launched between 2018 and 2023 revealed a consistent pattern of struggle. The research defined inactive projects as those experiencing a 99% or greater decline in their 14-day moving average of active users by November 27, 2023.

The statistics paint a bleak picture: since 2018, GameFi has maintained an average annual failure rate of 80.8%. The inaugural year of mass GameFi adoption illustrates this trend—in 2018, approximately 422 games entered the market following the viral success of CryptoKitties and the emergence of play-to-earn mechanics. Yet 307 of those projects crumbled within the same year, posting a 72.7% failure rate.

The subsequent years witnessed even more dramatic collapses. The 2019-2020 period saw only 244 new launches combined, as bear market conditions devastated the sector. Both years registered catastrophic failure rates: 94.3% in 2019 and 94.2% in 2020, demonstrating how cyclical crypto conditions directly impacted GameFi viability.

A Brief Respite, Then Renewed Turmoil

The 2021 bull cycle provided temporary relief, with Web3 games experiencing a comparatively improved 45.9% failure rate. Still, 339 projects became inactive that year despite what should have been favorable market conditions.

The deterioration resumed sharply in 2022, which logged the worst performance on record with a 107.1% failure rate—meaning the quantity of dead Web3 games actually exceeded new entries. An unprecedented 742 GameFi projects collapsed that year as the broader cryptocurrency market imploded.

Signs of Market Maturation

Recent data suggests potential stabilization ahead. In 2023, approximately 509 GameFi projects went inactive, translating to a 70.7% failure rate—a meaningful improvement from 2022’s catastrophic levels. CoinGecko attributes this declining failure trajectory to the Web3 space finding equilibrium after years of unsustainable growth and market cycles.

The last five years of Web3 games development reflects an industry undergoing painful consolidation. While current trends hint at emerging stability, the historical weight of failure remains the defining characteristic of GameFi’s brief history.