Caladan Report: Web3 Games "Burned" $15 Billion, 93% of GameFi Projects Have Failed

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BlockBeats News, April 23 — According to CoinDesk, data from market-making and trading firm Caladan shows that Web3 gaming has burned up to $15 billion in funding chasing a token-driven future, but has not gained player acceptance. Caladan’s report states that approximately 93% of GameFi projects have actually declared failure, with token values down about 95% from their 2022 peak, and funding for studios shrinking by 93% by 2025. Over 300 blockchain games have shut down. The report points out: “Capital is being destroyed at every level,” with venture capital, retail NFT buyers, gaming guilds, and Telegram’s 300 million users in the tap-to-earn craze all victims of the same period. Hamster Kombat lost 96% of its users within six months of launch, and flagship game guild token YGG has fallen 99.6% from its November 2021 peak.

Individual project cases are shocking: Pixelmon raised $70 million in NFT sales in 2022, but four years later, no public game has been released; Ember Sword burned through $18 million during its seven-year development period, shut down last May with no refunds; Gala Games was involved in a lawsuit, accused of embezzling $130 million worth of tokens by its co-founders; Square Enix quietly shut down its Symbiogenesis experimental project last July. Once industry flagship Axie Infinity’s daily active users have fallen from a peak of about 2.7 million to around 5,500 (DappRadar data). The report cites a Coda Labs survey indicating that even at the peak of the craze, only 12% of players had tried crypto games.

Capital flow is most illustrative: in 2022, gaming accounted for 62.5% of total Web3 venture capital, but by 2025, that proportion has fallen to single digits, with AI, real-world asset tokenization, and Layer 2 infrastructure absorbing the shifted capital. Even the most active supporter in the field, Animoca Brands, has reduced its gaming share in its investment portfolio to about 25%, shifting focus to stablecoins, RWA, and AI.

YGG-0.96%
AXS-1.63%
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