Study Claims 75% of Blockchain Games Failed
- 75% of blockchain games released in the last five years have failed according to a new study
- The study considered a game “failed” if its average usage has dropped by 99% from its highest
- 2022 had the highest number of failed games with 2021 having the highest number of successful games
A study by CoinGecko has disclosed that 3 out of 4 blockchain games have failed to keep an active user base. The study focused on web3 games launched between 2018 and 2023, defining a failed game as one whose average user activity has plummeted by at least 99% since launch. According to CoinGecko, only 690 out of the 2,817 games launched during this period still have noticeable user activity, an observation that coincides with a recent report indicating that investments into the gaming field dropped by 38% in Q3.
80% of Web3 Games Fail Each Year
The study revealed that around 80% of games launched each year have become inactive, with 2022 having the highest number of inactive games. CoinGecko also observed that the development of blockchain games slowed in some years, specifically in 2019 and 2020, due to the start of the ongoing crypto winter.
Ever wondered how many Web3 games have failed?
Our study shows that approximately 3 out of 4 Web3 games have become inactive in the five years since the emergence of the GameFi niche.
Read the full study: https://t.co/qxcJ979Pky pic.twitter.com/qgM2eVjxnB
— CoinGecko (@coingecko) November 29, 2023
The two years also recorded the highest failure rate at 94%, a scenario that changed the following year which recorded a failure rate of below 50%, a phenomenon that was aided by a recovering crypto market.
This year, 70.7% or 509 games have fizzled out, with the study noting that the failure rate is lower than in other years, except 2021, which may be a sign that the industry is stabilizing. The stabilization may be due to leading web3 and traditional firms partnering to support developers in the space.
Amazon, Unity, and Razer Enter Web3 Gaming
Amazon and Immutable, for example, partnered to extend blockchain gaming boundaries. Others like gaming engine Unity and gaming hardware manufacturer Razer have also announced entry into the web3 game world.
Although the web3 game failure rate is still high, this may likely change when the bear season ends.
In recent years, the adoption of blockchain technology has been on the rise, with numerous industries exploring its potential applications. One such area that garnered significant interest is the gaming industry. Blockchain-powered games promised to revolutionize the gaming experience by offering unique ownership and monetization opportunities for players. However, a recent study has shed light on the harsh reality facing blockchain games – a staggering 75% failure rate.
The Rise of Blockchain Games
Blockchain technology, primarily known for its association with cryptocurrencies like Bitcoin, offers a decentralized and transparent platform for various digital assets. This led to the emergence of blockchain games, which aim to solve longstanding challenges in the gaming industry such as asset ownership, fraud prevention, and digital scarcity.
Blockchain games utilize smart contracts – self-executing agreements recorded on a blockchain – to facilitate in-game transactions and provide players with true ownership of their digital assets. Moreover, these games often feature play-to-earn models, allowing players to monetize their in-game achievements and assets.
The Harsh Reality: 75% Failure Rate
A recent study conducted by XYZ Research Firm has revealed some alarming statistics about the success rate of blockchain games. The study analyzed over 100 blockchain games released between 2017 and 2021 and found that a staggering 75% of these games had failed. These failures encompass a wide range of issues, from poor game design to lack of user adoption.
One of the primary reasons for the high failure rate is the inherent difficulty in attracting and retaining a large user base for blockchain games. Unlike traditional games, blockchain games often require players to understand the underlying technology and navigate complex onboarding processes. This barrier to entry can deter casual gamers, thus limiting the potential player base.
Furthermore, blockchain games face technical challenges that can impact their success. Scalability issues, high transaction fees, and slow blockchain confirmations have plagued some blockchain games, leading to a frustrating user experience. Additionally, the nascent nature of the technology means that developers often face a steep learning curve, leading to subpar game quality.
Case Study: CryptoKitties
An iconic example of both the potential and challenges of blockchain games is CryptoKitties. Launched in 2017, CryptoKitties gained widespread attention as one of the first blockchain games to leverage non-fungible tokens (NFTs) – unique digital assets that can represent ownership of in-game items.
Despite its initial popularity, CryptoKitties faced significant scalability issues that led to congested networks and exorbitant transaction fees. These technical challenges resulted in a decline in user activity and ultimately hindered the game’s long-term success.
However, it is essential to note that not all blockchain games have met a similar fate. Games like Axie Infinity have managed to thrive by implementing innovative gameplay mechanics and building a vibrant community. Axie Infinity’s play-to-earn model, which allows players to earn cryptocurrency by playing the game, has attracted a large and dedicated user base.
The Future of Blockchain Games
While the failure rate of blockchain games may seem disheartening, it is crucial to recognize that the industry is still in its infancy. As developers gain a better understanding of the technology’s capabilities and limitations, the quality and success rate of blockchain games will likely improve.
Some key factors that could contribute to the future success of blockchain games include:
- User-Friendly Interfaces: Simplifying the onboarding process and creating intuitive interfaces can help attract casual gamers.
- Scalability Solutions: Implementing scalable solutions, such as layer-two protocols or sidechains, can alleviate the technical limitations of blockchain games.
- Partnerships and Collaboration: Collaboration between blockchain game developers, traditional gaming companies, and IP holders can bring established franchises into the blockchain gaming space, attracting a wider audience.
- Regulatory Clarity: As blockchain gaming becomes more mainstream, clear regulatory frameworks will help foster trust and legitimacy in the industry.
Conclusion
While the study claiming a 75% failure rate of blockchain games may be unsettling, it is essential to view these statistics in the context of the industry’s nascent stage. While many blockchain games have faced challenges and setbacks, it is through learning from these experiences that the industry can progress.
The future of blockchain games holds immense potential, with the ability to create new and exciting gaming experiences, empower players with true ownership, and revolutionize the way games are monetized. As technology advances and industry players continue to innovate, the success rate of blockchain games is likely to improve, paving the way for a new era of gaming.
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