Caladan Report: Web3 Game 'Rug Pulled' $15 Billion, 93% of GameFi Projects Have Failed
BlockBeats News, April 23rd. According to CoinDesk, market-making and trading firm Caladan's data shows that Web3 games have burned up to $15 billion in pursuit of a token-driven future, yet have not gained player acceptance. The Caladan report states that about 93% of GameFi projects have effectively declared failure, with token values dropping around 95% from their 2022 peak, and funding for studios shrinking by 93% by 2025. Over 300 blockchain games have been shut down. The report points out, "Capital is being destroyed at every level," with venture capital, retail NFT buyers, game guilds, and the tap-to-earn frenzy of Telegram's 300 million users all being simultaneous victims. Within six months of its launch, Hamster Kombat lost 96% of its users, and the flagship game guild token YGG dropped by 99.6% from its November 2021 peak.
Individual project cases are alarming: Pixelmon raised $70 million in an NFT sale in 2022, with no public game released four years later; Ember Sword burned $18 million during its seven-year development period, shut down in May last year with no refunds; Gala Games is embroiled in litigation, accused of misappropriating $130 million in tokens by a co-founder; Square Enix quietly closed its Symbiogenesis experimental project in July of last year. Once a flagship in the industry, Axie Infinity's daily active user count has dropped from a peak of around 2.7 million to about 5,500 currently (DappRadar data). The report cites a Coda Labs survey indicating that even at the peak of the craze, only 12% of players had tried a crypto game.
A telling flow of capital: Gaming accounted for 62.5% of Web3 venture capital in 2022, but by 2025, this proportion had dropped to single digits, with AI, real-world asset tokenization, and Layer2 infrastructure absorbing the diverted capital. Even the most active supporter in this field, Animoca Brands, has reduced the proportion of gaming in its investment portfolio to about 25%, shifting towards stablecoins, RWA, and AI.
