Analysis: Over 90% of Web3 games fail because players never show up.

According to Caladan, the Web3 gaming industry burned through as much as $15 billion chasing a token-based future, but players never joined. By 2025, investment in Web3 gaming had almost completely dried up, with funding shifting to AI, real-world assets, and Layer-2 infrastructure, leading to the industry's collapse. Data shows that approximately 93% of so-called GameFi projects are now virtually dead, token values ​​have fallen by 95% from their 2022 peak, and funding for game studios has also plummeted by 93% by 2025. In 2022, 63% of venture capital funding for Web3 went into gaming, but by 2025, that percentage had fallen to single digits. This rapid shift of capital to AI, asset tokenization, and infrastructure led to the closure of over 300 games, turning Web3 gaming into a cautionary tale about chasing speculation while ignoring product-market fit. The report states that capital was destroyed simultaneously at every level, with investors, studios, retail NFT buyers, gaming guilds, and even the 300 million Telegram users' "click-to-earn" wave all becoming victims of this disaster. These failures weren't simply due to a bad cycle or poor execution. Data shows it was more of a structural mismatch: Web3 gaming models were built around financial incentives, while the player base consistently indicated they needed entertainment more. GameFi's core was the "play-to-earn" model, transforming gameplay into a financial feedback loop. Players bought tokens or NFTs, earned rewards in the same assets, and cashed out profits as new players joined. However, once the inflow of funds slowed, the economic model collapsed. Token prices plummeted, rewards decreased, users churned, and the entire in-game economy collapsed. Perhaps the most striking data point is the shift in fund flows. In 2022, the gaming sector attracted 62.5% of Web3 venture capital, but by 2025, this percentage had fallen to single digits. AI, real-world asset tokenization, and Layer-2 infrastructure attracted this lost capital. Even Animoca Brands, one of the most active investors in the Web3 space, has reduced its gaming business to about 25% of its portfolio and is beginning to shift its focus to stablecoins, real-world assets, and AI. (CoinDesk)