The lure of monetizing and owning games in-game has fueled the recent blockchain gaming boom, but a modern report sheds a chilling airy on the sector’s sustainability. Of the 1,318 blockchain-based games introduced since 2021, as many as 407, or over 30%, have already been withdrawn or abandoned.

This raw statistic developed by BlockchainGamer.biz presents a picture of an industry struggling with fundamental challenges. Smaller, underfunded projects seem particularly vulnerable and often disappear quietly without any official announcement.

Will blockchain games become extinct? The main culprit

Financial constraints and changing market conditions are cited as the main culprits, suggesting that building a successful blockchain game requires much more than just buzzwords and tokenomics.

Covering the period 2021-2023, the report highlights a disturbing trend in the second half of 2023. For multi-chain games using multiple blockchain networks, the cessation rate was 17%. Single-chain projects were not exempt, with Binance’s BNB chain leading the way with an abandonment rate of 11%, followed by Polygon with 10%.

Source: BlockchainGamer

Ethereum, Sui, and Solana also experienced significant declines. These findings highlight challenges in blockchain games sustainability, which raises the need for deeper analysis of contributing factors such as technological obstacles, market dynamics and changing user preferences. Stakeholders must adapt strategies to ensure resilience in the rapidly changing decentralized technology landscape.

“High-profile casualties” like Goals, a game that reportedly raised millions before withdrawing from blockchain integration, further underscore the active nature of the industry. This change may indicate a maturing sector that will prioritize core gameplay and user experience over tokenized elements.

As of today, the market cap of cryptocurrencies stood at $1.725 trillion. Chart:  TradingView.com

Blockchain games have a arduous road ahead

According to Bitcoinist, citing research by bitcoin price tracker Coingecko, 75% of GameFi projects have failed. This economic downturn exemplifies the challenges faced by projects aiming to integrate these creative concepts into gaming and decentralized currency. It further highlights the challenges this intersection poses.

Source: Coingecko

Data shows that of the 2,817 games released between 2018 and 2023, only 690 maintain a decent number of busy players. If a Web3 game’s busy user count drops 99% or more from its peak, CoinGecko will mark it as a “failed” game.

The potential of blockchain technology to enhance gaming experiences remains enticing. In-game asset ownership, a unique digital economy, and decentralized governance structures remain tempting propositions. However, the current situation highlights the need for caution and critical analysis.

Source: BlockchainGamer

Questions about long-term sustainability, the true value proposition of blockchain integration, and the ethical implications of game mechanics for monetization require open discussions and an informed approach.

Looking ahead, the industry must address fundamental issues such as funding stability, developer expertise, and network-specific considerations. A focus on high-quality gameplay, crystal clear communication and responsible implementation of blockchain technology will be key to navigating the current turbulence and unlocking the true potential of this emerging frontier.

Only time will tell whether blockchain-based gaming can overcome these challenges and establish itself as a viable and enriching force in the broader gaming landscape. However, the lessons learned from this initial phase of experimentation and adaptation will undoubtedly shape the future of this intriguing but turbulent segment of the world of interactive entertainment.

Featured image from Freepik