In 2022, when winter devastated the crypto world, the gamification of finance became a rapidly growing trend. Many analysts saw the combination of gaming and DeFi as something with enormous future potential. Just two years later, the GameFi sector is in a state of decline.
The latter is the result of research by the firm ChainPlay, which describes that the sector can practically be described as dead. A recently published report offers some details on the status of projects related to this area.
It is worth noting that the report places those projects whose tokens are 90% or more below their maximums in the “dead” category. Likewise, these projects must have 100 or fewer users. The work analyzes a total of 3,279 GameFi blockchain-based projects. All data collection for this research was carried out in November 2024.
Among the results, it is noteworthy that an average of 316 such projects are created each year. Of these, 262 disappear or fall into the “dead” category. Meanwhile, 88% of GameFi sector tokens are 90% below their ATH. Meanwhile, the average duration of such a protocol is 4 months before it completely disappears.
Will the GameFi sector disappear completely?
Judging from the data from ChainPlay's work, it can be said that GameFi needs a complete restructuring. The short life span of the projects makes it difficult to attract investment capital organically. In this sense, the push for some of these protocols is purely speculative.
The fact that 9 out of 10 projects in the field are currently abandoned reflects that the sector is on the way to extinction. Very few investors have worthwhile profits. Among them are retailers who injected capital into initial decentralized offerings (IDOs), which boast a ROI of 15%.
Meanwhile, venture capitalists are the ones who are bearing the brunt. The fact that tokens from these platforms are so far from their ATHs suggests that there is not enough demand for them. People are therefore choosing to skip them and invest in other tokens from projects that are now offering better returns, such as AI tokens and others.
The GameFi sector is one of the great promises that failed to reach a high level of demand for a long time. It is likely that in a few years there will be a revival of this financial modality, but it will surely be under different conditions or after prior reform of the sector.
