The Great Collapse of Web3 Games: How Can the Industry Overcome Its Predicament?

Recently, several well-known Web3 game projects have announced their shutdowns, attracting widespread attention in the industry. These projects include the blockchain version of the game "MapleStory N" adapted from "MapleStory", the blockchain ARPG Tatsumeeko, the NFT game Nyan Heroes, and the blockchain FPS Blast Royale, among others. Even the highly anticipated MMORPG project Ember Sword suddenly closed after raising over $200 million.

The shutdown of this series of game projects has exposed many issues facing the Web3 gaming industry. Most project teams have stated that they were forced to stop operations due to the inability to secure the funding needed for continued development. Besides the lack of funds, the deteriorating market environment and the loss of players have also made it difficult to maintain operations.

In fact, the high failure rate of Web3 games is not a new phenomenon. According to research by CoinGecko, the failure rate in this field has been high since the emergence of GameFi in 2017. Among the 2,817 Web3 games launched between 2018 and 2023, approximately 2,127 have failed, with an average annual failure rate as high as 80.8%. Research by ChainPlay further indicates that 93% of Web3 games are already "dead".

However, the high failure rate is not unique to Web3 games. The traditional gaming industry also has a high project failure rate. According to a study by the ICT Institute, only 25% of the 100 successfully funded video game projects were completed and delivered on time or within an acceptable delay range. The elimination rate in the mobile game sector is even more astonishing, with data from SuperScale showing that the mortality rate of mobile games within three years is as high as 83%.

A unique challenge faced by Web3 games is their financing and operational model. Many projects adopt a "staged financing" model, relying on demonstrating sufficient progress and potential at each stage to attract new investment. However, in the current market environment, this model is difficult to implement. Factors such as sharp declines in token prices and user attrition have led to decreased investor confidence, making it challenging for projects to secure ongoing financial support.

Another issue is that some project teams lack sincerity, overhyping while neglecting the quality of the product itself. Taking Ember Sword as an example, the project once attracted 35,000 players and sold NFT virtual land worth a total of $203 million. However, the game visuals displayed were crude and rough, far below players' expectations, leading to a lot of criticism.

Web3 games are still facing the dilemma of the "player ownership" promise being difficult to fulfill. Although they claim to allow players to truly own game assets, in reality, these assets still highly depend on centralized game servers and developer support. Once the game is shut down, players' NFTs and tokens often lose their practical use and value.

Compared to traditional crowdfunding games, Web3 game investors feel a stronger sense of loss. In the traditional model, players usually invest a smaller amount and psychologically tend to see it as support for the developers. In the Web3 model, players directly invest large sums of money to purchase in-game assets or tokens, facing real financial evaporation when projects fail, leading to a stronger sense of loss and betrayal.

In the face of these challenges, industry insiders generally believe that Web3 game developers should first ensure the quality and playability of the game itself, rather than prematurely introducing tokens or NFTs for monetization. They need to return to the core elements of the game, such as characters, narrative, gameplay experience, and community interaction, to make the game truly enjoyable.

In general, for Web3 games to overcome difficulties, they need to return to value-driven principles and the essence of technology, balancing innovation with the core of traditional game development. Only by genuinely improving game quality can they attract and retain players, laying the foundation for the long-term development of the industry.