Roughly 93% of GameFi projects are now considered effectively dead, based on data shared by market maker Caladan and earlier sector research from ChainPlay and Storible. Across more than 3,200 Web3 gaming projects, the pattern is stark: token prices are down an average of 95% from all-time highs, while user activity has faded to near zero. The studies found that the average GameFi title lasts only about four months before its token falls more than 90% and daily active users drop below 100.
Token losses and user decline hit the sector at the same time
Caladan’s figures line up with ChainPlay’s conclusion that 93% of GameFi projects are dead. The category once attracted more than $12 billion in investment at its peak, but it has since become one of the harshest collapses in crypto. The damage goes beyond token charts. Once incentive-driven demand weakened, many projects saw retention break down quickly, leaving both on-chain activity and in-game economies unable to hold up.
The funding side shows the same retreat. Web3 game studio funding fell to about $859 million in 2024, down roughly 85% from the 2022 peak of $5.56 billion. By 2025, that decline had deepened to around 93%. Raising fresh capital became much harder, and many studios struggled to keep development moving at the same pace.
Venture capital shifts to AI, RWAs, and Layer 2 infrastructure
The collapse in funding reflects a clear rotation in venture capital priorities. Reports tracking deal flow show money moving away from play-to-earn models and into AI tooling, real-world asset tokenization, and Layer-2 infrastructure. Those areas are seen as having clearer product-market fit, while usage and fee revenue have held up better through the cycle.
A recent snapshot cited by Messari found that only 6 of 41 token sales since 2025 are currently profitable. That result points to how badly investors were hurt by high-emission, low-retention token models. One MEXC market note described 2025 as a brutal year for GameFi tokens, estimating the sector ended that year down about 75% and saying investor interest had largely been wiped out.
Some gaming chains and tokens have shown tentative recoveries in early 2026. Data providers, though, say those cases are exceptions rather than evidence of a broad rebound across the sector.
Animoca Brands cuts pure gaming exposure
Even one of the best-known backers of Web3 gaming is changing course. According to people familiar with its recent allocation changes and public remarks, Animoca Brands has made more than 380 Web3 investments, including The Sandbox, Axie Infinity, and Yield Guild Games, but has reduced pure gaming exposure to roughly a quarter of its portfolio.
The company has been leaning more heavily into tokenization services, treasury management, and stablecoin-focused products in search of steadier cash flow than volatile in-game economies can deliver. That shift suggests the pressure on GameFi is not limited to weak market sentiment; it also reaches the sector’s business models, user retention, and financing conditions.