According to CoinDesk, data disclosed by market-making firm Caladan reveals that approximately 93% of GameFi projects are now effectively dead, with token values down 95% from their 2022 peaks, and game studio funding plummeting by 93% through 2025. Investment in Web3 gaming has nearly dried up, with capital shifting toward AI, real-world assets, and Layer-2 infrastructure, leading to the collapse of the gaming sector—even Animoca Brands, one of Web3’s most active investors, has reduced its gaming business to about 25% of its portfolio and begun pivoting toward stablecoins and other areas. Moreover, while 63% of Web3 venture capital funding in 2022 went to gaming, that figure has now dropped to single digits in 2025, with over 300 games announcing shutdowns, turning Web3 gaming into a cautionary tale of speculative frenzy overshadowing product-market fit.
93% of GameFi projects fail, with capital shifting to AI and RWA.
TechFlowShare
Summary
A new report from TechFlow shows that 93% of GameFi projects are now inactive, with token prices down 95% from their 2022 peak. Over 300 games have shut down, and Web3 gaming now accounts for only single-digit percentages of VC funding, down from 63% in 2022. Capital is shifting toward AI, RWA, and Layer-2 solutions. The Fear & Greed Index for the sector has reached a low, with altcoins to watch now focusing on AI-linked and infrastructure projects.
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