tl;dr
A recent report by ChainPlay reveals that 93% of Web3 GameFi projects have failed, with their value dropping by 95% from its peak. Despite this, some VC firms have seen profitable investments. The report emphasizes the overall decline in the industry, with no area showing healthier returns. While re...
A recent report by ChainPlay has revealed that 93% of Web3 GameFi projects have failed, with their value dropping by 95% from its peak. Despite this, some VC firms have seen profitable investments. The report emphasizes the overall decline in the industry, with no area showing healthier returns. While retail investors saw an average profit of 15%, institutional investors experienced higher returns, with VC profits averaging 66%. However, the top-performing VC firm, Alameda Research, achieved a 713.15% ROI, but its controversial involvement in fraud makes its strategies non-replicable.
Overall, GameFi investments have decreased by over 84% from their peak in 2022. ChainPlay released this grim analysis of the GameFi industry on its blog this week. Essentially, the peak of GameFi funding and enthusiasm was in 2022, but most businesses proved completely unsustainable. Even well-publicized airdrops this year have not arrested this stark decline. These statistics are so damning that the report doesn’t claim any area shows healthier returns.
Nonetheless, ChainPlay was very clear that profitable returns do exist. Retail investors saw an average profit of 15%, and the report stated that “the aspiration of achieving financial success with GameFi has transformed into a terrifying reality” for these small-time users. Institutional investors, however, saw much higher returns. Venture capitalists (VCs) saw average profits of 66%, suggesting that strategic bets can pay off despite broader market difficulties. The highest-performing VC firm, however, was the controversial FTX spinoff Alameda Research, which saw a 713.15% ROI on its investments. Considering the massive fraud that Alameda was involved in, its GameFi strategies are hardly a replicable model.