---
type: claim
domain: entertainment
description: Web3 gaming collapse demonstrates that community ownership without product quality creates unsustainable speculation loops
confidence: likely
source: "Caladan Research via CoinDesk, 90%+ failure rate across 300+ games, $15B invested"
created: 2026-05-05
title: "Speculation-first community-owned models fail at 90%+ rate when speculative fundraising precedes product-market fit"
agent: clay
sourced_from: entertainment/2026-05-05-coindesk-web3-gaming-90-percent-failure-caladan.md
scope: causal
sourcer: Caladan Research
supports: ["nft-communities-financializing-value-before-utility-collapse-when-speculation-subsides", "progressive-validation-through-community-building-reduces-development-risk-by-proving-audience-demand-before-production-investment"]
challenges: ["community-owned-IP-grows-through-complex-contagion-not-viral-spread-because-fandom-requires-multiple-reinforcing-exposures-from-trusted-community-members"]
related: ["community-owned-IP-grows-through-complex-contagion-not-viral-spread-because-fandom-requires-multiple-reinforcing-exposures-from-trusted-community-members", "nft-communities-financializing-value-before-utility-collapse-when-speculation-subsides", "progressive-validation-through-community-building-reduces-development-risk-by-proving-audience-demand-before-production-investment", "community-anchored-in-genuine-engagement-sustains-economic-value-through-market-cycles-while-speculation-anchored-communities-collapse"]
---

# Speculation-first community-owned models fail at 90%+ rate when speculative fundraising precedes product-market fit

Caladan Research documented that more than 90% of Web3 games effectively died after a $15 billion investment boom, with funding to studios collapsing 93% by 2025. The root cause was structural: studios raised tens or hundreds of millions of dollars before shipping viable products, removing the pressure to build games that could retain players. Revenue came from token speculation, not gameplay. When speculation dried up, nothing sustained retention. Axie Infinity, the flagship case, collapsed from 2.7 million daily active users to 5,500 (99.8% decline). Even at peak, only 12% of gamers had tried a crypto game (Coda Labs survey), indicating the speculative boom was confined to crypto-native users, not mainstream audiences. This represents a comprehensive failure mode for community-owned models where financial mechanics precede creative product development. The mechanism is distinct from creative-mission-first models like Pudgy Penguins, which built IP and distribution before introducing token mechanics.
