Wales' bid to win the IRB Gold Coast Sevens Cup ended in the quarter-finals when they lost 28-21 to South Africa.
Rhys Jones, Lee Williams and Chris Knight all scored tries for the Welsh while Jones kicked three conversions.
Paul John's side then lost 12-7 to Kenya in the plate semi-finals despite a try from Adam Thomas.
South Africa were beaten 24-19 in the semi-finals by Australia, who in turn went on to lose 40-19 to world champions New Zealand in the final.
England finished third after beating Fiji 26-12 in the last eight before losing 14-5 to New Zealand in the semi.
Simon Amor's side then scored seven tries in a record 47-0 play-off win against a tired South Africa in the third-place play-off.
The tournament on Australia's Gold Coast was the first of the 2013-14 HSBC World Sevens Series.
The series has introduced a new promotion/relegation structure as the sport anticipates its Olympic debut in Rio in 2016.
Wales are one of 15 current core teams and relegation from this group will be decided at the end of the season.
The bottom team will go down while the promoted team will be the winner of a tournament between 12 regional qualifiers.
The next round takes place in Dubai on 29-30 November.