Potential for Web3 Game to Break out of the Market
In the previous blog, we sorted out the current revenue and cost structure of Web3 Games, let’s take a look back at the relevant data of Web3 Games to find the potential for Web3 Games to generate further revenue. In fact, according to Footprint Analytics data: From April 2021 to the end of 2021, the number of Web3 Game Active Unique Users has been rising, reaching nearly 50 Million users at its peak. However, it has gradually declined since 2022, and there are currently only nearly 20 Million Users.
From a micro perspective, Stepn’s Profit and Daily Unique Active Wallets have been declining since May 2022, partly because it was banned by Chinese government.
In addition, from June 2021 to November 2021, the trading volume of the entire Web3 Game has been in an increasing trend, reaching a maximum of 5 billion dollars. Since the beginning of 2022, the trading volume of the entire market has begun to decline and has dropped to only 0.2 billion dollars.
To some extent, these data can directly reflect the instability of Web3 game revenue, and the positive correlation between the number of users and game revenue. This is because users in Web3 Games are playing games to earn, that is, out of investment purpose rather than consumption purpose.
So when the currency price falls, the number of users also drop dramatiscally, and the game studios’ income will no longer be sustainable. Therefore, we can judge that a sustainable Web3 Game requires a more stable revenue structure and a continuous growth of real player users. Further, the growth in the number of users should not come from the ponzi structure of the game itself, but from the desire of real gamers for game content.
Mobile Crypto Game is the Potential Future
What we need to admit is that the crypto games at the current stage is not only not enriched in the game content itself, but also not perfect in the infrastructure level. For players without any blockchain knowledge, the threshold for getting started with a crypto game is extremely high, and most blockchain games require players to have a corresponding NFT before they can play. In addition, the experience of these games mainly occurs on PC, and there are very few Web3 Games that can be experienced on the mobile end.
If we observe the development history of video games in human history, we can see that the development of video games has experienced the development of arcades, to consoles, to PCs and then to Mobile, and with the popularity of Mobile, the Free to play model is becoming more and more popular. F2P model further lowers the threshold for players to enter the game, thereby expanding the number of players in the game world, and, of course, the income of game manufacturers.
Taking the birth of the first computer game in 1952 as the starting point for development, the game industry has developed for 70 years, and the traditional game business model has gradually changed from a buyout system and a point card system to today’s f2p model. Although the free-to-play game model appeared before 2010, it has finally matured in the past 12 years. Traditional gamers have become accustomed to the free-to-play business model after a long period of behavioural accumulation. Taking NFT as the game threshold will make traditional gamers at a loss.
In addition, there are certain drawbacks inherent in using NFT as the game threshold: at the beginning, when there are more and more players or speculators and the number of NFTs is limited, the price of NFT will rise, thereby attracting more speculators and making the price of NFT rise higher and higher. In this case, the proportion of speculators will be too high, and Web2 players will be gradually excluded.
If Web3 Game can continuously attract Web2 players, capture more users who participate in the project for the purpose of playing the game, and allow players to have the same experience as a gamer entering the traditional game, then players’ in-game spending will not be solely for investment purposes, but as consumption in the game.
In this scenario, players will not pay too much attention to the price of assets, and the income of the project party will not have such a strong correlation with the price of assets. There is no need to go to great lengths to maintain the stability of currency prices and assets!
Take a closer look at the rapid changes in global mobile game revenue growth:
According to Newzoo’s data and analysis reports , it can be seen that as of 2022 , the market share of mobile games in traditional games has accounted for 50% more than , which shows the profit potential and market size of mobile games. And further, if we split the revenue of mobile games , it can be mainly divided into three parts:
In-App Purchase , the highest proportion, accounting for 53.6% in 2022
In-App Advertising , slightly lower than in-app purchases, accounting for 46% in 2022
Paid App , accounting for a small proportion, almost negligible .
In-App Purchase and In-App Advertising are the main sources of revenue for F2P games, so these data also show that F2P ‘s business model has dominated traditional games. According to Superdata 2020 , it can be seen that free games can generate the vast majority of revenue (78%) .
Therefore, combined with the above discussion, we believe that Web3 Game can create more stable income on the mobile end, where it lowers the threshold for players to enter the game, and expands more user base with the F2P model. Further, add NFT Sell and transactions to the game, thereby increasing the proportion of In-App Purchase. (Of course, this also involves the design of Tokenomics, which we will discuss in later articles)
Improving the Web3 Mobile Gaming Experience
Now that we have a general direction, we need to discuss the problems and solutions that may be encountered in the development process to improve mobile gamers’ experiences.
Web3 Mobile Game Problems Today
High user access barrier and high education costs
Users have to go through a series of tedious steps before they can access the game. Besides, for users without any blockchain experience, there is also a very complex cost of understanding. All of these will lead to a significant loss of users.
In-Game Interaction with Blockchain
It is difficult for players to interact directly with the blockchain in the game.
Within the game, it is difficult for players to confirm contracts and complete transactions directly. In addition, frequent contract confirmations during the game can interfere with the player’s normal gaming experience.
Out-of-game marketplace will interrupt the player ‘s experience
The In-Game Marketplace is a key component of Web3 Game and is used to provide players with a trading service for in-game core chain assets. If Marketplace is not built into the game and players have to go to a third party to make purchases, then this can lead to a decrease in the rate of in-game asset purchases.
Third party marketplaces are not game friendly: However, third party marketplaces such as Opensea or Magic Eden do not provide a good representation of the properties of some in-game assets.
High Risk and Cost to develop: It is very challenging for every game developer to develop their own NFT Marketplace, which requires a lot of time and capital costs, as well as the security of asset transactions.
Mirror World offers a solution that allows users to log in with traditional social authentication (Google, Discord, Twitter, Email, Apple and so on), and a crypto wallet is automatically tied to the users to help them interact with the blockchain during the game:
Easily Build Mobile Marketplace
Mirror World offers a Mobile Market SDK that allows you to easily build a built-in NFT Marketplace, enabling users to buy and sell game NFT assets directly from within the game
Conveniently Interact with Blockchain using In-App Wallet
Mirror World provides an In-App wallet to help users purchase and trade on-chain assets directly within the game.
Zero-Code Launch Your NFT
Mirror World provides tools to launch, mint and trade your NFT without writing code:
In the discussion and judgment of this article, there are many details that have not been taken into account due to word limitations. We just provide a general idea of the development of Web3 Game, as well as the problems that may be encountered in the implementation process and what solutions we can be provided. In the long run, Web3 Game also needs us to continuously build together, so that Web3 Game content can bring more utility value to players, LFG 🔥 !
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