Is Web3 gaming dead? Active projects still have a 7-day user retention rate of over 40%

Original Title: 《The State of Blockchain Gaming Now》

Author: Footprint Analytics

Compiled by: Deep Tide TechFlow

Recently, there has been some discussion about whether blockchain gaming is dead, with valid points on both sides. Let's analyze this from a data perspective.

Active Games

As of May, the Footprint platform tracked 3,153 games, of which 263 games had monthly active users (MAU) exceeding 1,000, accounting for 8.2% of the total. If the threshold is raised to 10,000 MAU, this number significantly decreases. It is important to note that this data only includes on-chain users. Many games allow users to play without logging in with a wallet while still incorporating Web3 elements. Currently, this data is difficult to obtain and may affect the statistics of actual player numbers.

Daily Active Users and Transaction Volume

In May, the daily active users (DAU) of Web3 games grew by 9.6%, reaching 3.3 million users, but transaction volume saw a significant decline compared to April (a decrease of $390 million). The growth in DAU is a good sign, but this growth should also be accompanied by an increase in transaction volume. Transaction volume is an important indicator of whether a game is engaging enough to incentivize players to spend money. Users playing without contributing to the game are more inclined towards value extraction rather than investment. The correlation between average user playtime and transaction volume in May deserves further exploration.

Reasons for High New User Growth but Low Transaction Volume

The recently implemented "play-to-earn airdrop" mechanism in games may be the main reason for this phenomenon. While it has shown good results in the short term, it may have adverse effects on the project in the long run. Attracting user retention through incentives helps improve metrics, but without a solid game foundation, there may be token sell-offs after the airdrop ends, similar to a single-token economic model, potentially leading to an irreversible death spiral.

Retention Rate

Retention rate is one of the best indicators of how engaging a game is. In traditional Web2 games, the retention benchmarks are: Day 1, 30-40%; Day 7, 20%; Day 30, 5-10%. In Web3, these retention benchmarks are harder to achieve, but some games have shown excellent performance in Day 7 retention. Here are some examples of games with daily active users exceeding 50,000:

• @ApeironNFT: 86,987 DAU; Day 7 retention rate 79.3%

• @StarryNift: 73,146 DAU; Day 7 retention rate 70.8%

• @pixels_online: 900,569 DAU; Day 7 retention rate 65.6%

• @AxieInfinity: 63,385 DAU; Day 7 retention rate 42.1%

• @NineChronicles: 83,360 DAU; Day 7 retention rate 40% (Note: Nine Chronicles has its own chain and is not indexed by Footprint)

Based on the retention rate data of the above games, it is incorrect to claim that Web3 games are dead. Even without considering other metrics, it can be inferred that Web3 games perform better than traditional benchmarks in terms of retention rate.

Current Adoption Limitations

• Speculation: The hype around potential profits overshadows the true enjoyment of the games.

• User Experience/UI: Currently, Web3 games have lengthy registration processes, and the interfaces are complex, difficult to use, and unattractive.

• Time: Due to limited resources, games are often forced to launch before being fully polished, and compared to traditional standards, Web3 games have longer development times, with many excellent Web3 games yet to be released.

Conclusion

At this stage, saying that Web3 games are dead is both right and wrong. Games inherently have a short lifespan, and this is particularly evident in Web3, as can be seen from the comparison of active and inactive games. The daily active users in Web3 recently reached an all-time high, but are these users the ones the industry expects? While retention rates are high, they are limited to a few games, and many games lack sufficient daily active users to truly measure this metric. Ultimately, many of the issues present in the early stages of Web3 gaming are still visible, but these problems will be addressed over time. Additionally, mini-games on platforms like Telegram provide good examples of quickly and effectively guiding new users into games. Blockchain does not need to revolutionize gaming; it just needs to improve it.

Web3 gaming is not dead; the construction of Web3 gaming is ongoing…