December 13, 2023
The early Web3 gaming ecosystem has now survived multiple crypto winters and is poised to transcend its nascent stage. With many major Web3 gaming projects launching in 2024, we strongly believe gaming will be a key Web3 mass adoption driver.
Tomer Sharoni
CEO at
Icon LinkedInIcon X
“Building good games is incredibly hard, successfully integrating Web3 elements whilst building a good game is even harder. We believe that the studios which balance this tension well have an outsized opportunity of cracking into the mainstream and potentially driving a new paradigm of Web3 gaming.“
Ben Naylor, BITKRAFT Ventures,
The State of Web3 Game Developer Tooling, July 2023

Web3 gaming today - Building & expanding, but not mainstream-ready

Most Web3 gaming studios are early-stage, with one or a few live games, and slow-growing organic user bases. Many will release games designed for mass appeal in 2024, but hope to overcome several adoption barriers by then.

While Web3 offers numerous advantages and benefits to both Gamers and Studios - Top Web2 games adding Web3 features face some common user experience and data challenges related to Web3. New innovations can address these gaps, removing user friction to widen the appeal of hybrid and fully on-chain games.

GAME7 Research, State of Web3 Gaming 2023

We describe the top challenges and innovations that now resolve them to propel Web3 gaming to the masses.

Challenge #1 – Unscalable tactics

Most Web3 gaming studios still use only organic, unscalable tactics for early growth due to a lack of Web3 behavior data. Not knowing ideal Web3 gamers’ profiles means marketing blindly without insights to optimize the right partnerships, influencers, messaging or personalization.

For the mostly early-stage studios, Web3-native tactics suffice for modest growth and budgets:

  • Partnership / co-marketing - Like-minded audiences for cross-selling, onboarding and learnings synergy
  • Airdrops - Direct on-chain token or NFT deposits to users (most go unnoticed)
  • Quests - Quest-as-a-Service (QaaS) tools add in-game tasks to spur engagement.
  • Early user perks - Entice tech savvy believers to be ambassadors with contests, referral, and other perks.
  • Guilds - Niche awareness, promotion and content partners for added liquidity and exposure

However, these tactics are too labor intensive and inefficient for mass marketing.

Challenge #2: Delivering a frictionless Web3 onboarding and gaming experience

Having on-chain actions in games entails high-friction onboarding: Users must create Web3 wallets and perform a Wallet Connect (WC) on your website to play. 

Another UX challenge is subtly incorporating NFT or native tokens into games. Like with wallets, extra setup may turn off users used to smooth gameplay. Top studios may delay mass advertising until UX meets Web2 standards.

Challenge #3: Estimating lifetime value and measuring results based on blockchain data

Even if you build a great game, you must also market it. To do so, you need to estimate user lifetime value (LTV) to measure ad performance. This is harder for Web3 vs Web2 games, which you install on PC, console or mobile. 

In Web2, you know a game’s retail price and can track in-game sales, acquisition cost (CAC) and LTV. If LTV is higher than CAC, a user’s acquisition cost paid off. Web3 games, being browser-based, have no install event. 

Those games have on-chain events, which tools like Google Analytics can’t track, and are free to play (F2P), so on-chain WC events don’t drive revenue. Many users also don’t spend in-game for weeks. This creates blind spots around LTV, so you can’t optimize ad ROI.

Challenge #4: Lack of blockchain data based insights for targeting and personalization

For your studio to efficiently reach ideal, high-intent users, precise targeting is key. Today, you lack tools to overcome anonymity by leveraging Web3 behavior data to build audiences and inform copy, creative and ad channel decisions.

“In traditional gaming, users are relatively easy to identify — they are attributed to a discrete install on a specific device...Because web3 games require a crypto wallet connection, to leverage the benefits offered by blockchain integrations, gaming companies need to be able to directly attribute wallets to players.”
Matt Dion & BITKRAFT,
“How Blockchain Gaming Founders Should Think About UA,” May 2023

New tech innovations enabling scalable growth and mass adoption for Web3 gaming

Thankfully, new data tools now exist to solve key adoption gaps. They combine advanced targeting, analytics and on and off-chain attribution to directly address Web3 gaming measurability and targeting gaps.

These tools fuse Web3 data from top blockchains and social data, helping you target ideal users off-chain based on their on-chain activity. You can also track and attribute user journeys on and off-chain end-to-end. You finally know ideal Web3 users’ profiles and can make data-driven decisions to optimize mass market ad spend and improve ROI substantially.

Innovation # 1: Wallet innovations abstract wallet creation from user onboarding

New smart contract and wallet tech innovation now allow you to abstract away wallet creation from user onboarding. Users can now seamlessly onboard to your game with smart, “invisible” pre-generated wallets.

Invisible wallets allow you to manage wallet creation back end, for frictionless wallet creation. Smart wallets improve user experience by letting users set time-based spending limits, allowing you to subsidize user fees with gasless transactions and more.

Innovation # 2: Web3 behavior insights enable you to use historical on-chain activity to estimate LTV

New data tools help you estimate Web3 game user’s LTV by analyzing historical on-chain spending of known Web3 gamers in order to more credibly forecast and set paid ad budgets.

Innovation # 3: Insights on Web3 behavior of actual game users to create optimal target audiences

New insight tools also give you behavioral insights about users’ Web2 and Web3 in-game actions that you can use to build target audiences around and optimize channel distribution, ad creative, and organic tactics.

We’re excited to be part of the UA analytics tech stack providing insights to help gaming studios smash through to mainstream adoption in 2024. We look forward to new major Web3 gaming titles purpose-built for mass-market users, and upcoming Web3 extensions to top Web2 titles.

This is some text inside of a div block.
This is some text inside of a div block.
Share this post

Your Web3 brand depends on effective marketing

Get the best return for your marketing campaigns

Book a Demo
Graphical user interface of the Addressable product