Web3 games are dead? The one-week user retention rate of active projects still exceeds 40%

Author: Footprint Analytics

Compiled by Deep Tide TechFlow

There have been some discussions recently about whether blockchain games are dead, and both sides have good points. Let’s analyze it from a data perspective.

Active Games

As of May, 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 standard is raised to 10,000 MAU, this number would significantly decrease. It should be noted that these data only include on-chain users. Many games allow users to play without wallet login, while still including Web3 elements. Currently, obtaining this part of data is difficult, which may affect the statistical count of actual players.

Daily Active Users and Volume

In May, the daily active users (DAU) of Web3 games increased by 9.6% to reach 3.3 million users, but the transaction volume decreased significantly compared to April (decreasing by 390 million US dollars). The growth of 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 the game is interesting enough to incentivize players to spend money. Users tend to value extraction rather than investment when playing without contributing to the game. The correlation between the average user’s game time and transaction volume in May is worth further exploration.

The reason for the high rise of new users but low transaction volume

The recent implementation of the ‘play games to receive airdrops’ mechanism in games may be the main cause of this phenomenon. Although the short-term effects are good, in the long run, it may have a negative impact on the project. The practice of using incentive measures to attract user retention is helpful in improving metrics, but without a solid game foundation, token selling may occur after the airdrop ends, just like a single token economic model, which may lead to an irreversible death spiral.

Retention Rate

Retention rate is one of the best indicators to measure the fun level of a game. In traditional Web2 games, the benchmark for retention rate is: Day 1, 30-40%; Day 7, 20%; Day 30, 5-10%. In Web3, these retention benchmarks are harder to achieve, but there are also some games that perform well in the Day 7 retention rate. Here are some examples of games with daily active users exceeding 50,000:

• @ApeironNFT: 86,987 DAU; 7th-day retention rate 79.3%
• @StarryNift**:** 73,146 DAU; 7th day retention rate of 70.8%.
• @pixels_online：900,569 DAU; 7th day retention rate 65.6%
• @AxieInfinity: 63,385 DAU; 7-day retention rate of 42.1%
• @NineChronicles：83,360 DAU; 7th-day retention rate 40% (Note: Nine Chronicles has its own chain, not indexed by Footprint)

Based on the retention rate data of the above-mentioned games, it is incorrect to claim that Web3 games are dead. If we do not consider other indicators, we can even infer that Web3 games perform better than the traditional benchmark in terms of retention rate.

Current restrictions on adopted issues

• Speculation: The speculation of potential profits masks the true joy of the game.
• User Experience/User Interface: Currently, there is a lengthy registration process, complex and difficult-to-use interface, and unattractive appearance in Web3 games.
• Time: Due to limited resources, games are often forced to be released before they are fully polished, and compared to traditional standards, the development time of Web3 games is longer, and many excellent Web3 games have not yet been released.

Conclusion

At this stage, it is both right and wrong to say that Web3 games are dead. Games have always had a short lifespan, and this is especially evident in Web3. This can be seen from the comparison between active and inactive games. The number of daily active users in Web3 has recently reached a historic high, but are these users the ones the industry expects? While the retention rate is high, it is limited to a few games, and many games lack enough daily active users to truly measure this indicator. Ultimately, many of the problems that existed in the early stages of Web3 games are still visible, but these issues will be addressed over time. In addition, small games on platforms like Telegram provide a good example of quickly and effectively guiding new users into the game. Blockchain does not need to revolutionize games, it just needs to improve them.

Web3 games are not dead, Web3 game development is underway…