This sponsored article is part of a Newzoo research project with Crypto.com. You can find more insights from this research here.
Blockchain technology is becoming increasingly prominent, boosted by hype around Web3 and the metaverse. Despite blockchain being in its infancy, it has already become a prominent (and polarizing) part of the gaming ecosystem.
While blockchain games currently lack the large audiences traditional AAA titles attract, their potential to change the way players own, share, and trade game content is potentially huge. That’s why we worked with Crypto.com on Custom Consumer Research, surveying gamers in the U.S., U.K., and Indonesia.
Together, we looked at the potential of blockchain gaming and which barriers it needs to overcome to hit the mainstream. We found that while the Play-to-Earn (P2E) aspect of blockchain games sounds appealing to some gamers, it is unlikely to be enough to convince a wider audience on its own.
Almost by definition, players are looking for something fun and engaging to play. Therefore, P2E components should be supplementary to the game (not core to it).
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Gamers Are Generally Open to Blockchain Gaming
Another major challenge for the mainstream acceptance and adoption of blockchain gaming is a lack of knowledge of its underlying technology: the blockchain. Blockchain awareness needs to grow before larger numbers of gamers will want to jump in.
Despite this, our survey results show that 40% of gamers across the U.S., U.K., and Indonesia are interested in blockchain games and will likely try them out this year. However, it makes sense to split this group further.
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Around 5% of gamers say they are highly interested in blockchain games, which we will refer to as high-opportunity prospects. Meanwhile, over a third (35%) of gamers are moderately interested in participating in blockchain gaming.
The sheer number of these medium-opportunity prospects means they are vital to the sustainability and success of blockchain games, but there are many barriers to overcome before they fully embrace blockchain gaming.
Education and Generalizations Are Barriers to Entry for Mainstream Blockchain Gaming Adoption
Medium-opportunity prospects say they are less interested in topics such as finance and cryptocurrency. Just 12% of this group lists crypto as one of their main interests, compared to 43% of high-opportunity prospects.
This also translates to a lack of knowledge: just 33% of medium-opportunity prospects say they have a basic knowledge of blockchain games (vs. 50% of high-opportunity prospects).
We also asked respondents what would encourage them to play blockchain games more. Roughly 44% of medium-opportunity prospects and 33% of high-opportunity prospects answered that they would need more knowledge about crypto and NFTs:
Lower cost of entry tops the list of requirements for medium and high-opportunity prospects alike. This is likely a misconception due to headlines about games like Axie Infinity, which require a hefty upfront payment to play. The reality is that entry costs for blockchain games are decreasing, and high-fidelity free-to-play blockchain games are already in development.
Linked to this, 46% of medium-opportunity prospects say their main barrier to entry is a fear of losing money vs. 32% for high-opportunity prospects. Therefore, informing gamers about the monetary risks of blockchain gaming is necessary to help participation grow.
Balancing Fun and Profit: Catering to Different Groups’ Needs
Typically, when a player is looking for a new game to play, they seek fun, exciting, and engaging experiences. However, things are a little different for blockchain games—depending on the group.
When given a choice between fun and profit, medium-opportunity prospects (49% of gamers) are more likely to choose fun, while high-opportunity prospects choose profit.
Both fun and profit are integral to blockchain gaming for all groups, but profit is what sets blockchain games apart from other core and casual titles.
However, as the market stands right now, many blockchain games lean heavily on the earning aspects of Play-to-Earn. Shifting that balance towards playing can act as a user-acquisition tool, especially for the fence-sitting medium-opportunity prospects (which offer up the biggest opportunity in terms of their absolute numbers).
Growing the Player Base Organically with Fun
Earning is less important to the largest group of prospects, so any company focusing solely on earning will find it difficult to meaningfully grow its user base. In the past, many blockchain gaming companies have allocated too many resources to the crypto economies of their games but neglected something very important: the game and its sustainability.
For in-game economies to grow sustainably, some players must be willing to play for fun—and even pay for the experience in some cases—so that others can earn. Critics calling blockchain gaming a gimmick might be rebutted if the games themselves were high quality and could keep players engaged even without their blockchain elements.
What’s more, when we asked respondents what would encourage them to play blockchain games, they consistently said more engaging AAA-like graphics and gameplay mechanics.
Additionally, they specifically mentioned popular genres such as adventure, arcade, and puzzle games would entice them. These genres are underrepresented in current blockchain games.
Educating potential players to improve their knowledge is one strategy to increase participation in blockchain gaming, but another—arguably better strategy—is to make high-quality games that ‘’just happen’’ to feature the blockchain—Play-and-Earn not Play-to-Earn.
In fact, directly mentioning the terms “blockchain” and “crypto” in consumer-facing announcements can lead to fan outrage, which happened with Ubisoft, Discord, SEGA, Team17, GSC Game World—the list goes on.
Therefore, for well-known AAA publishers, it makes sense to minimize the crypto elements in public announcements but talk about them openly in investor calls. A reasonable start is to put less emphasis on terms like “blockchain”, “crypto”, and “NFTs” in public communications, as these terms might discourage some core gamers and cryptocurrency laypeople.
The less friction a blockchain game creates, the better—in messaging and in the game. For example, nearly half of medium-opportunity prospects say setting up a crypto wallet is a barrier to playing blockchain games. Publishers of blockchain gamers need to streamline—or even gamify—this process to acquire more players.
Normalizing and streamlining the use of cryptocurrency in gaming has obvious benefits for blockchain game makers.
To conclude, there is still a long way to go for blockchain games to make their way into the mainstream. Not only will this depend on the success and awareness of crypto and NFTs in general, but also on whether developers can build fun, affordable, and—above all—accessible experiences.
In the best-case scenario, gamers will soon be playing blockchain games for the sheer fun of it, while game economies will thrive via a healthy mix of in-game spending and earning.
However, this scenario requires seamless integration of gameplay and technology, especially for first-time users. Convenience is now integral to the gaming ecosystem, and any successful gaming segment—blockchain included—must adhere to it.
Want to learn more about how Newzoo can help you with your blockchain gaming journey? Let’s talk!
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