8 min read

From Ads to NFTs: How Web3 Gaming is Reinventing User Acquisition

Joseph Cooper, Founder and CEO of Earn Alliance, share his thoughts on how web3 gaming is reinventing user acquisition.
From Ads to NFTs: How Web3 Gaming is Reinventing User Acquisition

The past 10 years, I’ve been building iOS and Android games in the web2 world. There have been 20m downloads across games my team and I have built - Dueling Blades, Eatme.io and Junglee Teenpatti. In between, I also had a stint at a major US Adtech firm, so I’ve looked at user acquisition from the lenses of a “customer builder” for games and from a more macro-view of enabling advertising to power the internet.

Now, Earn Alliance is my recent pivot into publishing and designing web3 games, starting with Last Remains (a AAA zombie apocalypse battle royale).I believe Web3 has completely revolutionized the traditional game industry’s user acquisition playbook so far and there are many features that have yet to be developed to make it even better.

The traditional game industry’s user acquisition toolbox

In the early days of online PC gaming, user acquisition was primarily driven through word-of-mouth and in-person events like LAN parties. I’m proud to say I was there to witness this in my childhood.

LAN Parties: before Twitch was a thing

I remember one of my favorite games in the 90’s was Doom 2, which released in 1994 on the eve of the internet becoming widely available. Doom 2 was published by id Software, the game’s developer, and distributed by GT Interactive Software. The game publisher was paramount in marketing the game and getting it onto store shelves. The company also created a demo version of the game that was distributed via shareware, allowing players to try out a portion of the game for free before deciding whether to purchase the full version. This was a common marketing strategy for PC games at the time.

When mobile gaming took off with the arrival of the Apple App Store in 2008, user acquisition became easier and was primarily driven through digital ads and social media marketing. It only took a few years for new channels to emerge, such as influencer marketing and rewarded video ads.

Enter Web3 Games

The most notable traditional user acquisition method that closely relates to NFTs today is Kickstarter. Games like Star Citizen or Exploding Kittens collectively raised more than 10M USD before the product fully got off the ground.

User acquisition in web3 gaming is still a relatively new and evolving field. Game developers are experimenting with a wide range of approaches and techniques that mirror Kickstarter’s approach, with the added benefit of NFT’s potential to be sold on secondary markets, thus giving developers creator royalties in perpetuity.

This is beginning to give birth to a completely new set of strategies and way of thinking about user acquisition - let’s explore this.

Is building a community a prerequisite for launching a successful web3 game?

What blows people’s minds in the traditional gaming industry, is that web3 games put so much emphasis on building a community before the game is launched.  In traditional web2 gaming, before Steam early access and Discord took over the world, the developer’s focus was on creating a game with fun and smooth gameplay, then in theory the community will follow. But first, we need to classify what games actually require communities to be successful.

In Andrew Chen’s book The Cold Start Problem, he discusses the challenges around building network effects for a startup. Some of his best examples are multiplayer games. Today, almost all web3 games need to be considered multiplayer in order to actually have someone you wish to trade digital currencies or collectibles with! Thus, a community is required for web3 games while most successful web2 games, after mobile came into the picture, don’t require game communities. Games like League of Legends, Counter-strike or Lineage 2 are games that require community building and liquidity of players to match up against in order to actually have fun. Although these games ultimately were extremely successful, the following was very hard to build due to the challenge of creating network effects that bring enough players together to compete against each other in real time.

On top of web3 game economies being challenging to build, congregating enough gamers together at the exact same time in the world to play is extremely difficult. But it is not impossible. Take the blockchain-based metaverse game, Star Atlas for example. Star Atlas is an MMORPG where players can explore and conquer space. It’s still listed as “Coming Soon” on Epic Games, but the game has already built a strong community of 300,000+ on Twitter, Discord, and Medium. From inception the game has updated and engaged potential fans so there is already significant buzz and anticipation before launch.

There seems to be a genuine interest in joining communities of web3 games, but time will tell whether web3 games are really able to take off as more games launch in the end of 2023/2024. This begs the question: why is there so much interest in the community element of web3 gaming?

The whole ethos of web3 is that games should be a decentralized world where players have potential for true ownership over their digital assets, and in some cases, the game organization itself. People have been buying into collaboration, transparency, and community-driven development elements of web3.

Ownership can come in the form of owning in-game NFT assets such as characters, weapons and wearables. The benefit of in-game purchases in a web3 game is that you can sell them openly on secondary markets outside of the game, which makes them true assets. Ownership can also come in the form of having a say in the decision-making processes of the game. In line with how Kickstarter took off by offering backers ownership, web3 games are doing the same.

Web3 is changing the way we think about content creation and distribution as well. With the rise of blockchain technology and decentralized networks, content creators are now able to receive referrals and a piece of the economy through token allocation.

NFTs as a reward for players to engage with a game

Converting traditional in-game assets into NFT collections is crucial to user engagement in web3 gaming. In-game items, such as weapons, armor, and other collectibles, take the form of NFTs to become real assets solidified on the blockchain. By offering NFT collectibles to players, developers can incentivize them to join the community or start playing the game.

Genesis NFT characters for our Last Remains game gets you early access, and when the game goes public, holders will have the power to earn and own all NFTs they find in-game

NFTs serve as a way to retain users as well, as you can reward users for their engagement and participation in games. Games can reward users for completing certain tasks, winning matches, or achieving certain milestones. These rewards can be traded on blockchain-based marketplaces, creating a new form of digital ownership and value that can be used to attract and retain users. Imagine if people were able to collect NFTs for clicking on traditional ads… That’s pretty much free mints for you!

Similar to traditional gaming, blockchain games have also embraced referral programs, but with a web3 twist. For example, QORPO Game Studio (makers of Blockchain FPS game Citizen Conflict) have a referral program where you get 5-10% in royalties for every instance the person you referred buys an NFT.

By offering NFT-based rewards or other incentives for successful referrals, web3 games can tap into the power of social networks to drive user acquisition and growth.

Acquire new users by launching an NFT collection on a launchpad

Once the game is playable, game developers can use NFT launchpads to do highly targeted user acquisition.

Launchpads are platforms that allow developers to offer free or paid mints of their NFTs to a targeted audience. For example, Earn Alliance’s launchpad exclusively offers gaming NFTs that have real in-game utility, so any game that launches an NFT here would be targeting a gamer audience.

Launching an NFT on a launchpad for user acquisition is much more interactive than traditional advertising methods. The audience has to complete “Missions” such as linking their socials, linking their Metamask wallet, or even more complex missions such as downloading the game and reaching Level 6. Upon completion of these Missions, the user can mint the NFT (only if they’re fast enough, because there’s always a limited supply). So even the process of minting an NFT is gamified.

Once the mint is successful, players actually acquire an asset to reward their attention, then are motivated to play the game to utilize their newly minted NFT.

It’s a win-win situation where the game acquires the user, and the user acquires an asset that can be used to unlock an exclusive part of the game.

Given the bear market that we’re in, I and many game studios are becoming huge advocates for free mints. Web3 Gaming is a very young industry with skeptics abound wielding magnifying glasses on us with hopes that we fail because we threaten the status quo.

For GameFi to succeed, we need to onboard traditional players to web3 games. So far we have pushed tens of thousands of users to play web3 games by offering free mints of badges and NFT collections on our launchpad, but there’s still much to do for GameFi to touch the lives of billions.

Final Thoughts

The changes that web3 has brought about to the gaming industry is so much more than how we think about in-game assets and ownership. Game developers had to completely rewire their thinking on user acquisition and retention, if they wanted to break into the web3 economy.

The three major ways web3 gamers are doing user acquisition differently are focusing on building a community before launching the game, using NFT collections to incentivize players to join, and leveraging NFT launchpads for targeted user acquisition. By adopting these strategies, web3 games are creating a more engaged and invested player base, which is essential for the long-term success of any online game.

That said, the web3 gaming industry up till now has failed to make games as fun as traditional games like Counterstrike, League of Legends and World of Warcraft. There is a lack of talent in this nascent GameFi industry - it’s not easy to find talent willing to navigate completely new waters of developing games with blockchain infrastructure and a reinvented user acquisition playbook. We have come a long way from the birth of Axie Infinity in 2018 till now, but today people are just beginning the journey of wrapping their heads around how to incorporate web3 into games while still making the game as fun and well engineered as traditional games.

But I can feel the tide is turning. I’m bullish that web3 games will reach critical mass - fun games powered by unreal art, awesome gameplay, community and ownership.