BLOCKLORDS AMA: Why Player Retention Is So Different in Web3 Gaming

Recently, Gabby joined an AMA to discuss player retention in web3 gaming with BLOCKLORDS’ David Johanssen and Sam Rowlands, Pixelmon’s Giulio Xiloyannis, and Animoca Brands’ Tyler Durden.

Today, player retention is everything in the web2 gaming market, leaving a growing sector of its community wary of the flood of live service titles that prioritize long-term revenue over player experience. In web3 gaming, player retention is a direct result of positive player experience. YGG exemplifies this through its Guild Advancement Program (GAP) and Superquests. Unlike in web2 games, the initial incentive to complete these questing programs is a tangible reward system. YGG quests let players earn soulbound tokens on top of in-game rewards, helping them establish their onchain reputation while enabling YGG to recommend games that they will be likely to enjoy for a long time.

With such compelling rewards at stake, these quests consistently put players in a position where they’re encouraged to help each other achieve common goals. As a result, it’s only natural for players to develop real bonds among themselves over time, and maybe even organize into guilds. This gives them another layer of fulfillment to accompany their in-game progression and, more importantly, a more compelling reason to stick with games in the long term.

In light of the recently concluded GAP Season 5, which featured BLOCKLORDS on its roster, YGG co-founder Gabby Dizon joined BLOCKLORDS CEO and co-founder David Johanssen, Pixelmon CEO Giulio Xiloyannis, and Animoca Brands Head of Projects Tyler Durden for a BLOCKLORDS community AMA session hosted by BLOCKLORDS Marketing Lead Sam Rowlands. Throughout their conversation, Gabby, David, Giulio and Tyler all gave their perspectives on how to ensure games attract more long-term audiences. 

The following is an excerpt from the conversation, where the group discusses the promise of web3 from a player onboarding and retention standpoint, how web3 games need to foster player retention in an organic way, and the importance of keeping in-game economies insulated from external influence.

Listen to the full recording on X.

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David (26:29): Looking at game economies, it's a world of opportunities. I came from web2 games and the free-to-play space. The way they tend to look at free-to-play games is that there's an endless amount of ways to monetize users once they retain enough. I think for web3, what's really interesting is it's the same concept. There's endless ways to get users engaged and also to incentivize users. So whether it's having rare NFTs that give exclusive access, or having token rewards or leaderboards or Battle Pass requests or social elements, it's really just an endless opportunity.

For me, that's what's exciting, and that's what got me into building web3 games. Back in 2017, there was this idea that wherever we look, we see opportunities to add value with web3 assets. I think that's how users see it, too.

Users have started realizing both in the web2 and web3 space, “Oh, my attention matters. So what I spend my time with, I'm actually adding value to that ecosystem, I'm adding value by being a part of the community. I'm adding value by testing the game a lot. I'm adding value by breaking the game so that the devs can see it and plug it with patches.”

For me, that's the key. Building this exchange of value between the gamers and the developers and the communities and the protocols and the ecosystems. That's a very big part of it. So that's kind of how I look at the value of web games.

Gabby (28:13): You're dealing with two different economies when you're making a web3 game. One is your in-game economy, where people buy stuff in the game, sell stuff, trade, and then you have the broader crypto economy, which is basically trading your tokens, trading your NFTs. You have to realize that the greater crypto economy is always going to be larger than your in-game economy. Your game will always just be a subset of the greater crypto world, and there will always be more trading volume on exchanges than the number of people playing your game.

This presents a very unique challenge for game designers. If your assets are fully liquid and interoperable, meaning that, I can take them in or out of a game, trade them anytime, that means you're actually not in control of your game economy. OpenSea, Blur or Binance is in control of your game economy. As a game designer, you don't really want that. You want to have an in-game economy where you can have full control. 

And I think this is the problem from the original SLP in-game two-token model back in 2021 when the bull market happened, and the SLP price rose 100x. People started to have expectations that their time playing the game, earning SLP is worth this much in US dollars. But as that goes down, then you have the feeling that, “Oh, my time is being devalued by the game.” But the value of the token is actually not derived from the in-game economy. Most of it was derived from the trading volume happening in exchanges. So this really presents a very complex problem. How can you allow for trading within your game economy, but in a way, be able to insulate it from the external economy? From exchanges? A lot of game designers are thinking about this. I haven't really seen an approach that has worked, mainly because it takes a lot of time to create the economy that takes care of your internal economy and accounts for the external, broader crypto economy.

Giulio (30:03): I'm curious, Gabby. Why do you think the solution is not ultimately separating the two by pegging in-game assets and transactions to a more stable currency, whether it's USD or ETH, and letting the token be a volatile FX that can be used in-game.

My reaction to the problem has always been, as long as you have a currency that is more volatile than others, you'll always be at a disadvantage as a trading economy, and as such, you should ultimately consider pegging to another while letting your currency be the one that has an advantage. Meaning, certain items can only be purchased in your currency, or royalties or gas can only happen in your currency. Discounts are also a simplistic way towards it. I am curious why you think the solution isn't all that simple in the end. I wonder if the complex solution even exists, to be honest.

Gabby (31:55): I do think that is part of the solution, like having a lot of items just being purchasable in stablecoins, for example. I think that what happens is that the game loses part of the utility of their token if they do this. So they'd want those items purchasable in their token first. But if you have a mature economy in-game, I think it's better to have your internal economy priced to fiat, and then have the value of your token that represents the value of your economy, your governance token, be volatile without necessarily affecting in-game prices.

You can listen to the full recording on X.

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