Web3 marketing challenges and solutions for games

Is Web3 gaming dead?

While the controversy around Web3 gaming being “dead” makes for a compelling narrative, the reality is more nuanced. Web3 games are still in their early stages, and no single title has fully realized its potential yet.

It may not be so much that Web3 gaming is dead, as much as people are simply bored. With few new game launches, whether in alpha, beta, or full release stages, there’s simply not enough excitement to keep the community engaged. The Web3 space thrives on two things: product advancement and a strong market. With both in a stagnant phase, boredom naturally sets in.

Tokens and meme coins

Tokens add an additional layer of complexity to the question. Many Web3 games seem to be prioritizing tokenomics over actual gameplay, and this is causing dissatisfaction within the community. For gamers, it can feel like the focus is on the product rather than the player experience.

This focus on tokenomics is at least partly rooted in the meme coin zeitgeist. Recently, some VCs have shifted their attention away from Web3 gaming to meme coins, seeing more short-term gains in the latter. The pivot towards meme coins reflects the impatience of investors who have yet to see blockbuster results from Web3 games. However, Dan points out that this is a natural evolutionary stage for the Web3 space, and there’s still potential for a breakout leader to emerge.

Web 2.5: The quiet rise of hybrid games

Despite the negative chatter, there’s a quiet revolution happening in what some are calling “Web 2.5” games — those that blend traditional gaming elements with Web3 mechanics. These games are achieving a certain amount of success, particularly in the mobile gaming space.

For example, in 2024, Upptic helped one game bring in 500,000 players in its first month and another game is approaching a million dollars in revenue from mainstream players. These titles are taking lessons from both traditional gaming and Web3 – without being bogged down by token-first mechanics.

Off the Grid – which is currently in Early Access and has been at the top of the charts in the Epic Games Store – falls into this category of game as well. It includes Web3 infrastructure under the hood, but its developer – Gunzilla Games – made sure to release a fun, playable game before even considering a token launch.

The echo chamber of Web3 criticism

Ultimately, the narrative that Web3 gaming is dead may be more of an echo chamber fueled by key opinion leaders (KOLs) and Twitter discourse. While certain critics may be exposed to the wrong projects or have a narrow view of the industry, the broader landscape shows signs of resilience and growth.

Case in point: Solana was declared dead at $8/token, but has since rebounded. Web3 gaming might not be dead; people just need to shift their focus to the projects and teams that are quietly building.

While the hype around Web3 gaming may have cooled, it’s far from over. The industry is evolving, and with time, we may yet see the breakthrough games that will define the future of this space.

The investment model behind Web3 gaming’s struggles

The core issue plaguing the Web3 gaming industry may lie in its investment model. Over the past few years, Web3-native games have raised funding at staggering valuations. However, this model comes with a major caveat: games are often required to have a token tied to them, which serves as exit liquidity for venture capitalists (VCs). The problem is that this reliance on tokenization has become a double-edged sword for many game developers.

The Token trap

Most Web3 games have struggled to raise capital solely as game businesses. Instead, they’ve had to rely heavily on crypto-native VCs, who often mandate the inclusion of a token in the game’s ecosystem. The real issue arises when these tokens are launched before the game is even ready, leading to a collapse in token value. Many VCs view tokens as the product itself, rather than the game, which creates a misalignment of incentives. This approach typically results in a token dump on the market, harming the long-term potential of the game.

The sentiment within the mainstream gaming community also leans heavily against this model. Players and developers alike are frustrated with the focus on token liquidity over game development, leading to negative sentiment and a high failure rate among Web3 games.

Common themes among failed Web3 games

Several common themes emerge when analyzing why so many Web3 games fail. First, many of these games launch their tokens before having a fully developed product, which results in a lack of utility for the token. The token, in theory, is supposed to power the game economy by enabling the purchase of assets or providing in-game benefits. But without a game to support it, the token becomes nothing more than a speculative asset.

Additionally, VCs are often more focused on extracting liquidity from the token’s initial exchange offering rather than ensuring the game itself is successful. This short-term strategy benefits investors at the expense of players and the broader gaming community. As Upptic Web3 gaming expert Jerry Singer noted, “World of Warcraft didn’t launch just the auction house before the game was around it,” underscoring the absurdity of launching tokens before a functional game exists.

A glimmer of hope: Games doing it right

Despite the grim outlook for many Web3 games, there are some shining examples of developers who have successfully navigated this complex ecosystem. As noted before, Off the Grid has taken this approach. Games like Pirate Nation and Parallel have also demonstrated that launching a token after the game has been developed can create a more sustainable model. These games provided players with immediate utility for the token upon its release, allowing for in-game use that enhanced player engagement.

Another standout example is DraftKings with their Rainmaker program. By leveraging an already engaged user base and offering a product closely aligned with their core offering, DraftKings has successfully integrated NFTs into their platform without the pitfalls seen in many other Web3 projects. However, this model is difficult to replicate for most developers, as it relies heavily on an existing audience and brand loyalty.

Navigating distribution challenges for Web3 games

As Web3 gaming seeks mainstream adoption, there also exist challenges in scaling and distribution. This is a key area where Web3 projects face hurdles, but there are emerging solutions worth exploring – such as Web3 game launchers and PWAs.

MetaMask’s evolution: A potential game launcher?

One of the recent developments in the Web3 space is MetaMask’s move to integrate game launch functionality through its portfolio feature. While not a game launcher in the traditional sense, this addition allows users to discover and access games directly through MetaMask, effectively offering a single sign-on experience for players. With around 30 million daily active users, MetaMask’s potential to become a significant distribution channel for Web3 games is substantial.

This evolution is particularly meaningful because successful launchers, like Steam or Epic Games Store, historically required a hit game to drive widespread adoption. MetaMask already has a large, engaged user base, which could give it a head start in solving Web3’s distribution challenge. However, despite its potential, industry response to this development has been surprisingly muted.

The role of progressive web apps (PWAs) in Web3 gaming

Another distribution topic generating discussion is the use of progressive web apps (PWAs) as an alternative to traditional app stores. PWAs enable games to run directly in a browser without needing to be downloaded from Google Play or the Apple App Store. This approach can help developers bypass the strict policies and 30% revenue share typically demanded by these platforms.

However, there are mixed opinions about the scalability of PWAs. Some see them as a promising workaround for the limitations imposed by app stores, while others believe they remain a niche solution. Critics argue that mainstream users are accustomed to discovering games through established platforms like the App Store, Steam, or the Epic Games Store. For many, the convenience and trust associated with these platforms outweigh the appeal of sidestepping app store policies.

In terms of discoverability, PWAs may not be a viable solution. Instead, PWAs likely make the most sense as a monetization tool – allowing game studios to maximize the revenue garnered from their biggest spenders.

Centralization vs. decentralization in Web3 gaming

A significant challenge for Web3 games is the fragmented nature of digital wallets and user experiences. Players often need multiple wallets to access different games, creating friction that hinders widespread adoption. MetaMask’s game discovery feature aims to address this by providing a more centralized way for users to access games, similar to the role of app stores in the Web2 world.

Web3 gaming still lacks a unified platform where users can find a wide range of games, making the discovery process more cumbersome. For mainstream gamers, the ease of finding games through a centralized platform remains a key expectation. Thus, the industry may need solutions that blend Web3’s decentralized ethos with the user-friendly experience of traditional app stores.

Going where the gamers are

One thing that Off the Grid has done that other Web3 games have really failed to do so far, is to go where the gamers are. Generally, Web3 game developers market their games to crypto audiences in crypto-friendly spaces. Off the Grid released its game for PS5, Xbox, and PC and listed its game in gaming stores – such as the Epic Games Store. This approach, combined with a fun, enjoyable game – seems to be paying off for Gunzilla Games.

Scaling Web3 marketing: Strategies for games growth

Expanding beyond distribution, the next critical challenge for Web3 games is growth  — how to attract users and scale effectively. This involves a mix of strategies, from Web3-native marketing tactics to more mainstream approaches. In this section, we’ll explore what’s working in the Web3 space and where resources are best allocated, as well as the limitations and opportunities in crossing over to traditional marketing channels.

Web3 native marketing: Key strategies and pitfalls

When it comes to marketing within the Web3 ecosystem, understanding what resonates with the native community is crucial. Traditional paid user acquisition (UA) channels often fall flat in this space. Ads for NFT or Web3 gaming tend to evoke skepticism, with many potential users dismissing such ads as scams. As a result, it’s essential for Web3 projects to focus on more authentic, trust-building approaches.

Influencer and content creator partnerships

A more effective strategy in the Web3 space has been leveraging partnerships with content creators, key opinion leaders (KOLs), and influencers. These individuals often have strong, engaged communities that trust their recommendations. By collaborating with influencers who have built credibility within specific niches, projects can gain a valuable “stamp of approval” that resonates with their audiences.

Successful examples of this strategy include creating ambassador programs, launching targeted sponsorship campaigns, and forming long-term partnerships with creators who align with a game’s vision. This method not only helps reach a more receptive audience but also fosters organic growth through word-of-mouth and community engagement.

The challenge of bridging Web2 and Web3 audiences

An emerging opportunity lies in bringing traditional Web2 gaming influencers into the Web3 space. However, this approach comes with its own set of challenges. Many mainstream content creators are hesitant to associate with Web3 games due to the potential backlash from their audiences. For these creators, maintaining their reputation with their followers is paramount, and promoting a Web3 game too early could damage their credibility.

The opportunity lies in timing and product quality. As the quality of Web3 games improves and some projects prove their worth, traditional influencers may become more willing to explore partnerships. The key will be providing undeniable value and showcasing games that have reached a level of polish and appeal that matches or exceeds expectations. Once that happens, creators will have a stronger foundation to advocate for these games without risking audience trust.

Success stories: Parallel‘s and Off the Grid‘s strategic approaches

One of the standout examples in Web3 native marketing is Parallel. This game successfully aligned itself with well-known figures from the Hearthstone community, despite the initial backlash from some segments of that community. By building relationships with professional players and influential creators, Parallel managed to bridge the gap between the Web3 and Web2 gaming communities. This approach allowed them to gain the attention of traditional gamers, even if only a portion of the Hearthstone audience. Their strategy highlights the potential of a well-executed influencer engagement plan in Web3.

Where Parallel used a scalpel, Off the Grid used a grenade – but to great effect. They went after the largest streamers and content creators in shooting games and got several of them to showcase their game in front of their audiences. When people saw how engaging the game was, many other streamers in the genre – big and small alike – began playing it as well, creating a lot of earned media coverage for Gunzilla Games. While this strategy can be incredibly risky, for Off the Grid, it seems to have paid off.

Looking Ahead: Merging Web3 and mainstream marketing

While Web3-native tactics have their strengths, true scalability will require reaching beyond the core Web3 audience. The next step involves adapting mainstream marketing strategies to suit the unique dynamics of Web3 gaming. As games continue to improve and become more compelling, there will be greater opportunities to attract traditional gamers and their influencers. The challenge lies in finding the right balance between authenticity and broader reach, ensuring that marketing efforts resonate with both crypto enthusiasts and newcomers alike.

Content creators for Web3 marketing: Opportunities, challenges, best practices

The role of content creators and key opinion leaders (KOLs) in Web3 gaming has become a hot topic, particularly as the industry navigates a mixed landscape of opportunities and controversy. With new marketing dollars flowing into the Web3 space, content creators can find lucrative opportunities, but this influx of funding also raises questions about the authenticity and sustainability of these relationships. Here, we’ll explore the current state of Web3 content creators, the dynamics of successful partnerships with game teams, and key considerations for both sides.

A unique opportunity for Web3 content creators

The Web3 gaming sector presents a promising, albeit challenging, landscape for content creators. After a long period of limited monetization opportunities, the recent uptick in market sentiment has made it an advantageous time for those who are open to covering Web3 games. As mainstream content creators remain hesitant to engage with Web3 projects, those willing to take the plunge can benefit from a less crowded field and higher compensation.

However, this opportunity comes with a trade-off. Many content creators face scrutiny for promoting Web3 projects, especially as parts of the gaming community remain skeptical about the space. This tension has led to a situation where only a select group of creators are covering Web3, often facing criticism from their audiences for aligning with this emerging field.

The key to successful partnerships: Value and alignment

For Web3 game teams, building successful relationships with content creators is not just about finding influencers with large followings. The focus should be on creators whose values and audience align closely with the game’s vision and who are willing to commit to longer-term partnerships. A key red flag for game teams is a creator whose content feed is dominated by sponsored posts. Audiences often become fatigued with constant paid content, which can undermine the effectiveness of promotional efforts.

Instead, game teams should prioritize creators who have cultivated engaged communities and are genuinely enthusiastic about the Web3 space. These creators are more likely to bring authenticity to their promotions, making them more effective in reaching audiences who are receptive to the game’s message. A collaborative approach, where creators and game teams work together through various stages of a campaign, can yield more sustainable results compared to one-off promotions.

Advice for content creators: Focus on quality over quantity

For content creators, balancing opportunities in Web3 gaming with maintaining their audience’s trust is crucial. While lucrative deals may be available, creators are advised to be selective and prioritize partnerships that align with their content style and community interests. By focusing on higher-quality partnerships, creators can ensure that they’re providing valuable, authentic content that resonates with their audience.

As the market for Web3 gaming continues to mature, creators who establish themselves as trusted voices in this space are likely to see long-term benefits. This approach allows creators to build a reputation that goes beyond chasing the highest-paying deals, fostering a more loyal and engaged audience.

The value of smaller creators: Quality over quantity in Web3 marketing

One common misconception among Web2 marketers entering the Web3 space is the overemphasis on follower counts. Game teams may initially be surprised when recommended to work with smaller or mid-sized creators, but this strategy often pays off in terms of engagement and impact. The key metric to consider is not just the reach of a creator but the quality of that reach — how effectively the creator’s audience aligns with the target user base for a Web3 game.

In Web3 marketing, understanding the value of impressions is critical. While a creator with a large following might seem appealing, it’s the smaller, more niche creators who often deliver higher engagement rates and genuine interest from their communities. The concept of effective cost per thousand impressions (eCPM) becomes highly relevant here, as it measures the true value of a creator’s reach in terms of generating actual interest and engagement.

Tailoring campaigns for success: Data-driven insights

Building successful marketing campaigns in Web3 requires a data-driven approach, especially when it comes to working with content creators. Impressions in Web3 can vary widely in quality, making it essential to tailor campaigns to the unique dynamics of each creator’s audience. By leveraging data and past campaign results, game teams can identify which creators are most likely to resonate with their target users and optimize their marketing spend accordingly.

The role of creative in Web3 marketing: Strategy, content, and adaptability

In the Web3 gaming space, creative content is a crucial element that can make or break a project’s success. As the landscape evolves, it’s essential for Web3 gaming teams to develop a robust creative strategy that engages both native Web3 users and potential mainstream adopters. Here, we’ll explore the role of creative in the success of Web3 gaming projects, the types of content that are most effective, and best practices for maintaining a dynamic creative approach.

Creative at the core: Integrating strategy and content

Creative efforts should be a fundamental part of a Web3 gaming project’s strategy from the very beginning. Creative needs to be involved at every stage of development and growth. This means shaping the brand narrative, establishing the visual identity, and aligning the creative vision with the game’s core values and community expectations.

One of the biggest challenges for Web3 founders is the multitude of responsibilities they face, especially when interacting with an often-demanding community. This can make it difficult for them to prioritize creative work. However, having a strong creative foundation can help communicate the game’s unique value proposition and maintain engagement with both current users and potential new audiences.

Effective content strategies: What works for Web3 gaming?

A successful content strategy in Web3 gaming hinges on consistency, adaptability, and relevance. To maintain a consistent presence, a two-week content calendar can be a valuable tool. By planning daily content releases over a two-week period, teams can ensure a steady stream of engagement, while also leaving room for timely adjustments. This approach allows for flexibility, enabling teams to capitalize on trends or viral moments within the Web3 space.

Content types that often resonate well include:

• Behind-the-scenes content: Showcasing development updates, sneak peeks, and team insights can help build trust and foster a sense of community.
• Educational content: With Web3 concepts still unfamiliar to many, creating content that educates users about how to interact with blockchain elements, NFTs, and game mechanics can be a valuable addition.
• Community spotlights: Highlighting user-generated content or celebrating community achievements can strengthen the connection between the game and its players.
• Memes and viral content: Web3 gaming moves quickly, with new trends emerging regularly. Being able to pivot and create content that taps into these trends can draw in new users and keep the community engaged.

Community management challenges: Balancing demands with creative output

One of the unique aspects of being a Web3 project founder is the direct and often intense interaction with the community. Unlike Web2, where communication channels may be more limited, Web3 communities often have a direct line to the project’s leaders. This can be both an advantage and a challenge, as community members tend to have high expectations and can be quick to demand new features or improvements.

Maintaining healthy creative output amid these pressures requires a strategic approach to content. By planning and maintaining a content calendar while allowing flexibility for current trends, teams can better manage community expectations. Additionally, creative content can be a powerful tool to redirect the conversation and keep the community focused on the positive aspects of the game’s development and future plans.

Adapting to the fast-paced Web3 space

The Web3 space is known for its rapid pace, with new trends and viral events emerging almost weekly. This dynamic environment presents both opportunities and challenges for game teams. By staying on top of industry developments and being ready to adjust their content focus, teams can leverage these moments to draw attention to their projects.

For example, when a new viral trend or hot topic emerges in the Web3 space, game teams can create content that ties into the conversation, redirecting the newfound attention back to their own project. This approach can significantly boost visibility and bring in new users, as it allows teams to tap into the larger engagement pie created by trending topics.

Future trends in Web3 marketing for games

As Web3 gaming continues to evolve, understanding emerging trends in growth marketing is key to staying ahead. The industry’s rapid pace means that strategies need constant adaptation to maintain relevance and effectiveness. Here, we delve into some of the current trends shaping Web3 game marketing, including social farming platforms, points farming, and the shifting dynamics between Web2 and Web3 user acquisition.

The diminishing appeal of points farming and play-to-airdrop

One major trend in 2024 has been points farming and play-to-airdrop models, where users are incentivized to engage with a game or platform in exchange for potential future rewards, such as tokens or airdrops. This approach has seen significant use, but there are signs that it may be losing its effectiveness.

The core challenge with points farming is that it can become more of a chore than a game, turning into a repetitive task for users who already have other commitments. This shift from fun engagement to laborious routine often leads to user burnout. Projects like Pirate Nation have found a way to sidestep this issue by integrating play-to-earn mechanisms directly into the game experience, offering rewards for playing the game rather than completing mundane tasks.

For long-term success in Web3 growth, projects need to go beyond the promise of future rewards. They must provide engaging experiences that retain user interest and enthusiasm. As the novelty of points farming wanes, the focus will likely shift towards richer, more interactive experiences that keep players coming back for the gameplay itself, not just potential rewards.

Bridging the gap: Web2 and Web3 marketing convergence

A notable trend in the Web3 gaming space is the growing convergence of Web2 and Web3 marketing strategies. As the market matures, successful Web3 projects increasingly incorporate best practices from traditional gaming, blending elements of both worlds. This includes the use of established user acquisition tactics from mobile gaming, such as targeting large-scale user bases and focusing on metrics like downloads and active user retention.

For projects with substantial reach, like those generating seven-digit download numbers and meaningful revenue, the future lies in building ecosystems that integrate Web2 user expectations with Web3’s unique features. Successful examples, such as Wildcard, demonstrate the importance of creating a holistic ecosystem around a game — one that includes not only the game itself but also components like esports, fan engagement, and immersive viewing experiences. These broader ecosystems are likely to be the source of the next big successes in Web3 gaming.

Challenges in the KOL landscape: High costs and authenticity concerns

The current state of key opinion leaders (KOLs) and influencer marketing in Web3 is another area ripe for change. While influencer marketing has been a powerful tool for Web3 projects, the space is facing challenges related to high costs and a perceived lack of sincerity among some KOLs. Many influencers are charging premium rates for promotion, often without delivering genuine engagement or alignment with the projects they endorse.

The market could benefit from a more structured approach to KOL engagement. A potential solution could be the development of a centralized platform that offers a streamlined, decentralized way for games to connect with influencers, making the process more transparent and fair. Such a platform could help manage expectations, provide clearer metrics for success, and create a better balance between costs and the value of influencer campaigns.

The shift toward measurable success

As the Web3 marketing space matures, there is an increasing demand for more accountability and measurable outcomes in marketing campaigns. Early-stage Web3 marketing has often focused on building buzz and capturing attention through top-of-funnel tactics. However, as the industry grows, the need for reliable metrics and quantifiable results becomes more pressing. This shift is likely to drive a move towards more data-driven approaches, where the effectiveness of influencer partnerships and marketing strategies can be more accurately measured.

Ultimately, the future of Web3 growth marketing will hinge on projects’ ability to balance novelty with sustainability. While new trends like social farming and play-to-airdrop have captured attention, long-term success will require a deeper focus on user engagement and value creation. Projects that can innovate while keeping user experience at the forefront will be best positioned to thrive in this evolving space.

Key Web3 marketing takeaways and strategies

In truth, the Web3 gaming ecosystem is still in its infancy, with many foundational elements yet to be fully developed. This emerging space has its share of both good and bad actors, making it critical for game developers to align with the right partners and strategies. The stakes are high — game launches come with limited opportunities, and working with untrustworthy partners or misallocating resources can quickly lead to failure. Here, we recap some of the essential advice for Web3 gaming projects looking to launch and grow successfully, focusing on innovation, user experience, and long-term vision.

Importance of partnering with experts

One of the biggest challenges in the Web3 space is the lack of established infrastructure for growth and marketing. Launching a game in Web3 requires careful planning and execution. Missteps in strategy or partnerships can waste precious resources and set projects back significantly.

With so many unknowns, having experienced experts on your team can make all the difference. Bringing in specialists who understand the intricacies of Web3 marketing, such as those at Upptic, can help ensure that valuable resources are spent wisely, campaigns are properly measured, and efforts are directed towards genuine opportunities.

Focus on user experience, not just numbers

As many Web3 games begin to focus on their marketing strategies, it’s crucial to remember that users are more than just numbers on a dashboard. Innovative and engaging user experiences should take precedence over tactics like daily farming or repetitive engagement activities. While these methods might drive short-term growth, they often result in user burnout and dissatisfaction, particularly if the rewards fall short of expectations.

Projects like The Beacon, Nyan Heroes, and Pirate Nation have demonstrated the power of prioritizing user enjoyment. By offering games that genuinely entertain and engage their communities, they’ve managed to maintain user interest and loyalty. The takeaway is clear: creating meaningful experiences will always outlast the latest trend.

Avoid chasing trends, stick to your long-term vision

In the fast-paced world of Web3, trends and market dynamics change rapidly. It can be tempting for game teams to pivot quickly, chasing the latest growth hack or trendy platform. However, the most successful projects are those that stick to their original vision, even as the market evolves. As noted, following the trends too closely can often leave teams behind the curve, especially in game development, where timeframes are longer and adapting to every market shift is impractical.

Instead, teams should focus on building a product that aligns with their long-term vision. Sticking to a well-defined roadmap and remaining true to the game’s core values will build a more loyal community. While it’s important to be aware of market shifts, chasing every new idea can distract from delivering the core experience that players are looking for.

Embrace innovation and be willing to fail

In Web3, innovation is a key driver of success. The best-performing projects are those that take risks to create new experiences, rather than simply copying existing models. It’s essential to think creatively and explore unique ways to engage players, focusing on what makes your game different and exciting.

Additionally, failure should not be feared in this space. The Web3 community is often more forgiving than traditional markets, especially if projects show a willingness to learn and iterate. If a strategy doesn’t work, there’s room to pivot and try again. Maintaining transparency with your community and showing a commitment to improving the game can help keep players on board, even through challenging periods.

Building a sustainable future in Web3 gaming

The Web3 gaming space is filled with both challenges and opportunities. By partnering with knowledgeable experts, focusing on user experience, resisting the urge to chase every trend, and maintaining a strong commitment to long-term goals, game developers can navigate this dynamic landscape more effectively. As the industry matures, the ability to adapt and innovate while staying true to core values will be the key to building successful and enduring projects.

If you’re looking to scale your Web3 game and need support in user acquisition, growth strategies, or creative production, the team at Upptic is here to help. Our expertise spans across all aspects of growth marketing, from analytics to creative solutions. Reach out to us through our website, and let’s work together to transform your game into a thriving and profitable business.