Why the crypto crash was great for web3 games (and how to grow now)
It’s a downer if you owned crypto. A disaster if you invested in NFTs. A cautionary tale for those who always had some reservations. And yet another chapter in the history of economics for those who are students of business history from the Dutch tulip bulb craze in the 1600s to the dot-com bomb in early 2000s. But whichever segment you fall into, the crypto crash might have been the very best thing to happen to web3 games and apps.
- On November 6th, 2021, Ethereum hit $4,811.90 US
- On November 10, Bitcoin hit $68,789.63
- In December, NFT sales hit over 100,000 per day, with a total value nearing $200 million
Today Bitcoin is in the low $20,000 range. Ethereum is just over $1500. And NFT sales have dropped by over half.
That sounds like it would be bad for web3 apps and games. And let’s be honest, it isn’t amazing. Installs of web3 apps — at least wallets and NFT collectible apps — dropped significantly.
But some of the top experts in web3, blockchain, play-to-own, and collectible space say that actually, the crash wasn’t all bad. In fact, it might just have been a much-needed slap in the face that will ignite real innovation.
Web3 games and apps: next hot thing, or hot air?
We recently hosted a webinar on web3 apps and games with guests from Mythical Games, The Sandbox, Upptic, and Appvertiser. The goal: pull back the curtain on web3, identify what it means to be a web3 game or app, and share best practices for marketing web3 experiences on mobile devices.
- Anya Shapina, Head of Performance at Sandbox, a decentralized and open metaverse where people own, create, and monetize their assets and experiences on the Ethereum blockchain.
- Daniel Lopez, VP, Growth Marketing at Mythical Games, which offers free-to-play and play-to-own games on the Mythical platform, and believes that ownership of digital assets is the future of games.
- Warren Woodward, Co-Founder & CGO at Upptic, which is a gaming growth tech and services company whose partners include Axie Infinity and Kabam and whose team brings over 50M new players annually into the games they support.
- Hagop Hagopian, Founder & CEO at Appvertiser, which manages a portfolio of over $500MM in ad spend.
The crypto crash ‘cleared out the space’
No one disputes that web3, blockchain, and crypto has/had its share of grifters. The crypto crash wipes the slate a little cleaner for all the remaining web3 games and apps.
“It clears out the space. It gives us clarity. A lot of the projects that had no substance and had truly bad products are just going away and making room for better projects, for more sustainable, good games,” says Anya Shapina. “Communities are getting healthier and less hype driven. And what I also like is that the price points for entry [and] NFT prices are coming down, making it more affordable and easier for regular people to join the space.”
Less hype in web3 sounds like a prima facie good thing.
Now, perhaps, it’s time to get to work.
“The bubble has certainly popped,” says Daniel Lopez. “But, you know, markets ebb and flow. Things come and go. And we lived the hype for a little while. It was great. Now it’s time to get to work.”
Markets do ebb and flow. And the types of people that are just out to make a quick buck — whether or not it requires a good product or a good user experience — are precisely those that are attracted to super-hyped ecosystems. You know the type on LinkedIn: they were social media experts, then mobile experts, then crypto experts, and now they’re looking for the next new thing to be an insta-expert in.
The crash cleared those out, says Warren Woodward.
“Now that we’re past this really mania-speculation phase, it really does lead to a correction … if you’re still here if you’re building something, you’re probably building something because you value what the technology can bring to the table, not because you’re trying to make a quick few million bucks,” says Woodward. “So I’m quite bullish on just kind of like the reduction of noise afforded for us in this current dip.”
While few of us would say no to a quick few million bucks (!!!) the point is valid: for a healthy and viable ecosystem, we need to see web3 apps and games that do interesting things, provide real value, entertain people, and have a great user experience. We don’t need yet another randomly generated NFT collection, we need real spaces for creation, recreation, utility, and purpose.
So … how do you grow web3 games and apps?
It’s not easy and it’s not guaranteed, but there’s a recognized playbook for growing … shall I say traditional … apps and games. It involves targeting, ads, campaign optimization, ASO, SEO, creative optimization, and a lot of cash. (A great game or app experience is pretty much a prerequisite as well, and a bit of virality and influencer marketing doesn’t hurt either.)
But for web3?
Things are somewhat different.
First off, you have to understand who you’re targeting.
“Our marketing technique and our approach has to be completely differentiated,” says Shapina. “We don’t want to target a web3 crypto native the same way as a completely mainstream user, or a brand fan, or a person who has millions of dollars in their wallet account versus somebody who has just created the wallet account for the first time. They require a different marketing approach, different user journeys, and yeah, different onboarding experiences as well.”
Once you’ve identified that and built a campaign around your designated demographic, then it gets interesting. Part of how you market web3 games and apps is very different than typical games and apps, and part is very aligned.
“Early in the lifecycle, a lot of web3 projects just grow through community, through AMAs on Discord, says Shapiro. “Discord and Twitter is everything, [plus] sometimes Telegram … later in the lifecycle traditional marketing techniques and performance marketing become relevant as well.”
The first part of that answer has always been challenging to me personally, because you continually hear “it’s the community, it’s the community,” when we talk about growth in crypto, blockchain, NFT, and other web3 projects. Offloading the responsibility for growth onto a community is a challenging thing, especially if you’re brand new in the space and don’t … actually … have … a community.
What do you do then?
Growing from a million to 2 million fans is one thing. Growing from zero to a few thousand … that’s a substantially different challenge, and in many ways much harder because there’s no momentum. The ball isn’t rolling downhill.
How you beat the zero to one problem
So how do you start when you have nothing?
Borrow someone else’s community.
“As a founder, you are there doing endless AMAs,” Shapina says. “And partnerships too, right? Like you are actually doing AMAs with other communities. You get members from other adjacent communities into yours.”
And, you just do the work. Get on Twitter. Get on Discord. Get on Telegram. Connect with groups that might have an interest in the game or app you’re developing. Connect with influencers who might be able to galvanize a group around what you’re bringing to the table.
For early users who are native web3 people, this is essential. For those who aren’t web3 natives and devotees, there’s another strategy.
“There’s two distinct audiences,” says Woodward. “There’s that core, already in web3 audience. This group is highly educated, highly skeptical. They respond really poorly to ads. And then you have your mainstream player base, and there you can run more of a traditional growth marketing playbook that’s been established for years.”
Woodward, who started personally building web3 projects and partnering with people to educate himself on the space, realized early on he couldn’t use his usual playbook here.
Mobile marketers are probably more familiar with the second set of skills and actions: acquiring players and users much as they always have. For the first set, which might be different than they’ve ever done before, Woodward offers a tip: start by building a list of target communities that appear to have high overlap with your product. Build a list of similar offerings for higher tier, medium, and lower tiers, and then come to those communities offering added value.
The good news: your existing skills are still immensely valuable.
A lot of the marketing for web3 apps and games still follows very much of the traditional mobile growth model.
And in fact they mix well with preferred web3 strategies, with organic marketing and paid advertising complementing and accelerating each other.
“Hype-marketing approaches, exclusivity … fear of missing out … focusing on the brand collaboration … all of these are good ways to promote,” says Hagop Hagopian. “[But] don’t be afraid of using the web2 traditional book marketing approach … spend some money on marketing, get some user base, establish your core audience, and then let the ripple effect come into play. Create the network. When you acquire this base, the base will do the work, and they’re going to spread the word for you. They’re going to do the work while you get more investments and then reinvest and follow the same traditional model.”
The huge opportunity: bringing web2-style performance marketing tactics and measurement to web3-style marketing to take something that has been relatively bespoke and haphazard and make it measurable, scalable, and optimizable. (Hint: start with a combination of Singular Links, which work wherever any links work, attribution technologies, in-app events, and perhaps even some good old offer codes.)
Challenges remain, of course, and not just the crypto crash
Metrics in web3 are vastly different than traditional apps. You probably want to track connected wallets, number of transactions, currency volumes, NFT ownership levels and numbers, and marketplace metrics to monitor the health of trading and re-selling, all of which can lead to additional sources of revenue for your app or game.
Those can look very different than core metrics you would track in a traditional game or app. So there’s still a lot to figure out.
But as web3 marketers move from early adopters to the mainstream, they’re essentially forced to adopt mainstream methods of marketing, says Mythical Games growth marketing VP Daniel Lopez.
“I think that [existing] UA strategies and everything, it all plays extremely well to Web3,” Lopez says.. “With achieving efficiencies at scale, you have to be targeting more broader, more general audiences. Otherwise, you’re paying out the nose for hyper-targeted, small-user whitelisted type of individual segmentation and whatnot, and it just gets so expensive.”
All the old-school marketing strategies still matter, he adds: optimizing your funnel, lifecycle marketing, app store optimization, SEO … all the fundamentals.
And even older-school modes like co-branding are important.
“The partnerships really matter,” Lopez says. “We went and got a deal with the NFL for a reason. It’s a widely recognizable brand, breaks down those barriers to entry and gets people to click those ads and get us more effectiveness on our Google ad campaigns, right? Like, it’s just it’s all about playing the game.”
But all are important: new-school, old-school, and web3 techniques.
“[In the past] you could just be a mobile-first growth marketer and be okay with it,” Lopez adds. “Nowadays, that’s not good. You have to be a community marketer. You have to be a momentum-based marketer. You have to be a web page specialist. You have to be able to know everything.”
Mass adoption of web3: still on the horizon?
Mass adoption is still on the horizon, the panelists said. It’s not immediate, but it’s coming.
Web3 is for creators.
“I’m looking at my 8-year-old son, who is playing the Sandbox,” says Shapina. “And his first inclination is he wants to make these things … in web3, users are creators … and you know, the new generation of kids is growing up as creators.”
Also, web3 games and web3 apps are getting better.
“The games themselves will be a huge driver of adoption, once they are fun enough and once they’re good enough as experiences,” Woodward adds.
Perhaps most importantly, web3 itself will disappear as a category as the technology just gets seamlessly integrated into app design and game construction. For example, if you scour world-creation/block party/game invention Blankos’ website or watch its video trailer, you won’t find the word “web3” or “crypto.”
It’s just about the game.
And yet you can own assets there. And buy NFTs.
“How many people know that they own NFTs when they’re playing Blankos?” says Lopez. “Because it’s very easy to get lost in the idea that this is just a great game. It’s a fun game. And these are just cool things that you can buy. Who knows if they’re even aware that it’s an NFT, and that they can buy on the secondary marketplace?”
Still, for many web 3 games and apps, mass adoption is not going to be immediate. It’s too hard, connecting a wallet is too scary, onboarding sucks, making a purchase requires 25 steps.
But that will all change. And we’ll know that’s happening when we essentially shut about it.
“We’re not going to talk about Web3 games,” Woodward says. “We’ll just stop talking about all this. And all of what Web3 games bring to the table for builders will essentially just kind of be in the background as other cool ways that you can build unique hooks or do cool things with your economy, or just be games.”
“And you know, no one is like, ‘Oh, I only play cloud computing games, or, you know, like AWS games.’ Once we stop talking about the technology … and we’re just enriching the gaming experience, that’s when, I think, we’re on the road to mainstream adoption.”
Watch the webinar for MUCH more insight
It may be hard to believe, but we covered much more in the full webinar. Check out the on-demand webinar right here.
- State of the web3 app industry
- Top categories in web3 gaming
- Product differentiators for web3 games and apps
- Web3 monetization
- Growth strategies
- Expansion capability
- Telegram & Discord
- Building a web3 community
- The most successful web3 growth strategies
- And more …