As the popularity of Web3 games continues to grow, the blockchain gaming industry is facing several challenges that need to be addressed if it wants to remain viable. According to Tobin Kuo, CEO of Seraph, a blockchain gaming company, sustaining player engagement, adopting new technologies, and building sustainable in-game economies are the hurdles that GameFi must overcome.
Player Engagement: The Biggest Challenge
One of the biggest challenges facing the industry is sustaining player engagement. According to Kuo, over 60% of players disengage from Web3 games after only 30 days. This high rate of churn can be attributed to a lack of long-term incentives and poor gameplay mechanics.
The Importance of Immersive Storytelling
To overcome this challenge, projects must prioritize player-centric design, focusing on immersive storytelling, skill-based rewards, and game mechanics that go beyond ‘earn-first’ models. As Kuo explained:
"As the attention economy accelerates, projects must prioritize player-centric design, focusing on immersive storytelling, skill-based rewards, and game mechanics that go beyond ‘earn-first’ models instead of relying on trend-based attention."
The Role of New Technologies in Blockchain Gaming
Another challenge facing the industry is adopting new technologies to enhance player experiences. According to Kuo, integrating new technologies such as generative AI can help improve player engagement and retention.
"Projects failing to integrate nascent tech typically record 30% to 40% reductions in player retention compared with projects embracing new technologies," he said.
Building Sustainable In-Game Economies
Building sustainable in-game economies is also crucial for the success of Web3 games. As Kuo explained:
"Unstable in-game economies are a leading cause of project insolvency… Building sustainable token models for Web3 games that control inflation and feature data-driven player rewards is key to maintaining player retention."
Some strategies that can help achieve this include:
- Dynamic loot distribution
- Staking-based rewards
- Player-controlled economies via decentralized autonomous organizations (DAOs)
The Example of Clicker Games
Clicker games like Hamster Kombat are a prime example of the challenges facing the industry. The game captured headlines in July after surpassing 300 million users in less than five months. However, the game experienced an 86% reduction in active users following a token airdrop, which was considered the largest in crypto history.
As of November, the game only had 41 million players compared with the 300 million peak levels recorded during the summer.
The State of the Blockchain Gaming Industry in 2024
The Blockchain Game Alliance (BGA) recently released its ‘2024 State of the Industry Report,’ which polled 623 professionals from the Web3 gaming industry. According to the report, approximately 53% of respondents indicated that poor user experience (UX) and complex user interfaces (UI) present the biggest challenges to onboarding new players to Web3 games.
Industry Professionals Outline the Main Problems Facing the GameFi Sector
Industry professionals have outlined the main problems facing the GameFi sector. According to a report from the BGA, 11% of users were deterred from Web3 gaming due to complexities in setting up a crypto wallet.
Long Do, CEO of Anomaly, said during a panel at the Blockchain Futurist Conference in August that abstracting away blockchain features so players did not know they were interacting on-chain was key to driving adoption.
The BGA’s 2024 Report
The BGA’s 2024 report also showed that 33% of respondents said poor gameplay experiences were one of the top three challenges currently facing the industry.
A OnePoll Survey on Blockchain Gaming Awareness
A OnePoll survey conducted earlier in 2024, polling over 2,000 adults, found that the majority of gamers polled were unaware of blockchain gaming. According to the survey, 52% of respondents did not know what blockchain games are, while another 32% indicated they had heard of them but had never played one.
Conclusion
The blockchain gaming industry is facing several challenges in 2025, including sustaining player engagement, adopting new technologies, and building sustainable in-game economies. By prioritizing player-centric design, integrating new technologies, and building sustainable token models, projects can overcome these challenges and maintain player retention.
