Author: lesley@footprint.network
What are Key Metrics in Blockchain Game Development?
Some key metrics to track are the numbers of gamers on the blockchain and other crypto market data, user-related data like DAUs, MAUs and user retention, social media engagement statistics, and ecosystem data around the game’s digital assets on the blockchain.
Key Takeaways:
GameFi projects differ from traditional games as maintaining price stability of in-game tokens and NFTs are key to the project’s sustainability.
GameFi data analytics can help blockchain game developers analyze market direction and potential actions.
Tracking key metrics such as active users, retention rates and payment-related data, enables developers to make informed decisions about the future direction of the game and its economy.
At its core, data analytics is about understanding your users or customers.
For blockchain games, this is a challenge. While traditional games have players, GameFi has yield farmers, degen traders, institutional investors, bots, genuine players, and an ever-evolving list of participant types, all connecting their wallets to protocols.
Moreover, in a traditional game, pricing doesn’t directly affect the game’s quality. It doesn’t matter what you paid at GameStop or on Steam — the game is the game. On the other hand, the cost of an NFT or in-game token, and its fluctuation, significantly affect the types of players the game attracts. Maintaining price stability or appreciation is as essential to the project’s sustainability as the quality of the game. In fact, in how GameFi projects operate currently, the latter is the means to the former.
All these idiosyncrasies make GameFi data analysis a multi-faceted practice that combines elements of economics, in-game activity and marketing metrics to try to hit a moving target.
However, with GameFi builders developing energetically despite the crypto winter, the industry looks poised to explode once the market turns around. Hence, now is the time to grasp the basics of GameFi data analytics.
What is GameFi?
GameFi, a term used interchangeably with blockchain gaming, is a combination of gaming and finance, and is one of the most exciting areas of Web3. It is defined by gaming projects which incorporate economic incentives for players, also known as play-to-earn games.
Typically, the assets, such as tokens or NFTs, provide benefits to the players. They can also transfer their assets outside the game to trade on crypto exchanges and NFT marketplaces. Players can earn these incentives by completing challenges and competing against other players or the computer. This process relies on a complex ecosystem and needs to be designed and operated. To optimize this process, monitoring data is key to a healthy gaming ecosystem.
While the analysis in other blockchain areas such as DeFi is more systematic, the data in GameFi is less mature. There are several challenges in the development and operation of the GameFi project, such as user acquisition, retention, activity, and revenue distribution.
In this article, we’ll explore how data can be used to optimize the design and operation of blockchain games.
GameFi Data Overview
In order to analyze and understand the GameFi ecosystem, we need to collect and classify different types of data. Data needed in the GameFi development can be divided into on-chain and off-chain.
On-chain data refers to all publicly available information recorded on the blockchain, such as user addresses, transactions, balances and smart contracts. All information here leaves its mark on the blockchain, which is irreversible and transparent, and also has the ability to record real-time information. Therefore, on-chain data plays an important role in analyzing market direction and project tendencies to make smart decisions.
Off-chain data refers to data that is not recorded on the blockchain, such as web page data, app download data, and social media data. Off-chain data is also important for the GameFi project, as much of the user behavior is currently off-chain, providing a more comprehensive view of the popularity, engagement and user experience of the GameFi project.
To gain a deeper understanding of the GameFi ecosystem, we also need to process and analyze the data using different methods. This will result in deep analytics data, which can reveal more information and patterns.
An example of Footprint Address Tags
For example, machine learning and big data technologies are used by Footprint Analytics to create millions of address tags to identify addresses as identities, such as whales, high-quality gamers or bots.
GameFi is an emerging industry that faces many challenges in terms of data collection and analysis, where industry players also face many challenges in terms of scarcity of data sources, the difficulty of data usage and uncertainty of data quality.
4 GameFi Data Metrics for Developers to Monitor
Metric 1: Macro crypto market data to start and grow your game
When we talk about statistics about the crypto market, such as market capitalization, total trading volume, price movements, etc., we refer to macro crypto market data.
Market data is extremely important because it can provide insight into the health and stability of the overall economy, which can affect investor confidence and market sentiment, allowing developers to make smart decisions.
For example, when choosing a blockchain to launch your GameFi project, there are many factors to consider, such as the number of users, transactions per capita, data capacity and cost.
Let’s take a closer look at the number of users and cost, and look at some data.
Percentage of the Total Users by Chain
One of the data metrics that developers should consider is the number of users on the blockchain. This can indicate the level of adoption and popularity of the platform, as well as the potential market size for the game.
For example, according to data from Footprint Analytics, BNB Chain had more than 9 million users as of April 2023, accounting for 25% of the total GameFi market, making it one of the most widely used blockchains for GameFi projects.
Axie Infinity Users & Transactions
Besides the number of players on the chain, another data metric that developers should consider is transactions per capita. This refers to the ratio of transactions to users on the blockchain. This can reflect the level of user engagement, as well as the soundness of the product and tokenomics design.
For example, Axie Infinity, a GameFi project on Ethereum, has over 36,000 daily transactions as of April 2023, which is more than three transactions per user. This shows that Axie Infinity still has a high retention rate and a strong ecosystem in this bear market.
Metric 2: User-related data for user acquisition and retention
As more and more Web3 projects and platforms are launched, the competition for user attention is intensifying. In 2022, a staggering 717 new GameFi projects were launched, but only 14.5% managed to attract more than 1,000 users. It is therefore essential to know who your customers are and to tag the high-quality ones in order to activate users and increase retention.
The number of users is the number of players in the GameFi program and is vital to the healthy operation of the GameFi ecosystem. It also reflects the popularity of the game project among users. However, we also need to pay attention to the metric of active players. A classic example is the controversy about The Sandbox’s active user numbers last October.
The secret is that we should notice the high-quality part of the users. DAU (daily active users) and MAU (monthly active users) are very important metrics that tell you how many people enjoy playing your game.
Besides the number of active users, we can also notice some more user-related data, which also refers to the characteristics and behavior of GameFi users. User-related data can help developers to attract, retain and activate their users, as well as improve their user experience and satisfaction.
As with user numbers, tracking the retention of a particular game or chain’s ecosystem over time can provide insights into a project’s sustainability and volatility.
This can also help us make the right decision. For example, last month we compared STEPN and Walken — two move-to-earn titles mainly on Solana — and found that Walken had a higher retention rate than STEPN.
User Retention of STEPN & Walken
Given the similarities between the two games, we found a possible explanation:
“New WALKEN users automatically get a CAThlete when they first open the app. The game then starts tracking steps through users’ phones, leading to daily automatic rewards. Users simply need to go about their day and click one button to receive GEM, and onboard further into the gameplay at their pace. While the Walken home screen might seem intimidating, this approach has less friction than requiring the user to purchase an NFT and then remember to incorporate the app into their daily run manually [which is the case with STEPN].”
This is an excellent and important optimization direction for developers to take when designing their games.
Metric 3: Social media data to build and engage your community
While blockchain games are on-chain, their users still live in the real world and interact with the project and community on social media. Social media data is data that reflects the popularity, engagement and reputation of the GameFi project on various social media platforms such as Twitter, Discord and Reddit.
And in Web3, Twitter is the primary social media platform. Metrics and data around Twitter engagement go hand in hand with on-chain metrics to build a picture of the real interest and hype around a game.
Twitter Engagement Activities
Engagement statistics provide comprehensive data on various engagement actions, such as likes, comments and retweets, to measure the quality of tweets and audience participation. Analyzing this engagement data can help you identify high-performing content types and optimal posting times to improve tweet effectiveness.
More followers mean more engagement and more users, and there is a correlation between the number of users and the NFT price. This can indicate the level of interest and engagement for the NFTs, as well as user experience and satisfaction. For example, Decentraland, a GameFi project on Ethereum, has an increasing number of Twitter followers as of December 2021, and its NFT price has increased by more than 500% since January 2021.
Metric 4: Ecosystem data to monitor and optimize your game
Ecosystem-related data refers to data that reflects the activity, performance and security of GameFi projects and their tokens and NFTs on the blockchain. This data is mostly transactional in nature. Ecosystem-related data can help developers evaluate and optimize their game design, tokenomics and security.
Footprint Analytics — SEA-BNB Buy Sell Pressure
For example, a certain decision, such as an irrational design of the projects, can bring the gold farmers and endanger the game’s ecosystem. Unlike regular players or investors, they mint NFTs and play games with them to gain native tokens for profit. This in turn causes wild price fluctuations, resulting in a chart that resembles the one above.
Revenue analysis is also an important aspect of healthy game development. It can help determine the life cycle of a game and provide insight into the sustainability of the token economy. By analyzing revenue data, developers can make informed decisions about the direction of the game and its economy.
Closing Thoughts:
Running a game is challenging, and running a game on the blockchain is even more challenging because developers need to design a complete ecosystem and incorporate token economics into the game to give gamers a better gaming experience and more rights and benefits.
As you can see from this article, using data to monitor different aspects of the game is very important. It can help the game have a longer lifecycle, a more complete ecosystem and higher revenues. By tracking key metrics such as active users, retention rates and payment-related data, developers can make informed decisions about the direction of the game and its economy.
“The blockchain game space is still so nascent relative to the time it takes to make a good game,” said Robby Yung, CEO of Animoca Brands.
We can also expect to see more innovative and immersive games, an increase in the use of cryptocurrency payments, and more opportunities for players and developers to participate in the decentralized gaming ecosystem using data and analytics as Web3 Gaming’s infrastructure and technology continue to evolve.
This piece is contributed by Footprint Analytics community.
The Footprint Community is a place where data and crypto enthusiasts worldwide help each other understand and gain insights about Web3, the metaverse, DeFi, GameFi, or any other area of the fledgling world of blockchain. Here you’ll find active, diverse voices supporting each other and driving the community forward.
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