The Play-to-earn (P2E) movement has seen a lot of prominent figures from the traditional gaming world migrate over to GameFi. That’s a good sign, but for P2E to live up to its potential it needs more complexity and sustainability. Current games are run by ponzinomics which attracts short term engagement until the game has been plundered, then people move to the next one. After a point there is only so much fresh blood you can attract to the Ponzi.

To build out a game economy of consistent engagement, games need to focus on player retention. This is an easy thing to say but an incredibly tough thing to execute. We consider traditional games to be leaps and bounds ahead of crypto games, but the stats suggest that even they struggle with player retention.

Some numbers for you

For PC and mobile games, only the very best games have a retention rate of 35% after day 1 while the industry average is 25%. After day 7 the top games have a retention rate of 11% while the industry average is 6%. Having a retention rate of 4% after a month is considered to be very good, only classic games can maintain retention rate of 10% or more after a month. An example of a classic game maintaining player retention is Minecraft. In the first half of 2021, 20% of PC players were playing Minecraft. But getting to this “classic game” stage is not easy, there are a lot of factors at play.

As our lives gradually move online, a trend that you may have started to notice is that the attention span of people is starting to deteriorate at a very high pace. People struggle to sit through videos that are longer than a minute. Everything has to be bite-sized and quick. This makes the job of a game developer 10 times tougher. To grab the players attention is one thing, but retaining that attention is a whole different ball game, there always has to be something to do or the players will get bored and move to another game since choice is abundant.

In such an environment, it becomes easier to breakdown “retention” and tackle it in pieces.

Phases of retention

The first phase is **short term **retention. This typically spans 7 days. Here, you look at how many new players can you attract and can you get them to stay for at least a week. The second phase is medium term retention. This is typically calculated from day 7 to the 1-month mark. Out of the players you retained for a week, the game must maximize the number of players who stay through the rest of the month. I feel like most GameFi games would have fairly good stats in this department purely due to the monetary aspect. It is the last two phases that get tricky. **Long term **retention is typically calculated from the 1-month to 3-month mark. If you have reached here then it’s fair to say you have a really good product, you have the people hooked. But just having them hooked isn’t enough, you need to reel them in and secure the catch. That’s the fourth phase, terminal retention. This is when you have a certain percentage of players who will never leave your game. The aim of every game should be to maximize terminal retention. The advantage that GameFi games have is that the earnings generated by the players through the game economy is real. So if the game is built correctly they have a higher likelihood of maximizing terminal retention.

But, winning takes time. It’s a step-by-step process.

Chipping away at retention

If you dive deeper within every phase of retention, there are specific factors that contribute to being successful within that phase. If we chip away at each phase, it becomes easier for games to vaguely plan out the evolution of their game. Mind you, the game should not have a dead set structure from the get-go because then it limits the games ability to adapt to the demands of the audience. The more flexible you are while maintaining a general structure, the better it is for your game.

Short term

Achieving that initial traction for your game requires 4 key factors.

**Understandability **is very important. How accessible is your game and how easy is it for the first wave of players to understand what is going on. The current round of crypto games are fairly good at this, the games don’t have too many layers of complexity. You buy the NFT, you do the quests or mining or looting or whatever else and then you get token rewards, you either use the token to upgrade the NFT or you sell the token. The added benefit is that crypto games are the first iteration of games where you have whitepapers explaining every single detail of how the game works. Whether that is holistically a good thing or bad thing, I don’t know, but it does help with understandability.

The next key factor is **novelty. **How unique is your game? And is it just unique for the sake of being unique or is it actually a fun game with a unique concept? A game that is unique and fun will often give players that jaw dropping moment, if you achieve that then the product pretty much markets itself. But other than that, novelty goes hand in hand with marketing. It is very easy to build hype around a novel product to get a massive influx on initial users, but Crypto projects are notorious for building hype and then rugging the project, so you need to be able to read between the lines. If the product doesn’t live up to the hype, then the people will leave quicker than they came. DO NOT OVERPROMISE AND UNDERDELIVER. We saw what happened with cyberpunk.

The P2E genre in itself is very novel. When Axie Infinity came out people couldn’t believe that you could play a game and earn more money than people make at a regular 9-5 job. However, since Axie, most P2E game feel like variations of the same game mechanics. The dual-token model with your NFT character that you use for raids, quests, and loots. Majority can be thought off as forks of Axie, but you do have exceptions to the rule. Games like AFAR and Ascenders are coming out with smooth open world games that have interesting battle mechanisms. Also, there are many more traditional gaming devs who have migrated over to GameFi so in the future we will likely see more novel products. When one of these novel products are actually good, the virality, exposure, and attention will be instantaneous.

Lastly, the **technicals. **This deals with how easy it is to run the game. Can you play from any PC or do you need the high performance CPU for your game to run smoothly? Is the game full of bugs and glitches upon launch? If it’s a phone game, does it rapidly drain your battery? Focusing on things like this ultimately results in creating a smoother experience for the player. If you just started playing a new game which kept crashing or glitching out, I’m pretty sure you’d delete it and not come back. First impressions matter.

If a game successfully maintains a sizeable portion of the player base past the first week, then they need to start introducing more features. Remember, people have broken attention spans.

Medium term

Once the players have understood the game, you start introducing more **progression vectors. **Players need different paths to progress, clear goals that they can achieve to go further than the other player. This can be a levelling up system through collecting XP, unlocking new items, unlocking new parts of the map, or anything along those lines. Gamers are competitive, you have to appropriately satisfy that hunger by setting out goals and challenges for them to complete.

From this perspective I find GameFi to be fairly one dimensional. There are a standard set of tasks that people keep rinsing and repeating to get their token rewards. There are no layers of complexity in terms of progression vectors.

In relation to adding complexity comes the next factor, **mastery. **There should be enough layers in a game to the point where a player can master their abilities. They should be able to figure out the game mechanics and game design which will allow them to figure out their own strategies within this game. If there are many different strategies then you add another layer where people keep trying to figure out the meta or they figure out the meta that works best for them. Again, these layers do not exist currently in GameFi.

Even when games have these layers of complexity, it is still very difficult to retain players. This is why you always need **return triggers. **There will be players who either mastered the game and got bored or there will be players who played the game for a bit and have a decent grasp of it but just lost interest. To get these players to come back, there needs to be occasional additions. This can be an in-game event, or the addition of a new weapon or resource, or creating a new season of the game where there are multiple changes wrapped into one new season.

While crypto games don’t have this level of complexity as yet, they still manage to have fairly good medium term retention. This is purely because of the monetary incentive which keeps the guild scholars playing the game, but more on this later.

With that said, where GameFi stands to benefit in terms of these factors is the community approach and incentivizing modding, we see it in projects like TreasureDAO. It is the perfect recipe. Who better to add more layers to the game than the community itself. It keeps the community engaged, the players will enjoy it since the devs in the community and players in the community are likely to be in-tune, and the platform itself will generate revenue by providing the base infrastructure for these modded mini-games.

Long term

If a sizeable portion of your community is still active at this point in the lifecycle of your game, then it’s fair to say that the team has done a good job. But to break that barrier between good and great, you need to strive for long term retention.

One important factor is to have elements for **social comparison. **You need to have things like rankings, leaderboards, achievements & trophies collected, and stats for hours played so people can socially compare their progress. I still remember during the Black Ops 2 days, I walked into school with my chest puffed, I went straight to the homies and said “I’m prestige 10 mfer”. At that time, it was a major flex. Similarly, for FIFA Ultimate Team (FUT), having an Icon Pele card or having a 30-0 record in FUT champs is a major flex. Gamers crave that, they are very competitive and if their friend is doing better than them, then you know for a fact they are going back home and grinding for a couple of hours.

Currently, I see projects like GuildFI playing into this with their GuildFi ID which shows peoples rankings as well as other metrics such as rewards claimed, hours played, total assets held etc.

Another important factor is invoking **emotional responses. **This can be a story based game which can invoke a sad response, or a game which leaves you raging from time-to-time. As counter-intuitive as it may seem, when people rage at games I see it as a good thing from a player retention standpoint. It means that they care enough about winning to the point where they get pissed off, and it also means that they will be coming back sooner or later to get that W.

In addition to this, games need to continue to introduce features similar to the ones mentioned under “return triggers”. Keeping adding a new item, or host live events, or make new seasons to keep players engaged.

Terminal retention

Achieving meaningful terminal retention is what separates great games from classics. This is where games like Mario Kart, Minecraft, COD, FIFA, GTA, and many more sit.

At this point, the game needs to grow outside of the community. You need **externals. **This is when you host live conventions where people from the community can come and meet each other and do fun things. You also add the Esports element to the game where you host in-person or online tournaments, this allows players to become pros. Not only does this increase the attention to your game through viewership, but you now have a chunk of players who play your game as a job. They are the ones who will almost never leave.

Takeaways

While all of the factors mentioned above are important. I believe at the end of the day, the hallmarks of a game that has the most retention is one that fosters the most social interaction. It is inherent in humans to long for some form of social interaction. Through gaming people can connect with like-minded people across the world while partaking in fun activities. I touched upon this in my “conceptualizing digital nations” article, games are becoming increasingly social and the ones that are more social tend to be more popular. Lots of fun moments come from hanging out in COD lobbies, or Among us lobbies with your friends. The same will apply for GameFi games.

The other thing to focus on is understandability and depth. A game which is high in understandability will attract new users and help with short term retention but will struggle to retain players after the short term. A game that is high in depth will likely be better for retaining players for a longer time but will struggle to attract new players because it will be very confusing and overwhelming for new players. Trying to establish the balance between understandability and depth is the ideal scenario, but what this balance looks like is tough to say. What is obvious is that a game should ideally start with high understandability and gradually transition into increasing depth as they attract more players.

Game economies

An added vector for GameFi in terms of retention is the in-game economy. They are important for traditional games as well but in GameFi the earnings generated can become real money. So the economy becomes just as important as the game mechanics and game design.

When you break it down to its core, a sustainable economy is one which has an appropriate balance between faucets and sinks. Money in vs money out. Currently, crypto games have too few sinks. The utility tokens are constantly emitted as rewards (faucet) to players without any meaningful ways for it to be taken out of supply. The result is that the token has indefinite sell pressure and the chart looks like a steep ski slope. GameFi games need more sinks where players are incentivized to use them, having a sink that is useless is as good as not having one. Having good sinks will allow for some form of price stability for the utility token which is important for a sustainable economy.

Tied in to the economy should be features that allow a user to grow with their participation in the economy. Gamers value the time and effort they put into a game a lot, if they do not get the appropriate rewards for it then it dissuades them from continuing to play the game. Now with the economies having real value attached to it, it is important that the players who participate in sustaining this economy are also rewarded appropriately. There should be features and incentives that are designed in a way that participation in the game economy provides a direct path for user growth. If players are getting value for their money and time then there is a higher likelihood of them sticking around.

Audiences

The ‘earn’ element is a blessing and a curse. It’s a blessing because it becomes easier to attract players and retain them for longer than traditional games. It’s a curse because of the audience it attracts.

The core user base for GameFi games is guild scholars. This is probably not going to change in the near future. The sole job of the scholar is to maximize their returns from a game. This creates a sort of mercenary environment within GameFi which may drive away a lot of recreational players. But the flipside for the game developers is the scholars will most often makeup their core user base. These are the players who will give them terminal retention. So do you design your game in such a way that it caters to scholars? Or do you take the chance of making it focused towards “fun-seekers” with a high probability that the game might die out after an initial hype cycle?

I think a good solution would be having two modes to a game. You have one normal side and one competitive side, similar to how games like Fortnite, COD, and FIFA have a regular option and competitive option. So competitive players will be matched with other competitive players and regular players will be matched with other regular players. While this could be a somewhat fair solution, you will encounter the problem of how do you make sure a competitive player does not join the regular lobby and vice versa.

Parting thoughts

These are just my thoughts on what a potential retention framework could look like. Of course it depends from genre to genre and game to game. I thought I would just get my thoughts out there since I believe retention should be one of the most important factors that GameFi teams look at. Building out tangible digital economies is a cool idea, but it also comes with responsibilities. One of those responsibilities is building out a sustainable game such that player retention is maximized.

That is all for this article today. I hope you enjoyed.

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