The gaming industry is diverse, ranging from AAA games to casual games. AAA games, known for their high development and marketing costs, have dominated the initial phase of web3 games. These games appeal to core PC and console gamers who are typically more tech-savvy and willing to spend more.
However, the high cost and complexity of developing AAA games have led to a shift in focus towards casual games, which are cheaper to produce and have a broader, more diverse audience.
Could the blockchain gaming space take advantage of it?
The Casual Game Market
Casual games are relatively inexpensive to create, can be distributed on any platform, and have a promising future with $25B in revenue forecasted by 2027. The average session length for casual games is 5-7 minutes, and the demographic skews older, with social casino games being primarily played by middle-aged women.
Despite these advantages, casual games face challenges in monetization, with low ARPPUs and a conversion rate amongst the lowest of all game categories at ~1%. Web3 could increase the LTV for those that convert but there is still a 99% gamers who won't convert.
That's mostly the reason why most casual and hyper casual games monetize via ads.
Setting the Foundation for Casual Web3 Gaming
The onboarding process for web3 games has become significantly easier over time. Initially, the process was complex and time-consuming, requiring players to navigate through multiple steps to acquire crypto and buy items. This was particularly challenging for casual gamers, who typically have shorter gaming sessions and may not be as tech-savvy as core gamers.
However, with the advent of account abstraction and fiat on-ramps, the onboarding process has become much smoother. Players can now join and buy into web3 games as easily as connecting with a social login. This is crucial for casual games, as it allows users to get started quickly and easily.
Moreover, this smoother onboarding process opens up the potential for reaching crypto-naive players. These are players who have spent years spending in games without ever being able to earn back some of their losses. By offering these players the potential to earn back some of their money, web3 games could tap into a currently untapped audience.
In-game advertising has traditionally been a challenge for game developers. Banner ads and interstitial ads were often seen as obtrusive and detracted from the gaming experience. However, the in-game ad tech world has changed considerably in recent years.
Brands have recognized the value of gaming's 3 billion players and have invested major ad dollars into the space. New companies have emerged to make the ad experience more native. For example, platforms like Anzu allow developers to build ad real estate into the game, such as corporate logos on racing cars or branded tattoos on avatars. This allows ads to be integrated seamlessly into the game without disrupting gameplay.
Casual games are particularly well-suited for in-game ads due to their short session lengths and the likelihood that they are played on devices with usable browsers. This makes it easier for users to follow an ad link and convert. In fact, data shows that gamers look at integrated game ads twice as long as they do other kinds of ads, leading to better engagement and ad revenue.
With the future of in-game advertising looking promising, estimated to reach $20B by 2032, it presents a significant opportunity for casual web3 games. By integrating seamless in-game ads, developers can enhance the gaming experience for players while also driving revenue.