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Coda Labs: Global poll shows gamers haven’t embraced Web3 games yet Coda Labs: Global poll shows gamers haven’t embraced Web3 games yet
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Coda Labs released a global poll of nearly 7,000 gamers this week that revealed Web3 games have a long way to go before they will gain mainstream acceptance.

But Coda Labs, which has a platform for Web3 games and mobile games and hired a market researcher to do the survey, holds out some hope that marketing is the problem. While the vast majority of players have no interest in playing “play to earn” blockchain games, those who have tried it say they like it.

Şekip Can Gökalp, CEO of London-based Coda Labs, said in a deep interview with GamesBeat that the company commissioned the large poll in multiple nations because it wanted to get to the bottom of whether gamers really hated blockchain games or were willing to give them a try. A lot is at stake, as market researcher DappRadar estimated blockchain game companies will raise $10 billion this year.

“We started working on understanding the users because there was a lot of noise around that in the space,” Can Gökalp said. “But there weren’t a lot of facts. And nobody seems to be talking to actual players at good enough scale. So we undertook the effort ourselves in a way to try and understand where they come from.”

Methodology

Şekip Can Gökalp is CEO of London-based Coda Labs.

The company worked with the Blockchain Game Alliance, DappRadar and Laguna Games on the survey to capture the thoughts of consumer gamers worldwide across all gaming platforms (PC, console, mobile, Web3) about cryptocurrency, NFTs, and blockchain gaming.

WALR did an online survey among 6,921 adults in five global markets — the U.S., United Kingdom, Japan, Brazil, and South Africa — during June, which was some weeks into the cryptocurrency meltdown and the fall in prices for non-fungible tokens (NFTs). Chainalysis said NFT prices fell 92% from May through July, and Bitcoin prices are down 58% this year. The number of users who are actively trading or buying NFTs has also fallen.

“This was a post-crash survey,” Can Gökalp said.

WALR used an incentive to find gamers and crypto fans. To qualify for the survey, respondents had to meet at least one of two selection criteria: 1) Play a video game at least twice per month and/or 2) complete at least one specific crypto action in the last 30 days. WALR is a member of the Market Research Society and abides by its code of practice.

Coda Labs surveyed gamers in five countries.

Coda Labs shared the questions with us to ensure it didn’t put leading questions into the survey. It asked gamers if they had heard of terms like Web3, NFTs, blockchain games and such. Coda Labs deliberately avoided countries that had a lot of crypto gamers (those who are both familiar with cryptocurrency and play games frequently), such as the Philippines. The differences among the markets surveyed are interesting, as those in emerging markets like South Africa and Brazil are more enthusiastic about crypto, while those in the U.S., U.K., and Japan are more neutral or negative.

“We wanted to throw every term out there to get them to grab on to the concept,” Can Gökalp said. “We wanted to trigger them. If somebody had a bad feeling about one of those words, we wanted them to see that and we wanted to capture that. So we tried to use more words than less to be unbiased. We didn’t want to pull any punches.”

The results

Gamers know what cryptocurrencies and NFTs are. But they don’t really like them. Eighty-nine percent have heard of Bitcoin and 51% know about NFTs. But only 3% own NFTs.

About 52% of gamers don’t know any Web3 gaming terms. Twenty-eight percent of gamers have heard about “play-to-earn” games, where players own their assets and can sell them on a secondary market. The “play-to-earn” phrase is the most familiar term of all. About 16% qualified as “crypto gamers.” Only 12% of gamers have actually tried Web3 games. And 41% of gamers aren’t sure how Web3 games work.

Players also are suspicious. About 41% of crypto gamers are concerned about scams, and 32% of crypto gamers are worried about the financial costs of playing Web3 games.

“The majority don’t know what [crypto gaming] is,” Can Gökalp said. “Only [48%] heard of a Web3 gaming term. The most popular term was P2E, which is the worst way to market Web3 gaming. Those who don’t know anything about it are the most skeptical. Those who have engaged like it a lot. So our takeaway is that we did a horrible job marketing in this space. The crypto natives and crypto gaming companies and the get-rich fast schemes left a really bad taste with the general audience.”

He added, “That needs to be fixed. [The second takeaway] is education. People who know what it is engage with it. But before they engage, they don’t like it. That’s pretty obvious.”

Of course, we have no guarantee that if more people got over the hurdle of playing the blockchain games they would all like it. Some people may play a blockchain game and trash it, particularly since not many of them are visually appealing yet.

About 97% of those surveyed play games regularly.

About 37% of the gamers who are playing Web3 games do so because they can earn money. About 45% of crypto non-gamers and 60% of crypto gamers also play because they can earn money. That is, money is the motivator. Can Gökalp said that is going to be a problem because the real motivator ought to be fun.

Do players like them? Sort of. Once they give Web3 and NFT games a chance, players rated them 7.1 out of 10. The overall feeling of all surveyed gamers was around 4.5 out of 10, or close to neutral, Can Gökalp said. Crypto natives rated the games at 8.1 out of 10.

The study said that crypto gamers are hardcore folks who will likely spend money in a game. They’re also more competitive than other gamers.

Nearly all crypto users are gamers. The study found that crypto gamers outnumber crypto non-gamer five to one. As many as 71% of crypto non-gamers play a game at least once a month, but the study counted them as non-gamers since they don’t meet the criteria for gamers in the study.

Coda Labs was started in 2019 by AdColony veteran Can Gökalp. Coda Labs has published games totaling more than 100 million total downloads, with 15,000 mobile games developers and ten million gamers in its ecosystem.

Gamers and crypto natives are fairly neutral on crypto.

Since the start of the year, the company pivoted to Web3 games. Earlier this year, it released its first Web3 project, Infinite Arcade, which has helped guide the vision for Coda Labs. Infinite Arcade, which has scaled to more than 35 games in just seven months and has an SDK that sees up to half a million daily active users (DAUs).

Overall, Can Gökalp said he likes the results, as he was pleasantly surprised that it wasn’t more negative given all of the negative publicity this year.

“I think it just speaks to the enthusiasm amongst this kind of early adopter crypto audience,” he said.

Do we see any hope for Coda Labs and other blockchain game companies? Can Gökalp said that, despite the low usage, he was encouraged. The biggest reason people didn’t play was the barriers to entry. It remains far to complicated to create crypto wallets and do transactions or come up to speed on a crypto game.

Margaret Wallace, associate professor at Boston University, said that players want value in their game-playing experiences and not feel like they’re being squeezed out of money or resources with little regard for their time and for player communities.

“A lot of P2E games are purely mechanisms to amass and circulate crypto and a lot of people have been burnt,” she said. “Many players are, therefore, suspicious even if they aren’t familiar with ‘web3 gaming terms.’ This unfamiliarity is partly by design, relying on unnecessary jargon. Those with no experience in what it takes to make an engaging game enter the space hoping to get rich quick.”

She thinks the killer use-cases for NFTs in gaming are yet to be realized and have potential to be transformative and meaningful.

“Many of these first-wave ‘web3 games’ will disappear. Current P2E is extremely flawed. Provide gamers with lasting value and they will have a more favorable view,” she said.

Crypto gamers are the biggest fans of blockchain games.
How gamers, crypto natives, and non-crypto gamers feel about Web3 games.

“They don’t know where to start. They’re like, ‘how do I set up a wallet? How do I find a game? Which game is good? Which game is trustable?’,” Can Gökalp said. “And these very fundamental questions are the biggest reasons why they don’t play or the why they haven’t played so far.”

The big concern is that you’ll get scammed when you’re learning how to play.

“It’s a big turnoff to be asked for a couple of hundred bucks to start playing a game,” Can Gökalp said. “That was another big challenge.”

Some players noted their concern for the environment, as blockchain technologies like Bitcoin can be wasteful of energy by using a lot of computing power. However, we didn’t see a nuanced reaction about efforts by the blockchain gaming companies to mitigate those effects. (Ethereum’s recent Merge moved the popular blockchain to a more environmentally friendly proof-of-stake approach.)

The biggest learnings

The profile of crypto owners.

As noted above, Can Gökalp believes education is the next step to take. Focusing on player benefits rather than jargon or technology is probably the right move. The technology should be in the background, he said. It could be as simple as telling people NFTs are digital collectibles, he said.

“I don’t think that 100% of gamers shared the backlash of the hardcore gamer profile that surfaced over the last 12 months,” Can Gökalp said. “An NFT doesn’t have to mean you’re being scammed by a game. There are very different player types involved here. Some are vocal and don’t represent the majority.”

He thinks there is a parallel to mobile games like Diablo Immortal, where Blizzard took a hardcore game and brought it to mobile gamers. Players trashed the game on reviews because of a perceived aggressive monetization scheme. Yet the free-to-play game was popular enough to generate $100 million in its first two months.

For sure, an improved economic environment across the globe, an end to the war in Ukraine, more education and better interoperability among blockchain games will help.

Ultimately, he said that building great games is the real way to get gamers to play blockchain games.

“The next wave of game launches will be the actual builders, operators, who have been interested in the space have been building,” he said. “Obviously it takes a while to launch products. As the real veterans of the gaming space come out, the quality will be better.”

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