Which Player Types Would You Like To Have In Your Game?
Web3 games allow in-game items to be traded on permissionless decentralized marketplaces in exchange for real money. This has created opportunities for financially motivated actors to speculate and earn while also enabling game developers to incentivize certain player behavior with financial rewards. The complex open game economies have resulted in the emergence of new participant classes with varying motivations and behaviors — this article aims to classify these participant personas alongside the existing F2P participant personas.¹
F2P players are the traditional video game players — they play games because they enjoy them with no expectation of financial rewards. Some F2P players are more valuable to game developers than others as they spend more on microtransactions or their eyeballs are worth more bucks to advertisers.
F2P Whales are the creme de la creme — they spend huge sums of money in games on a regular basis. Whales enjoy paying for experiences associated with power, social interactions and more. They might represent the majority of a F2P game’s revenue and due to their extravagant spending behavior, advertisers are willing to spend large sums of money to get access to their eyeballs to sell them various products/services. They can spend anything from $500 to $100k per month.
F2P Non-Whale Spenders are the type of gamers that are desired in a healthy long-term economy. Even though they don’t spend as much as the whales, they are likely to spend relatively more time playing the game than whales and still spend a considerable amount of money. They are likely to spend on battle passes, microtransactions and cosmetics. They can spend anything from $5 to $100 per month.
F2P Non-Spenders from Developed Countries
F2P Non-Spenders are those that do not spend in games but due to their disposable income, their eyeballs are valuable to advertisers. There is also a possibility that they can convert into a spender anytime. The gross advertising revenue that the game could generate from an average non-spender player from developed countries could be $5-$20 per month.
F2P Non-Spenders from Developing Countries
F2P Non-Spenders are those that do not spend in games. Additionally, their eyeballs are also not very valuable to advertisers as the average non-spender player from developing countries is considered to have little disposable income and a relatively lower probability to convert into a spender. The gross advertising revenue that the game could generate from an average non-spender player from developing countries could be $1 per month.
In short, most F2P players have a net deflationary impact on the economy as they are willing to spend more money than what they are getting paid by the game (if they are getting paid anything).
Web3 Gaming Guilds
Let’s start with some facts. The existence of any for-profit institution is to make money — institutions don’t have emotions (and ethics). Founders, executives and some shareholders might have emotions but they also have a fiduciary duty to their share/token holders to maximize franchise value. Thus, they will always have to prioritize a decision to maximize profits/value over supporting ethical causes.
A brand might appear to support ethical causes (environment, peace, racial/gender equality, etc.) but in reality, it probably is a well-constructed PR campaign because the executives came to the conclusion that the financial & social costs of supporting a specific ethical cause will result in a ROI positive investment that will lead to higher customer & employee retention & monetization, resulting in higher franchise value.
Web3 Gaming Guilds have financial motivations and aim to allocate their capital, time and labor to maximize earnings and franchise value. Guilds buy & lend in-game NFTs to gold farmers to earn a yield and invest in early-stage game tokens/NFTs with the expectation of capital appreciation.
Even though guilds spend as much as F2P whales, unlike F2P whales they don’t have physiological motivations and will likely not spend on cosmetics, IAPs, battle passes unless they can justify the investment with a positive financial ROI.
The reasoning is simple; A VC-backed guild with a publicly listed token has fiduciary duties to its institutional & retail token holders to maximize earnings and long-term fully-diluted market cap. Thus it can’t waste fiduciary money on buying game cosmetics for personal physiological motivations of its executives.
A guild that makes $ millions in profits from a P2E game might then buy cosmetics from that game — but this will be a PR strategy to appear supportive and non-extractive to get access to more early-stage game token/NFT investment opportunities.
One exception of guilds being deflationary and non-value extractive for any game economy is the zero-sum wagering model. E.g. Guild A bets $10, Guild B bets $10 → winner guild earns $18, game dev earns $2, loser guild earns nothing. The growing popularity of this model through various token engineering has led guilds to invest heavily in their esports teams.
Another exception of guilds being inflationary and extractive could be whether guilds act as a deflationary player acquisition channel — similar to an influencer. So that the earnings that guilds extract from the game could be justified by the earnings they bring through their brand & distribution channels. Another exception is guilds becoming UGC creator/developer agencies/bootcamps as discussed by Carlos Perreira.
Advertising value that a game can generate from a guild is typically low because although guild owners have high disposable incomes, the ones that are playing the games and watching the ads are scholar guild members who typically have low disposable incomes and are from developing countries.
Crypto VCs & Hedge Funds
Crypto VCs & Hedge Funds are institutionalized investors; they have financial motivations and aim to have an exit price that is higher than the entry price. The time horizons and asset preferences may vary; VCs might prefer early-stage private tokens/equity and have a 2–3 year horizon while Hedge Funds might prefer tradable tokens/NFTs and have a 1–180 day horizon. These institutions are typically not very active within the game itself. In short, these are the institutions that provide capital and look for opportunities & inefficiencies within the market.
Retail speculators have similar financial motivations to that of the previously mentioned institutions. Retail speculators can either act collectively by being part of a chat group, community/forum, DAO or they can be individual lone wolves.
NFT & IDO Whitelist Hunters are constantly looking for the next big gamefi investment, do extensive due diligence on the projects, spend hours engaging on the Discord channels to get whitelisted for the next hot game’s primary NFT sale.
Ponzi Yield Enjoyers enjoy getting into ponzis where there is an estimated high juicy yield on their investment; projects they have previously invested in could be Axie Infinity, Thetan Arena, OHM, Luna, STEPN. They are likely aware of where the yield is coming from, enjoy the thrill & high returns and bet that the music will continue playing.
Moonshot Traders make bets on various tokens, NFTs with the aim of generating very high returns from the difference between the entry and exit price.
Even though individuals mainly have financial motivations, they might not be the most rational investors and will likely have a high tendency for gambling/wagering since they are already willing to invest considerable amounts in risky crypto projects. A well-designed game economy would be able to convert financially motivated retail speculators into deflationary players for the game economy.
Gold Farmers have purely financial motivations — they play the game to make money. Their decision making process to play the game is a function of how much $ they can earn per hour, what the effort required is and what the probability of earning is. If driving an Uber earns them a guaranteed $5 per hour and playing Axie to earn a risky $3 per hour — they might choose driving an Uber.
Unlike F2P players who go through the core game loop and are willing reinvest back the physiological/financial rewards back in to the game to go through the full loop or progression, gold farmers are interested in earning the financial rewards as soon as possible so they can cash out and extract value from the economy.
Institutionalized Gold Farmers are even a bigger problem for the game economies as they are a more organized and efficient form of individual gold farmers. They might pay a fixed salary to child labor in low-income countries or they might set up sophisticated bots. They will continue extracting value from game economies until there is no profit to be made.
Competitive Players are the skilled players that are constantly on the top of leaderboard rankings in a game. They don’t necessarily have financial motivations and don’t play the game solely to earn money. Most of them start as F2P players but as they progress throughout the game and do well, they rank up and start earning through winning tournaments or through streaming.
As they start building a personal brand, they might get poached by esport teams to start working for them in return for a stable salary and additional perks. However, like any professional sports, the average plaer’s earnings will be limited to the size and spending behavior of the audience that is willing to watch the sports.
NBA and soccer players make millions of dollars per year because there is a large audience willing to spend hundreds of dollars per month on satellite TV to watch them. However, badminton or squash matches don’t have the same magnitude of audience spending — thus professional badminton players are getting paid much less than professional soccer players.
The same applies for esports — even though the number of esports viewers of a top esport tournament can be more than FIFA World Cup’s, the magnitude of spending per average esport viewer is significantly lower than that of the average soccer viewer.
That said, competitive players aren’t necessarily inflationary for the game economy as their existence attract new players, additional engagement for existing players (through streaming or playing together). One model where competitive players can be truly deflationary for the game economy is the zero-sum wagering model where competitive players are willing to put their skin in the game and bet on their own skills.
Micro-Influencers & Content Creators
Micro-Influencers & Content Creators represent a strong distribution channel for games. Influencers attract, engage, retain players through numerous activities. They build a community of engaged members who have strong faith in their community leader which results in the influencer promoting new games/products to his audience to have a very high conversion ratio.
Unlike competitive players that earn mostly through tournaments mainly financed by the game developer, influencers typically earn from advertising new games/products/services. An influencer’s performance to promote a game can be relatively easily measured and thus the market will continue rewarding influencers that have an economically net positive (deflationary) impact for the game economy.
White Collar Paid Players
White Collar Paid Players are a new player type described in detail in our Night Clubs & Web3 Games article. They have strong social skills and their existence result in increased retention & spending for players that interact with them which is why even though they might get paid, their overall impact is deflationary.
Apart from making an entertaining game with strong core loops, great art and balanced rule sets; the biggest challenge for web3 games will be sustaining an open economy, allocating financial incentives optimally while keeping the players/community happy to maximize LTV.
Having a permissionless open economy inevitably attracts financially motivated participants who aim to extract more value from the game than they add. Web3 game developeds should carefully evaluate which player types they would want to have in their game. Thus, the game economy and rule sets should be designed to reward/punish certain participants and behaviors.
¹This classification is based on qualitative analysis, observation and user research. It is likely that as we gather more on-chain and off-chain player/speculator behavior data from existing & upcoming web3 games, we will be able to better understand and classify different player archetypes.
²Deflationary means the player type bring more money flows to the game economy than it extracts. Inflationary means the player type extract more money flows from the game economy than it brings.
None of this is financial advice. If you want to learn more about Web3 Gaming, follow Vader Research on Twitter and Spotify. If you want Vader Research to consult with your team on tokenomics, economy management and investment management, please reach out on Twitter.