Analyzing a blockchain gaming community: Is it all about the money?
Community is king
If you spend any time in the echo chamber of blockchain gaming, you’ll hear: it’s all about “the community.” CEOs consistently heap praise on their community in AMAs (ask me anything sessions) and virtual town halls. Hop into any of the top blockchain game Discord servers and you’ll likely be swarmed by MODs (moderators) welcoming you to “the community” and vying for your attention. If only customer service IRL was this good!
Community is king because, more so than ever, the survival and success of a blockchain game appears to be inextricably tied to serving the (mainly financial) needs of its community. Communities are no longer made up of just gamers: they are owners, investors, speculators, and YOLO gamblers who are willing to spend hundreds, if not, thousands on game assets that, in some cases, have yet to demonstrate any utility.
Given this reality, is asset value the only real community metric worth tracking at this point? Will the long term success of a blockchain game ultimately be determined by the financial wellbeing of its community?
Or, is it the shortage and limited value of non-asset related data that prevents us from getting a comprehensive overview of blockchain gaming communities and thus their true nature?
It may be a little of both.
The challenge of evaluating community
Community is vital but how to quantify its importance in the age of web3 is still unclear. According to one top data scientist interviewed for this article, here are some of the main challenges:
- The primary measurement platforms (e.g., DappRadar, IcyTools, Nansen) are mainly transactional. This only gives you a limited view into what a user/player is buying, not why they are buying it.
- The pool of people playing blockchain games is still too small to be measured for statistical significance.
- There is no interoperability among the blockchain gaming ecosystems which makes aggregating the data for analysis a challenge.
In contrast, user data in web2 is easier to track and far more rich and plentiful. It is a bit counterintuitive since the proliferation of on-chain, publicly available data should theoretically be a treasure trove of insights. However, in web2 there are established tools for measuring (e.g., Google Analytics), and there is general agreement among data scientists as to what metrics have proven to be of real value. This is the result of decades of experimentation on a massive (and growing) audience.
For example, demographic and psychographic profiles are the industry standard utilizing a closed-loop system of analytics. At a basic level, they tell you “who” is buying your product and “why” they are buying it, from the perspective of buying habit patterns in relation to overall market share of the existing competition. They have been used for a long time by all major global brands. In web3, there isn’t a comparable set of standards.
Here are some common non-transactional metrics used to evaluate blockchain gaming communities and their challenges:
- Metric: Daily Unique Active Wallets
Challenge: Widely used in web3 to track game growth and adoption. However, it only works for games that have actual gameplay. Many blockchain games are either too early in the development stage or have opted to build their communities concurrently with game development (e.g., Star Atlas). In these cases, the “active” component generally reflects trading behavior rather than engagement with an actual game. - Metric: Sentiment
Challenge: Still largely subjective and restricted to pulling keywords to form a sentiment analysis from social media platforms. This data is difficult to aggregate and create meaningful user profiles due to the fact that bots and influencers could alter the space. Note: Some platforms, like LunarCrush, are working on this issue. - Metric: Demographics
Challenge: Blockchain gaming communities primarily reside in Discord. While Discord provides analytics, it’s not nearly as sophisticated as something like Google Analytics, because no demographic data is tracked. - Metric: DAOs — do they exist and how many users are involved?
Challenge: This metric has potential, especially for tracking user behavior but only a few games have functioning DAOs. However, there are no demographics or personal information stored to become a member. - Metric: Community Growth (e.g., Discord, Twitter, etc.)
Challenge: Decent for general trends but analytics tools are still limited in web3 and really only useful to track general engagement from outside sources, attrition and new users. - Metric: Engagement
Challenge: Good for general observations but highly subjective from a data perspective.
The folks over at Kazm also suggest the following metrics for assessing community health:
- “Unique Holder Ratio” which “demonstrates that the community is composed of more unique individuals rather than a few whales with outsized shares.”
- “Hype-Sustaining Incentives” in which communities provide utility offerings to “build grassroots excitement ahead of a promised event or announcement.”
Given web3’s transparency, one would think that it would be easy for all participants to get insights into user data. While this is true for transactional data, it’s very difficult to tie that transactional data to a specific user. Nansen, a blockchain analytics platform states on their website: “we do not focus on personal individuals in our wallet labels.” Also inherent in web3 culture are expectations of data anonymity and ownership. From a data collection perspective, if users simply choose not to share their private information how comprehensive and valuable will the data be?
Further complicating the analysis process is the predominance of transactional data. Given this reality, it’s easy to assume all players are primarily motivated by the changing value of his/her digital assets. Yes, other game elements may matter but the transactional data is hard to ignore.
The community manager, on the other hand, is motivated by non-transactional data such as player growth and player retention. The former is often in conflict with the players’ interest in growing the value of their assets. The latter is vulnerable to changes in asset price.
For example, as an observer of several blockchain gaming communities, I have seen community members express concern about the entrance of new players, especially how new players will impact the price of assets. If the game needs to generate new assets to onboard new players (to increase growth) it may devalue the existing assets thus upsetting existing players and impacting player retention. For the community manager, these concerns cannot be ignored. Players are owners and financial stakeholders. They have an expectation of being able to influence the direction of game development — a process they likely don’t fully understand.
So where do we go from here?
Until the non-transactional data achieves parity with the transactional data we may have to wait to truly understand the real social dynamics behind blockchain gaming communities. While the available tools may show general trends, they shouldn’t be used as a predictive tool for evaluating their long-term health and success.
Furthermore, we should also not be too quick to condemn blockchain gaming communities for their perceived fixation on asset prices. Until more sophisticated web3 analytical tools are developed to better understand the demographics and psychographics, we don’t really know what’s going on in the minds of the community. The transactional data may simply represent the highest quality data available and is weighted accordingly.
“The analytics space is still overwhelmingly dominated by trading and investing-focused platforms. As Web3 communities continue to mature (most are not even one year-old), a comprehensive set of management and analytics tools will prove to be more critical than ever.” Source: Kazm blog: The Tooling Landscape for Web3 Communities (substack.com)
In the interim, your best bet is to remain intimately involved in the blockchain gaming communities that interest you. This is insanely time consuming but personally I have been surprised at how resilient communities have been despite hacks, network shutdowns and a bear market that has cut asset prices by more than half. Maybe there is more to a community than just “number go up”?
Acknowledgements: The author would like to thank the following FOG members for their help with this article: Konstantinos, Avihay, Serge-Raymond.
For further reading:
Rug Pull or To The Moon? Evaluating NFT Community Health (substack.com)
The Tooling Landscape for Web3 Communities (substack.com)
How to think about building web 3 communities (substack.com)
Building Blockchain Gaming Communities | Playmint | LevelUp Podcast — YouTube
