How to Evaluate Web3 Games for Investors

Are you eager to join the promising Web3 gaming scene but unsure how to separate potential hits from duds? Don’t worry, this article will guide you through evaluating Web3 games for investment!

The Truth About Evaluating Web3 Games

People often use general Web3 project criteria like team, investors, funding, and community to evaluate Web3 games. However, these factors only tell part of the story. Accurately assessing a Web3 game’s success requires looking at game-specific metrics, not just DAU (Daily Active Users) or DAW (Daily Active Wallets), as these figures are often inaccurate.

The truth is, evaluating Web3 game success is difficult due to rampant botting. For example, Hamster Kombat claimed over 100 million players, but many were likely bots. Similarly, social media metrics like YouTube and X (formerly Twitter) follower counts are inflated because users are incentivized to follow for in-game rewards.

So, how can you accurately assess a Web3 game’s success?

According to experts like Schfield and WolvesDAO, evaluating Web3 games involves considering:

• Engagement of content creators and livestreamers on platforms like YouTube, Twitch, Farcaster, and SankoTV. If streamers start playing a Web3 game and attract significant viewership, it indicates the game is gaining traction in the Web2 community. For example, Off The Grid partnered with streamer Clix, attracting 500,000 views across two streams in 2023. This game strategically penetrated Web2 by minimizing Web3 jargon and collaborating with streamers.
• Game sale price and download numbers: This measures popularity and signals revenue potential.
• Number of users adding the game to their wishlist on Epic Games.
• NFT trading volume of in-game items: However, not all in-game assets are on-chain, so analyzing NFT trading volume, price fluctuations, and unique holder count is a valuable metric.

Key Metrics to Gauge Web3 Game Success

• Average play time: Indicates the game’s engagement and player retention.
• Revenue: Measures business performance and the game’s ability to attract paying players.
• Concurrent player count: Shows current popularity and appeal.
• Value of in-game item purchases: Can the game generate sustainable revenue from in-game items?
• Livestream viewership: Is the game attracting attention from the gaming community?
• Session length: Measures the game’s ability to hold player attention and engagement.

Types of Web3 Game Investments

• Token investment: Web3 game tokens act as in-game currency for buying and selling NFTs. As the token’s value rises, investors can profit.
• NFT investment: Web3 game NFTs represent unique in-game items that can be traded on marketplaces. Investors can profit as NFT values increase.
• Equity investment: Investing in the equity of Web3 game development companies allows investors to own shares and share in profits.

Challenges in Evaluating Web3 Games

Accurately assessing Web3 game success will remain a challenge until we have reliable game analysis organizations like Web2’s Deconstructor of Fun.

Commentary

The blockchain gaming market is booming with immense potential, attracting many investors. However, accurately gauging a Web3 game’s potential isn’t easy. It requires careful analysis and in-depth knowledge of both the blockchain market and the gaming industry. Investors must stay vigilant, avoid hype, and maintain objectivity when making investment decisions.

Investor Tips

• Conduct thorough research: Read whitepapers, learn about the development team, examine game metrics, and check community reviews.
• Diversify your investments: Don’t put all your eggs in one basket. Spread your capital across multiple game projects to mitigate risk.
• Monitor closely: Stay updated on market news and game developments to make timely investment decisions.
• Verify information: Be wary of inflated information, especially regarding player numbers and revenue.

Remember: Investing in Web3 games offers exciting opportunities but also involves significant risks. Evaluate carefully and invest wisely!

Conclusion

The blockchain gaming market is still nascent and full of potential, but it also carries risks. Evaluating a Web3 game requires considering numerous factors, including the development team, technology, gameplay, community, and specific operating metrics. Investors need to be adaptable, constantly updated, and objective in analyzing information to make effective investment decisions. Connecting with the blockchain gaming community is crucial for gaining valuable insights and knowledge.