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Play & Earn Bitcoin — *Source: Google Play*

Play-to-earn (P2E) games gained prominence post-COVID but quickly nosedived once their economic unsustainability was exposed.

While the stain on P2E remains, web3 gaming is far from dead. In fact, new forms of rewarded play are still being tested. And even if you’re not interested in web3 gaming, discovering how these different forms are being tested can offer valuable insights.

Of course, these concepts aren’t new – loyalty and reward programs have a long history, and in the mobile game world, we’ve long seen "offer walls" from companies like TapJoy which provide in-game currency for playing other games or completing offers. This has been evolving into more direct monetary rewards, like Cash Giraffe and JustPlay, where users earn points per minute of play in some games which can be redeemed for discounts and gift cards.

Despite the trend toward cash, it’s still tricky to reward money directly without proxies like gift cards, and that's where cryptocurrency can bridge the gap between virtual and real currencies. As an example, let’s take a look at one emerging rewarded play business that does things differently: ZBD.

How ZBD Works

ZBD’s service is focused on games and apps that reward players with Bitcoin. The key to making this work is fast, small, and cheap transactions.

Bitcoin’s Lightning Network — a layer two network that sits on top of Bitcoin to enable micropayment channels — makes transactions incredibly cheap and allows for values much smaller than $0.01. One common denomination of Bitcoin is called the Satoshi (named after Bitcoin’s creator), which is 1/1,000,000 of a Bitcoin.

While that value sounds small in terms of Bitcoin, when you start using the term"Satoshis"(or“sats” for short) instead of low Bitcoin or USD amounts, it creates a different perception. For example, giving away 500 “sats” sounds far more exciting than $0.32 (even though they’re worth the same), and aligns more closely with the kinds of value gamers expect from virtual currencies.

Why not just give dollars or other “real” currencies, you may ask? In short, there’s more regulation and red tape, not to mention the processing and transfer fees embedded in banking networks which make micropayments less feasible. In this case, a highly divisible and liquid digital currency is a much easier option.

The service ZBD provides allows game developers to focus on game development while using an SDK or API to handle the rewards. ZBD provides an account and wallet for players to receive rewards from different games using the service and “cash out” through ZBD's app. There’s no need for game developers to interact with blockchain elements themselves. Instead, they can treat it more like rewarding cash to incentivize play.

This, theoretically, gives developers a leg up in attracting and retaining players. On a previous Naavik Gaming Podcast episode, ZBD’s Chief Strategy Officer Ben Cousens told us: “The vast majority of developers on ZBD are sharing revenue back to the player in exchange for more retention and more engagement in their games. We’re in hundreds of games and pretty consistent across the board now with essentially every game developer experiencing double digit uplift in player retention and engagement.”

In order to manage reward amounts in a sustainable and profitable way, game teams should be flexible and dynamic so they can keep them around 10-20% of player LTV. This makes the most sense for ad supported games (or those with consistent purchases over time) so the retention gains pay for themselves. ZBD also often recommends game developers simply hand out rewards based on time played, assuming that time played largely correlates to revenue.

This type of rewarded play also modifies the way game teams should think about LTV versus customer acquisition cost (CAC). Rewards can lower CAC as it’s normally measured, but in reality the cost is shifted to a later stage. Some teams also try to link rewards to in-game spending, similar to credit card cashbacks.

The biggest benefit, though, is likely in retention. Mechanics such as daily withdrawal limits can be put in place to tighten economic controls, but when implemented well, the heightened LTV and ARPDAU benefits can be seen quite clearly.

How Effective Has This Been?

Bitcoin Miner, an idle game themed around earning Bitcoin, originally struggled to get any traction but has become one of ZBD’s most consistent use cases. At first, players didn’t actually earn any Bitcoin, just virtual currency, but in mid-April 2022 the game added actual Bitcoin earnings and updated the store page to advertise earning real Bitcoin.

The combination of a strong UA campaign and the new Bitcoin earning feature resulted in an overnight turnaround for the game of literally 100 times its downloads and revenue. Retention also became far more favorable, with Q2 2022 D1/D7/D30/D60-90+ retention rates of approximately 55%/20%/11%/8%. According to Paul West of Fumb Games (on the same episode), “Once the users had installed, they were very, very sticky. Retention was through the roof by double digit, even triple digit numbers.

The number of active users kept relatively stable despite a reduction in downloads throughout the rest of 2022 and 2023 before a big push, which started around October 2023, sent things soaring upwards again.

According to Sensor Tower, the last 30 days are estimated to have generated $182.8K in revenue, 250K downloads, and around 62K average DAUs. Retention numbers have also managed to remain close to the Q2 2022 numbers despite a downturn in crypto interest. In terms of the revenue pre player, ARPDAU has more than doubled from $0.02-$0.05 in 2022-2023 to $0.11-$0.15 in 2024, which is well above the reward payouts, estimated to be around 50 sats ($0.03) per hour of play.

Other Forms of Rewarded Play

ZBD has some other interesting reward systems in play. First, the Arcade section of ZBD’s app offers a number of non-integrated games alongside a list of tasks to complete from installing the game to reaching a high level. Each task offers an increasing sats reward that can reach over $100 USD. The trick is that players generally only get 15 or 30 days to complete the tasks and, for some of the games, the only way to reach those higher rewarded tasks in time is to spend money for faster progress. These lean more toward a "traditional offer wall" style UA, but with some large cash incentives to progress quickly through hardcore grinding and spending.

It’s difficult to attribute KPIs directly to ZBD’s reward features when a game is likely using a variety of UA and offer systems to promote it. Nevertheless, in order to get an idea of the potential effect of rewarded play, it’s still worthwhile to look at the recent performance of the highest rewarded games being promoted in ZBD Arcade.

*YTD changes to RPD/DAU. Focuses just on Android given its enhanced ability to provide rewards. | Source: Sensor Tower*

These games are likely doing a number of things to increase usage and spending, but being included in the ZBD Arcade certainly isn’t hurting. At the very least, getting decent rewards from the system often requires heavy time dedication and spending beyond the sat bounty provided. It’s also worth noting that both high profile and small, under the radar games can be found using these apps, which indicates that the ROI is worth considering.

There’s one more reward system called ZBD Playtime which literally pays players per minute of play. This system provides players with goals similar to the Arcade system but with bigger time windows, for example 90 days. The games listed here seem more focused on idle play with ads, but it’s worth noting that these offers rely on the game being new to the player and the install being attributed to ZBD.

The Bottom Line

We anticipate continuous growth and innovation in the field of rewarded play, especially as attracting and retaining players will remain hyper-competitive and costly. Of course, despite the various regulations in different parts of the world, it’s clear that, at least when it comes to ZBD and Bitcoin, more sustainable ways of providing crypto-based rewards without the P2E shenanigans are.

Beyond the rewards themselves, the idea of using new mechanics to change the math of UA, retention, and LTV overall remains underexplored. We expect and hope that more developers will seek out different options going forward. Rewarded play won’t be a fit for every game or every type of player, but there’s certainly still room to experiment and create simultaneous win-wins for studios and players in this space.

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