Introduction
Southeast Asia is a key market for Web3 games, with many gaming companies seeking expansion.
This is due to the region's large population of young people familiar with Web3 culture, and the popularity of the P2E model in the past has established a strong user base.
However, as token prices have fallen, investment-oriented users have drastically decreased, leading some to believe the market is no longer as attractive as before.
This raises a question: Is the Southeast Asian market still a high priority for Web3 gaming companies? In this report, we analyze the current state of the Southeast Asian Web3 gaming market, examining its attractiveness and the opportunities and challenges it offers.
Are there still many Web3 gamers in Southeast Asia?
Due to the overall decline in cryptocurrency market prices, the number of Web3 game users in Southeast Asia has indeed significantly decreased. Many players in the region were so invested in P2E games that they took loans to participate, resulting in financial losses and a massive market exit.
However, despite the decline, Southeast Asia still holds a significant proportion of Web3 game users. The market shows a downward trend, but the participation rate of Southeast Asian players in recently released Web3 games remains high.
In fact, an analysis of website traffic for major Web3 games over the past three months shows that countries like the Philippines and Indonesia continue to form the core user base.
Beyond website traffic, the popularity of the Southeast Asian region is also reflected in the country channel selections on the Discord of the Web3 game Pixels. As seen above, the number of players from Southeast Asian countries is exceptionally high, accounting for about 53% of the total. We estimate that their continued interest and high participation in Web3 games are driven by the following three factors:
Web3 Games Still Profitable
The active participation of Southeast Asian users in Web3 games is mainly for economic benefits. These games are seen as a way to generate substantial income.
For example, the daily minimum wage in the Philippines is about 10 USD, while participating in P2E games can potentially earn an equal or even higher income.
According to a recent survey of Pixels game players, as one of the most popular P2E games, casual players only need 4 to 8 hours of gameplay per day to earn about 50 PIXEL tokens, equivalent to 11 USD.
For more skilled intermediate players, daily earnings can reach 200 PIXELs, about 45 USD; and for high-level players, daily earnings are as high as 400 PIXELs, about 92 USD.
Considering the potential growth in token value, these earnings continue to attract Southeast Asian users.
Relatively Relaxed Regulatory Environment
The Southeast Asian region has not yet established a clear regulatory framework for Web3 games, which has promoted rapid market development in the short term. It lowers the market entry difficulty for developers and players, thereby stimulating market vitality.
Survey results of Korean players' sentiment towards P2E games (n=6,324)
To understand this further, we can compare the situation in South Korea. South Korea has implemented strict regulatory policies on P2E games, making it almost impossible for these games to operate locally.
P2E games in South Korea are not only difficult to legalize but also to monetize, and are generally viewed negatively. This stark contrast highlights the relative advantage of Southeast Asia in the Web3 gaming industry.
Challenges and Opportunities in Southeast Asia
Southeast Asia holds a pivotal position in the Web3 gaming field, with its large user base forming the backbone of the market. Nevertheless, the market also faces some significant challenges.
Issues with token farming operations are common across the Web3 gaming industry and are not limited to the games themselves. For instance, recent Vietnamese users showed high participation enthusiasm in HashKey's airdrop event, and this excessive activity even raised HashKey's suspicion of possible token farming operations behind it, ultimately leading to HashKey blocking Vietnamese phone numbers.
This incident highlights the need for further regulation and integrity improvements in the Web3 gaming industry.
Even if users do not participate in token farms, another problem still exists in the Web3 gaming field: users may overly rely on reward mechanisms. If rewards are reduced or canceled, users may lose the strong motivation to continue participating, which could significantly reduce the number of real contributors in the long term, posing a threat to the healthy development of the entire ecosystem.
However, reward-driven incentive mechanisms remain a key factor in the operation of Web3 games. The high sensitivity to rewards is a core driver for user participation in Web3 games.
Southeast Asian users are willing to invest under the attraction of rewards. Although not all users participate in games for long-term and healthy motives, their active participation plays a crucial role in the formation and development of the emerging ecosystem of Web3 games.
This further promotes Southeast Asia as an important market for gaming companies, as the region's Web3 games show a high rate of in-game purchases. Although Southeast Asia is generally considered a region with low purchasing power, Web3 games here exhibit a positive payment trend, resulting in significant in-app purchase volumes.
Especially in the Philippines and Thailand, WeMade's Night Crow and Mir 4 rank third and fourth in in-app revenue, highlighting the market's potential. Overall, the Web3 gaming market in Southeast Asia is a complex and dynamic market full of opportunities and challenges.
Conclusion
Although the Web3 gaming model has evolved in recent years, its core value—rewarding users—remains unchanged. For example, the immediate reward mechanism of the P2E model has gradually evolved into the P2A (Play to Airdrop) model, which offers future tokens as rewards.
Despite the change in form, the core position of the user reward mechanism remains unshaken. For this reason, the Southeast Asian region, with its high sensitivity to rewards, is likely to continue as a key market for the Web3 gaming industry.
The attractiveness of the Southeast Asian market is based not only on rewards but also on several other factors: 1) a large population with a low median age; 2) a user base with a high willingness to pay for Web3 games; 3) internet cafe culture and Web3 guild culture, expected to play a significant role in the development of the Web3 gaming market.
The Web3 gaming market is still in its early stages of development, and the Southeast Asian market plays a crucial role in this process. The region's users not only actively participate but also make substantial contributions to the progress and innovation of games through their participation.
Southeast Asia is gradually becoming a testing ground for extensive testing and large-scale application of Web3 games. Although securing a stable user base in the short term may pose challenges, it also provides valuable opportunities for verification and improvement in various aspects of the games.
In summary, with its unique advantages, the Southeast Asian market remains an attractive area for the Web3 gaming industry. If Web3 gaming companies can deeply understand and effectively utilize the characteristics of this region, they are likely to achieve business growth and expansion.
