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Gaming rewards stand at the forefront of any interactive gaming landscape to capture the players’ attention worldwide.  According to Statista, the revenue projections for the video game industry are expected to surpass 200 billion U.S. dollars. Surprisingly, it recorded double-digit growth from 2020 to 2021. It goes on to show the higher level of engagement and loyalty.

One of the key elements driving this engagement is gaming rewards. Gaming involves a certain amount of emotional attachment with the players, which generates engagement. Research published by the American Psychological Association proves that “gaming-specific gratifications are closely related to players’ enjoyment but also their appreciation of the game.”

Therefore, this blog will cover gaming rewards, exploring their impact on player engagement and the strategies behind creating compelling reward systems.

What are gaming rewards? 

Gaming rewards are a web of in-app incentives built into video games. These gaming rewards come in the form of prizes or bonuses that players earn while playing video games.

They can also include virtual currency, rare items, or special achievements. The primary aim of including such variations of rewards is to build player loyalty and increase retention rate while encouraging day-to-day engagement. 

The impact of real-time gaming rewards and incentives in the gaming industry

 The primary goal of any game is to keep the gamers entertained and hooked. This engagement cements the foundation of player motivation. The impact of real-time gaming rewards and incentives follows.

1. Helps in engagement and retention

Adding rewards and incentives motivates players to form long-term engagement, improving retention. Moreover, earning rewards through the game creates a positive feedback loop, propelling gamers to invest more time and effort into the game. 

2. Operates as a monetization strategy

In-game transactions happen when players progress positively in the game. When players unlock the complex levels to get more rewards, they feel like they're moving forward. 

This makes players more likely to buy things in the game, like upgrades or items, because they're linked to rewards. This monetization strategy serves well in terms of improving interaction levels. 

3. Assists in acquiring loyalty

Adapting the game to players' preferences, understanding their psychology, and giving rewards make players want to return. Moreover, rewards show players that their efforts are recognized, and this ongoing incentive helps build a loyal player community.

4. The intrinsic value that comes with the psychological push

Rewards and ongoing incentives serve as positive reinforcement that taps into the psyche of a player’s behavior. This positive reinforcement helps reinforce certain behaviors, making players more likely to repeat them. 

However, some challenges hinder a gaming organization from acquiring loyalty and creating a persisting engagement level.

Challenges in the gaming industry

Keeping up with new technology and changing player interests can be hard in the gaming industry. So, the following are the challenges in the dynamic landscape of gaming rewards in the respective industry:

1. Low user engagement score, which leads to a low DAU/MAU ratio

A low user engagement score means players aren't actively involved in the game. They might not log in often, play for short periods, or engage much with in-game activities. This leads to a drop in Daily Active Users (DAU) and Monthly Active Users (MAU). Technical problems, rewards that don't excite players, and a lack of new content can all contribute to this.

2. Less session duration of gamers

Game duration becomes shorter due to repetitive gameplay, a lack of fresh content, and technical issues. Players can tire if the game doesn't give them breaks or change things; distractions can worsen it.

Moreover, ineffective and unsatisfactory rewards also make players lose interest faster, affecting engagement and interest.

3. Low K factor

A low K factor in gaming means the game struggles to attract new players through its existing user base. This happens when the game lacks social features, viral mechanics, or complex onboarding processes.

All these factors limit the game's reach. Additionally, the game's virality suffers if players don't have enough incentives to invite friends or have poor engagement and negative community interactions.

4. High Customer Acquisition Cost

When the Customer Acquisition Cost (CAC) is high, it costs a lot for game developers to get new players. This can be because of expensive ways to attract users or lots of competition that requires spending more money. To deal with a high CAC, developers need to improve their marketing, find better ways to get users and ensure players stick around longer to make new ones cheaper and more reliable.

5. Lower Daily Active Users rate

The drop in Daily Active Users (DAU) in gaming means fewer people play games regularly. This could happen because of problems with the game, more competition from other games, or insufficient new and exciting features.

Employing proven strategies is essential to overcoming the complexities of gaming rewards. Let's explore effective methods gaming industry mammoths used in their game to enhance engagement levels through rewards.

6. Less organic users

Fewer players find and join the game independently because it's not spreading through word-of-mouth or social sharing. This means the game lacks features that make people want to tell others about it.

To fix this, developers need to add more ways for players to interact socially, make the game more shareable, and create a friendly community to help the game grow naturally.

Reward and incentive strategies to level up engagement in the gaming industry

Incorporating rewarding strategies in games boosts player involvement. This means giving appealing rewards like special items or character upgrades to keep players interested. To maintain player interest and build a community, follow these strategies:

1. Intrinsic vs. extrinsic motivation in gaming

Rewards and incentives play a pivotal role in both intrinsic and extrinsic motivation. Regarding intrinsic motivation, rewards can enhance the player's internal satisfaction and enjoyment by providing a sense of accomplishment, progression, or mastery within the game. 

However, extrinsic motivation is fueled by tangible rewards such as in-game currency, virtual items, or achievements. The goal of external recognition and incentives allows players to engage with specific tasks or challenges. 

Example: In games like "World of Warcraft," players find motivation from the immersive world and the reward system. For example, seasonal events offer limited-time rewards, PvP battles give powerful gear, and XP points show a player's progress. 

These rewards keep players engaged and competitive, encouraging them to keep playing and advancing. Limited-time events create urgency and excitement, while XP points continuously motivate players to improve their character.

Furthermore, according to a research paper, “Personality Profiles Associated with Different Motivations for Playing World of Warcraft,” the impact of personality traits motivates the player.

It establishes the relationship between player types and desires for achievement, socialization, immersion, etc. 

The growing number of player base cements this strategy. According to MMO, the estimated daily player count for World of Warcraft is 1,284,876, with a total player base of 135,250,053.

3. Assessment of player profiles and tailored incentive approaches 

Assessing player profiles and using personalized incentives in gaming can boost cost-efficient customer acquisition. Moreover, if one understands what motivates players, that can help developers tailor offers. So, offering customized rewards like gift cards and experiences through platforms like Xoxoday can attract diverse player segments.

Example: In "Fortnite," developers use player data to create personalized challenges like Seasonal. These challenges match the current in-game season's theme and offer exclusive rewards like unique skins and emotes. 

So, by tailoring rewards to individual players, Fortnite keeps players engaged and satisfied. Such an inclusion leads to continued play and spending in the game. This strategy has helped Fortnite succeed by catering to different player preferences and ensuring players pursue interesting goals.

A research paper corroborates this statement, ‘Predicting Player Power In Fortnite Using Just Neural Network.’ Fortnite uses player data for personalization to enhance engagement and increase spending.

Due to that, estimated Fortnite to have close to 237 million active players between January and February 2024. 

3. In-game currency and virtual goods

Using in-game currency and virtual goods as incentives can help games grow naturally. Game points encourage players to stay engaged and earn or buy in-game currency for necessary virtual items. 

These rewards create a cycle where players keep returning for more, and showing off these items can attract more players to the game. 

Example: Roblox uses a strategy where players buy Robux, a virtual currency, to enhance their gaming experience. With Robux, players can buy clothes, accessories, and other items for their avatars. This helps players level up and enjoy the game more. 

The strategy makes the game more personalized and enjoyable for players. It's a big reason Roblox is successful in the U.S. gaming market. Robux creates a virtual economy that keeps players engaged in the game's vast world.In 2020, the number of people using Roblox daily increased by 85%, reaching 32.6 million compared to the previous year.

Revenue also saw a significant rise, jumping by 82% to $924 million. This increase in revenue is mainly due to the small purchases, known as microtransactions, made by players while they are in the games.

4. Define clear rules and objectives

A simple strategy means making clear rules and goals in the game to keep players interested and control costs. When gameplay rules are clear, players enjoy the game more and know what to do. Goals like finishing tasks or joining events motivate players to stay engaged. 

This plan aims to keep current players and get new ones through good reviews and community events. Offering rewards that match these goals helps keep costs low and attracts more players to the game in the long run.

Example:Call of Duty: Warzone’ sets clear rules and goals, making gameplay exciting. Guidelines are well-defined, covering map limits, teamwork, and winning conditions. Events like Christmas specials offer challenges for players to enjoy together. 

Players are rewarded for daily participation, earning tokens and event cards to unlock personalized prizes. These unique rules keep players engaged, adjusting strategies to match event guidelines. Goals like completing contracts and securing loot promote teamwork and skill improvement.

Clear rules and objectives improve the gaming experience, making "Call of Duty: Warzone" successful and immersive.The average number of participants for Call of Duty Season 4 now stands at 65,775, with a peak player count of 113,002.

The game has taken a positive step towards regaining its former glory by incorporating some of the community's requested features, including player health, armor plates, and more. 

5. Implement progression and scaling

Recording progress and implementing scaling strategies are effective for sustainable growth. Progression in the game means leveling up, unlocking new features, reaching milestones, and giving players a sense of achievement. 

When progression is linked with scaling difficulties, it keeps players engaged. So, offering rewards and incentives at each milestone motivates players to aim for higher levels. Rewards like in-game perks and points recognize achievements and encourage continued play. 

This integration boosts player satisfaction and fosters organic growth, optimizing the rewards system for lasting success.

Example: In "World of Warcraft," advancing and growing strategically is clear. Players level up by completing quests and getting better gear, earning rewards for overcoming challenges. This keeps them engaged. 

As players progress, the game becomes more complex and challenging, promoting skill development and a feeling of achievement. This dynamic gaming experience keeps players motivated and enhances their satisfaction and retention.

As per Gitnux, World of Warcraft boasts an estimated daily player count of 2,360,076 and a total player base of 124,214,500. These figures suggest considerable ongoing engagement with the game.

Moreover, they highlight the effectiveness of its mechanics and strategic advancement system in retaining players.

6. In-app engagement

Using rewards and incentives strategically can boost in-app engagement. Offering rewards for completing activities or hitting milestones motivates players. Virtual currency, like game points or exclusive items, further entices engagement. 

Aligning rewards with in-app actions enhances satisfaction and optimizes the experience. This creates a positive feedback loop, driving sustained engagement and boosting the game's success. 

Example: Games like Clash Royale effectively engage players through limited-time events, social challenges, and daily rewards. These features encourage regular log-ins and create a sense of community and competition.

Developers keep the experience fresh by updating content regularly. Continuous balance changes, card introductions, and other Clash Royale content updates have increased players' engagement.

Moreover, according to Esport Charts, these updates enabled Clash Royale World Finale to see a peak engagement rate with a player base of 3,61,849.

Let’s look at how these strategies can help improve player engagement and interaction levels with real-life implementations through our case studies.

Case studies

1. Xoxoday drives 92% engagement over 3 months for one of the leading game developers in South East Asia 


The challenges that the leading game developer in SE Asia faced included: 

  • low user engagement score
  • less session duration
  • lack of viral factor in the game 

Upon inspection and in-depth analysis, we concluded that a low user engagement score occurred due to the absence of incentives and in-app gamification. Such an aspect resulted in a minimal number of users engaging or returning daily. 

In addition, the session duration, which hit an all-time low, was impacted as an average user spent less than three minutes within the application. The reason was the lack of attractive hooks that could not sustain engagement. 

Lastly, a low K factor adversely affected the viral factor, making acquiring new users difficult. This contributed to a high cost per lead. These challenges in user engagement and virality acquisition in the game must be addressed to improve the user experience and optimize the acquisition cost. 


The solutions we offered included:

  • In-app gamification
  • Single click redemption
  • Global redemption

Incorporating in-app gamification allowed users to earn game points for achieving milestones within the game. These milestones were tied to the metrics developers and management wanted to improve. 

Single-click redemption simplified the process of redeeming video game rewards. Moreover, improved user experience and gameplay. Global redemption extends this convenience worldwide, allowing users to redeem rewards across different countries through the global catalog. 

Engaging the players through Xoxo points was a perfect approach. Xoxo Points made the user experience fun. Gamers received delightful rewards for completing milestones within the game, affecting the drop-off rate due to instant reward points and keeping gamers engaged.


  • The number of new users via referrals drastically increased due to using Xoxoday gaming rewards. 
  • The games where Xoxoday  Rewards were implemented saw a 200% increase in session duration. 
  • Increase in the ratio of daily average users to monthly average users from 5% to 25% due to high user engagement.
  • Lastly, reduced Drop-off Significant reduction in monthly churn rate due to the introduction of in-app video game rewards. 

2. Xoxoday reduces CAC by 74% of a leading China-based game developer


The challenges that leading china-based game developers faced:

  • Very high CAC
  • Low DAU
  • Low percentage of organic users

Upon inspection of the engagement metrics, we found that the cost of acquiring new gamers was significantly higher, primarily via Baidu Mobile Ads, which led to a decline in the organic growth of users. The DAU rate was on the lower side and kept decreasing as users were not sending invites to their friends or acquaintances despite incorporating several nudges. In addition, a significant portion of new users opt for paid subscriptions upon onboarding. 


Based on the challenges, Xoxoday came up with two approaches:

  • Automation of the reward system with Xoxoday Rewards API
  • Global redemption of gaming rewards

The Xoxoday  Rewards API helped streamline the reward process while ensuring efficiency and accuracy in recognizing and delivering user incentives within the gaming platform. This promoted their morale and improved the engagement rate, leading to increased organic user growth. 

Xoxoday recommended a global redemption strategy for gaming rewards. This approach allowed users to redeem their earned rewards across a global network, enhancing user satisfaction and engagement on an international scale, thus improving the DAU and CAC.


  • Reduction in CAC by over 70%
  • The percentage of organic users increased from 10 to 65% for 6 months
  • More people who were playing invited their friends & acquaintances thanks to the incentive program. 

3. Reality Games improve player satisfaction levels using monetized surveys and guaranteed payouts

Reality Games is a leading mobile game developer transforming gameplay by integrating live, real-world data. They redefined gamification by centering it around big data. Moreover, they incorporate real-life locations, objects, and items into their in-app experiences for an unique delivery.


Reality games sought to enhance user experience and engagement in their strategy mobile game, Landlord. Players trade strategically to build real estate empires featuring the world's iconic landmarks. However, some users faced challenges in advancing due to the game's reliance on virtual currency. The company aimed to address these barriers and inspire higher levels of engagement among all players.


Reality Games partnered with TapResearch to implement rewarded surveys within the Landlord app. Unlike traditional survey platforms, TapResearch's Guaranteed Payout™ system ensures that users receive rewards regardless of survey completion.

Additionally, TapResearch provides access to a vast pool of survey opportunities from leading market researchers, offering a reliable method for users to earn virtual currency and access premium content.


  • Enhanced player satisfaction: The guaranteed payout system significantly increased player satisfaction by ensuring rewards proportional to survey participation, even if users were dismissed or disqualified.
  • Increased revenue: Within three months of launch, Reality Games witnessed a 2x increase in revenue compared to previous survey solutions. This growth is attributed to TapResearch's ability to deliver high-quality survey experiences that benefit both publishers and players.

Elevate the gaming engagement level with Xoxoday integration

With the surge in mobile and desktop gaming, game developers and companies must use innovative ways to engage and retain players. Integrate Xoxoday’s global rewards catalog with over 1 mn+ options to give your players access to exciting rewards, keeping them engaged and loyal.

Xoxoday provides a seamless and diversified approach to reward systems to enhance the overall gaming experience in the following ways:

  • Avoid high fees, as much as 30%, charged by Google, Apple, and Amazon with Xoxoday  Reward Marketplace for redemption programs.
  • Xoxoday platforms guarantee 99.9% uptime to accommodate large player influx during peak hours.
  • Flexible Payouts - Cash payouts are transferred directly to the users via options like ACH, Virtual Visa and Mastercard, Venmo, UPI, Paypal, and more for instant gratification.

Leading gaming firms including Gameskraft and Ubisoft have partnered with Xoxoday to leverage the largest global rewards marketplace. 


Tangible and intangible gaming rewards given to the users can benefit the gaming platforms by boosting player engagement retention and attaining higher satisfaction. 

The strategic implementation of rewards, such as in-game currency, virtual goods, and personalized incentives, will motivate the players. It will prompt them to contribute to the organic growth of gaming communities. Moreover, each content update will give them a chance to improve themselves. 

As the gaming industry evolves, rewards and incentives will be a key driver in fostering a dynamic, engaging, and sustainable relationship between players and gaming platforms.

Nagma Nasim

Nagma Nasim

Nagma is a content writer who creates informative articles, blogs, & other engaging content. In her free time, you can find her immersed in academic papers, novels, or movie marathons.