Play-to-Earn games: How Blockchain is building Game Economies

play to earn economies

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August 17, 2022

The predominant form of gaming in the past decade was Free to play. The model involves free giving away the gaming experience while monetising on in-app purchases. However, it lacked transparency and gradually became adversarial to single players by favouring larger accounts. 

Then came the “Pay2Win” games setting, where wealthy players or “whales” have a definite edge by purchasing their way to better equipment and a quicker growth rate. Due to their inability or unwillingness to pay for such luxury, most small players are disadvantaged. They must work hard for weeks or months to obtain the same gear for free.

Furthermore, the gaming industry worked in silos. Players spend money on virtual goods that they don’t actually possess and frequently aren’t able to exchange for cash. For a few months, players like one game in particular, but ultimately they get bored and switch to another. They won’t be able to sell the rare products they worked so hard for months to obtain when that moment comes. They are practically dead assets since they are trapped in the walled garden of that game.

Key takeaways:

Play-to-Earn(P2E) prioritises player engagement above financial gain. P2E is based on three fundamental ideas:

  • They are giving talented players opportunities to earn as a reward for their game engagement typically in the form of open market dynamic in-game currency.
  • Improved control over digital assets. Players control their assets, which they may trade and earn money.
  • Participatory and open in-game economy. Creating different experiences on top of the game’s primary experience is permitted and encouraged by game creators.

Transitioning to blockchain-based gaming

In the past, no development company had the resources to create a robust market replete with an in-game currency and open standards for game content. Blockchains, however, provide game makers access to economic building elements. With technology, developers may introduce a token within an hour or designate some game components as nonfungible tokens (NFTs). With no additional production costs, this allows consumers strong property rights and the freedom to export their characters and assets from the games to third-party marketplaces or even other games.

Play-to-earn as a source of income

According to Playtoearn.net, over 800 blockchain-based video games let you receive prizes in the form of cryptocurrencies or NFTs. More than 200 of them are live. The majority launched recently, with the top P2E game, Axie Infinity, debuting in March 2018. Since then, its value has risen to $3 billion.

Axie Infinity helped thousands of gamers in the Philippines, and other developing nations cope with job losses during the COVID-19 pandemic. The key to its success lay in granting its players solid property rights. In-game items could be removed by players and traded on external marketplaces like OpenSea. As a result, a tsunami of economic activity both within and outside the game was released.

Leah Callon-Butler, a blockchain consultant, based in the Philippines, observed that the epidemic provided the ideal setting for this game to draw players from all walks of life.

She added that they might play a nice game at home while being safe from the virus and making money off it.

In addition to offering a new way for consumers to make money by playing video games, “play-to-earn” also upends the cryptocurrency market by allowing investors to invest in a different sector and for crypto holders to get a dividend. It’s establishing a three-way economy of wealth creation while also making it easier to enter the cryptocurrency space.

Rent-to-earn

So you don’t want to play the game? You can still earn passive income from P2E by owning NFTs and renting them to guilds. This trend is relatively new to the NFT industry, but it has received much attention. Although not many guilds provide this service, it will surely become famous, just like P2E.

Blockchain-based games making a splash

Having discussed the OG of blockchain gaming – Axie Infinity, these are a few other blockchain games to check out. 

  • Cryptokitties: It is the first game built on the blockchain. The game focuses on gathering, breeding, and selling virtual cats. Every cat is an NFT, a unique blend of “cattributes,” status, generation, and other factors. These cats, which are controlled by 12 separate genetic cattributes, are collected and bred by players. Fancy, special edition and exclusive kitties don’t follow those rules and have rare attributes.
  • Decentraland: Decentraland may be a suitable game for you if you appreciate playing open-world games where your avatars may interact, purchase land, and construct custom stuff on it, but you also like the concept of genuinely owning, purchasing, and selling such assets as NFTs. In this metaverse-style game, LAND owners may do anything they want with their property. They can vote on district-level governance issues to help shape the community’s future.

Gods Unchained: Players in Gods Unchained begin with a deck of fantasy cards and can then engage in multiplayer competitive gaming. Players get cards, FLUX, the game’s money, and an upgrade token.