Cryptocurrency and blockchain technology are creating new possibilities across economies while redefining familiar products and experiences, and the gaming industry is no exception.
One of the fastest-growing blockchain developments in gaming is the concept of Play-to-Earn –that is, a model by which players can gain financially valuable in-game assets by participating in the game. Players then realize the value of these assets by trading or re-selling to other users in what becomes a sort of player-controlled economy. As a result, everyday gamers can now earn money, or an asset with equivalent value, by simply playing a game.
How did we get here? What does play-to-earn (P2E) look like? And where is it heading?
In the article below, we’ll discuss the evolution of the play-to-earn ecosystem and its implications for the future of gaming.
Predecessors of Play-to-Earn
In ancient times (about ten years ago), most players interacted with games in a direct consumer relationship. Developers would release games, which players then purchased in hard-copy or downloaded from a digital shop after buying a license.
This is still common practice, but free-to-play games have shaken up the traditional consumer model more recently. Free-to-play games, as suggested by their name, are free to play, with options for in-game purchases that grant players increased access or premium accessories. Fortnite represents the largest and most successful free-to-play game in history.
An even newer innovation, play-to-earn, borrows the idea of using micro-transactions for in-game accessories. However, rather than the developers selling to players, players may earn items and later sell or trade them to other players – a system that decentralizes the flow of money in and around the game.
Play-to-Earn in Action
As mentioned, blockchain and cryptocurrency are two technologies fueling the play-to-earn revolution.
Sometimes, the items that gamers earn within a game are cryptocurrencies themselves, which function as a sort of in-game currency. In other instances, players may be rewarded with particular items, such as a suit of armor or virtual land, which are then tokenized on the blockchain to allow them to be transacted game assets.
Play-to-earn has also spawned several related offshoot models. For instance, in learn-to-play or participate-to-earn games, users are “paid” simply by interacting in particular ways, such as by liking posts or commenting.
Another offshoot is create-to-earn, where users create unique items in-game, such as art, and then sell them to other players to earn network tokens.
For examples of some of the most popular earn-to-play games, check out this list.
Play-to-Earn: A Game Changer?
As when any new technology catches on, play-to-earn gaming models have begun to change how people on both sides of the consumer aisle interact with video games.
Shift in Power
Most notably, play-to-earn games mean that the flow of “money” is no longer unilateral from players to developers. Rather, the exchange of money becomes multi-directional, so players may now share in the financial earnings of a game.
Lower Barriers to Entry
Player-owned economies within games also have the potential to lower barriers to entry.
In the popular P2E game, Axie Infinity, gamers initially needed to purchase monster packs to participate, thus excluding players who could not afford them. However, thanks to the power of player-to-player exchange, monster pack rentals became available, lowering the financial hurdles to join the game.
Grassroots Development
Play-to-earn games also facilitate player control over the development of the game itself. With the power to trade tokenized items in-game, the gamers themselves influence asset allocation, thereby deciding who gets what.
Even more blatantly, create-to-play games enable users to make new items for use in the game’s universe.
Future Earnings
Alexis Ohanian, founder of Reddit, has taken a bold stance on play-to earn games, saying that 90% of games will follow a play-to-earn model over the next five years.
If we look to the progression of other blockchain applications, he may not be wrong. Blockchain enthusiasts are constantly searching for new ways to use the technology, which has resulted in innovations like smart contracts and cryptocurrency itself.
Certainly, they will continue to look for new uses within the play-to-earn model for games, making the concept more attractive to a growing audience.
