Why Play to Earn Games are About More than Earnings

Play to earn, or P2E games, are clamouring for attention. But there is no one type of game that can be called the typical P2E. Game types range between casual and highly competitive, 2D strategies and full immersive metaverse experiences. Blockchain games also range in their goals, from being a thinly veiled financial tool to having just a small side option for earning tokens.

P2E games are a continuation of the free-to-play model, where grinding is one of the central activities. Resource-gathering mechanics were one of the first game tools to be connected to token usage. What this meant was that players would perform game actions to gain scarce tokens. Tokenization spread to hyper casual games, e-sports, puzzle games, racers and other styles.

This earning opportunity arrived just at a moment when the market for cryptocurrencies was not only hot and bullish, but also more and more accepted as a legitimate source of earnings. Early games gained entry to some of the most widely used exchanges, meaning their tokens were as good as dollars, for those who wished to monetize their gaming passion. Play to earn simply takes in-game rewards and finds a way to swap them for cash.

P2E games also use the appeal of upgrading your gear and character skills. Not all token earnings are used to cash out – some games want to plow back some of the tokens, to be used for leveling up, equippable items, skins and whatever keeps the wheels of players spinning.

P2E games gather between 10,000 and 50,000 players per day, who also engage with the blockchain. This number is far below daily traditional gameplays, but some games show a growth trend. P2E games such as Axie Infinity were also one of the leading ways that a wider public got acquainted with crypto tokens and non-fungible collectible items. Axie Infinity was also the first game to have more than $4B turnover in trading its playable characters.

Why Some P2E Games Seem to Fail

The P2E gaming trend started off with true enthusiasm, as well as greed for easy earnings. Both game studios and teams wanted to push the model to its limits, while making use of the booming crypto market.

Unfortunately, this led to the strip-mining of games and players’ fatigue. Some of the hottest games from the summer of 2021 peaked in available payments, then entered a more gradual, but long decline. This scenario happened to games like Axie Infinity, Pegaxy, Town Star and other games that gave away excessive rewards so that the reward token lost 90% of its value.

The losses, however, don’t need to be permanent. Games can choose to pivot, add new use cases to their tokens, initiate a token burn to decrease supply, or create collectible in-game items to be paid with those tokens. This circular economy, which feeds back into the game, is one possible workaround to a dumping token price.

Games also work with season-based activity, to make the best use of their player base. Competitive spirit brings peak activity to most P2E games during tournaments or special events.

Do Games Need Blockchain Solutions

Gaming is an industry valued at nearly $200B worldwide. But most of the value is external to the game. A player may spend days accruing items and wealth, with no way to share it, export it or monetize it. The rise of streaming was one way that players tried to own their gaming efforts and gain from them.

The ability to keep items in the form of non-fungible tokens (NFT) or to receive rewards that actually have value outside the game is one way that players can claim a piece of the value of gaming. The challenge for P2E games is then to boost engagement and fun, while distributing fair rewards.

This is why one of the most successful models includes metaverse games. Projects like Decentraland, The Sandbox, NFT Worlds and other immersive experiences offer an endless exploration and quests, while also offering players to own parts of the map. After spending many hours on the game, players can then recoup value by reselling digital land, or their upgraded and equipped characters.

Some games have tried to allay fears about blockchain and crypto usage, by offering a free-to-play, no token version. This easily boosts the player count, while also reaching a wider audience. For others, the usage of browser wallets makes access to games rather easy, with a direct tool for cashing out.

For other games, tokenization is an extra and serves as a marketing tool. Already established game franchises such as Gunship Battle have added a blockchain version. Other games use the appeal of NFT collections to boost their popularity and build anticipation ahead of launching.

Tokens and assets belonging to P2E games may have a volatile valuation and pose risk of real financial losses. Game mentions are not investment advice. Do your own research before buying and using assets in a P2E game to avoid market risk or loss due to technical problems.