Current Play-to-Earn Ecosystem

The current Play-to-Earn Ecosystem is in a period of rapid growth with no signs of slowdown. Just a year ago, blockchain enabled gaming didn’t even exist. At this time, the broader crypto market was dominated by DeFi and many gamers weren’t even aware of what NFTs were. Today, blockchain gaming is estimated to be worth $1.5 billion with over 1,000 games on public blockchains. By 2025, blockchain gaming is predicted to grow to $50 billion and rival the size and scale of mobile, PC and console gaming.

Even during the current crypto downturn, blockchain gaming has remained resilient and continued to grow contrary to the broader market. Since December 2021, Etherum prices have dropped 30%, and this has been mirrored by the majority of all cryptocurrencies on the market. However, in this same period, the number of unique active wallets participating in Ethereum NFTs have gone up 180% and have hit all time peaks. Similarly, the number of unique active wallets participating in play-to-earn games is continuing to trend up while DeFi trends down. Consequently, this resilience shows the potential and strength of blockchain gaming as a concept. Although many other crypto applications may fizzle out with crypto winters and other negative catalysts, it appears that blockchain gaming is truly here to stay. However, the current games in the market notably lack significant entertainment value and pale in comparison to the quality of traditional games. The majority of games are simple turn based games like Axie Infinity or trading card games like Gods Unchained and Splinterlands. There is no interesting gameplay in any of these games and players have noted that it feels more like a grind to earn rather than actually playing a fun and entertaining game. Moreover, these games typically suffer from unbalanced gameplay that is heavily pay to win, and high initial investment fees to earn or be competitive in the game. Furthermore, some of the biggest games like DeFi Kingdom and Alien Worlds are not games at all, but gamified DEXs and liquidity pools. Within these games, there is no actual gameplay akin to traditional games, rather players simply complete chores and idle games. Finally, the current play-to-earn games that most resemble traditional games like Thetan Arena all fall plague to issue surrounding the optimal implementation of earning capabilities. In Thetan Arena, users have noted that it is almost impossible for free to play players to earn any money from playing, and there is a significant bonus for purchasing higher rarity NFTs. Consequently, many of these games have failed to captivate traditional gaming audiences as blockchain integration has made these games more like chores that users can play to earn money, rather than actually enhancing user experiences and supplementing existing in-game systems and economies.

Despite these shortcomings, all these games have reached astronomical valuations in short periods of time. Not only does this demonstrate the enthusiasm surrounding the space, but also indicates the potential success of a game that actually delivers on entertainment value while preserving the fundamentals of blockchain integration. Notably, all of aforementioned games have reached $1 billion fully diluted valuations, with all but Axie reaching this milestone within a week of launch. It is clear that there is significant demand for higher quality play-to-earn games that can be fully playable and earnable as soon as possible.