Play to Earn Gaming
Play-to-Earn Gaming promises to be the biggest advent in gaming history, looking to disrupt the traditional tenants that have dominated the $336 billion industry since its inception over 50 years ago. Historically, video games have followed a simple formula - players pay to play by owning either a physical or digital copy of the game. In recent years, we have seen a transition towards free-to-play games and freemium models that rely on in-game transactions for developers to earn revenue. In this model, all players have access to key gameplay features for free, but typically pay to purchase in-game boosts, premium content or cosmetic upgrades. Overall, games have followed a consistent model wherein players pay for time and enjoyment, and progression and in-game assets are limited to individual copies of a game.
Conversely, Play-to-Earn Gaming seeks to fundamentally upend this model by rewarding players with incentives that hold real-world value for time spent and game mastery. This is made possible through the introduction of blockchain technologies that allow true ownership of in-game assets and the ability to trade these assets on secondary markets. Because these assets are now stored on the blockchain, they can be easily verified and transferred between wallets. In-game rewards typically come in one of two forms: tokenized rewards and Non-Fungible Tokens (NFTs).
- Firstly, tokens take the place of traditional in-game currencies, and are typically earned through normal gameplay and used to purchase other in-game items. However, because these tokens are now on the blockchain, users can sell tokens they earn on secondary markets for a profit, or can choose to purchase tokens to speed up their in-game progression. And because these tokens are now sold on decentralized marketplaces, they are not subject to arbitrary rules made up by developers, but their value determined by market forces.
- Secondly, NFTs take the place of in-game assets and allow players to have true ownership of skins, characters, land and other in-game items. Similarly, blockchain integration allows these NFTs to be easily transferred and traded on decentralized marketplaces, where the value is determined by buyers and sellers and these assets exist separately to the actual game. Not only does this also provide another potential revenue stream for players, but they are now also able to sell their progression if they decide to stop playing a game, meaning that their initial investment is not lost.
Moreover, Play-to-Earn Gaming also benefits game developers as they can utilize these advantages to reach wider audiences. Traditional games typically only target one end of the spectrum of gamers. For example, most mobile games are typically only able to reach casual players who just want to pass time, while MMORPGs are typically only able to reach hardcore players who are willing to put in hundreds of hours into the game. However, the introduction of blockchain technologies and play to earn mechanics allow these games to expand their reach and even expand past traditional gaming audiences.
- Firstly, casual gamers are attracted by real asset ownership and the potential to earn back from playing. Because their initial investment into the game can be recovered easily, this is no longer a barrier for these players to start playing.
- Secondly, hardcore gamers are attracted by the potential of higher stakes gameplay. Blockchain enables wagering of in-game assets in a secure way, and also rewards top players with higher rewards and incentives.
- Finally, non-gamers are attracted by the earning potential of these games and the ability to make a living out of these games. We have already seen this with Axie Infinity and the large proportion of its audience that live in third-world countries like the Philippines and Venezuela and subsequently are able to make a living simply by playing the game.
Overall, this is also demonstrated by the user base of Thetan Arena, a popular play-to-earn MOBA/Battle Royale on mobile devices. Within its top 9 user countries, 6 countries also lie in the top 10 traditional gaming countries, demonstrating its appeal to mainstream audiences. However, the other 3 countries are developing nations that have not traditionally big gaming markets. Notably, the top user country is Brazil, which reinforces the ability of blockchain games to reach new audiences that traditional games have historically not been able to penetrate. Overall, the potential for game developers to expand their reach will have broad appeal and help push forward the transition to blockchain gaming.
Finally, blockchain gaming presents an exciting opportunity for a correlation between games that has never previously been possible. The idea of the metaverse has gained mainstream traction with companies like Meta (previously Facebook) expanding rapidly into the metaverse as the new frontier of technology and the internet. However, this idea is deeply rooted in gaming as blockchain enables in-game assets to be easily transferred and applicable to multiple game titles. This creates a seamlessness in user experiences that will break down many of the barriers that prevent the accessibility of different games.
Imagine a future where all games are connected by a single metaverse, where you can transition easily between game titles without having to close and reopen new games, and where your progression and assets in one game can potentially have utility in another game title. Ultimately, this creates an exciting and unprecedented future potential for the gaming industry as a whole and will inspire new projects to think outside the box and reinvent the way that we have traditionally thought about gaming.