The Future of Play-to-Earn: Sustainability, Development, Prospects

Gaming has long since ceased to be considered a useless activity. If people who spend most of their time playing on computers or phones were previously misunderstood or even ridiculed, now, gaming is considered a fairly large and profitable business. However, today I’m going to talk about games that aren't quite ‘ordinary’. 

With the development of the DeFi industry, the popularization of cryptocurrencies and the NFT movement, the Play-to-Earn game genre is becoming increasingly popular and is allowing players to earn good sums, besides being a pleasant pastime. 

However, is everything as rosy as it seems? And what are the pitfalls hiding behind this appealing concept? Let's find out together in the article I have prepared especially for you. 

What is Play-to-Earn?

Source: Holdnaut

If you're reading this article, you're probably already familiar with the term ‘Play-to-Earn’ and may have even tried a few games that fall into this gaming category. But it's never a bad idea to go back to basics, so I'll take the liberty of diving into the theory and share some basic information about what the Play-to-Earn industry is all about. 

Play-to-Earn is a relatively recent concept in the world of video games. Simply put, I can say that P2E games are video games in which players can earn rewards that have real value. Of course, you could make money from ordinary games by selling in-game items in unofficial markets, but NFT has changed the rules of the game. 

NFT in P2E games are cryptographically unique tokens that allow users to become real owners of in-game items: plots, virtual clothes, heroes, etc. That is, the main difference is in ownership. With regular games, in-game items are stored in isolated data networks and belong to the companies that created the game, whether you bought the items or not. 

Aside from that, with regular games, you play purely for fun. You pay for the game, then you buy in-game items but this does not bring you revenue unless you are a professional cyber game player or a popular streamer. In blockchain games, you combine business with pleasure by playing and earning real money while you do. 

Why is Play-to-Earn popular?

Source: NewsBTC

Now let's take a closer look at the reasons behind the popularity of this genre. It is believed that the blockchain games industry itself experienced a boom back in 2021 and since then, there has been a steady increase in the popularity of GameFi services and the entire industry. What could this be related to? Let me provide you with a quick example of a popular P2E game. 

Axie Infinity is the most successful and fundamental example of Play-to-Earn games. Axie Infinity was released back in 2018 and has since become one of the dominant P2E games in countries such as the Philippines and Indonesia. Thanks to the in-game economy, the game has become a real source of income for Filipinos affected by the pandemic, thereby building up a significant user base. 

I am convinced that the real game-changing feature of successful Play-to-Earn projects is the low cost of attracting consumers because the more the game generates income, the faster knowledge about the project spreads. For example, almost every second Filipino knows about the Axie Infinity game, but the developers' marketing costs have been minimal.

However, such projects require at least one in-game NFT to start playing the game and earning money. The cost of these tokens varies significantly and can be quite decent, which generally impacts the size of the consumer audience. 

But a solution for this too has been found. P2E has begun to offer scholarship programs that allow NFT owners to lend out their tokens to new players. The owner of an NFT receives rental payments and part of the income generated, so players have the chance to start playing and earning without making major investments. 

What is the future of Play-to-Earn?

Source: BeInCrypto

Even though 2021 is considered the year of the blockchain game boom, I believe that the P2E industry is still gaining momentum, with more and more games of this genre entering the market. What are the prospects for the industry and how long-term is it?

First of all, Play-to-Earn games attract significant attention to the crypto industry. They are a kind of advertisement for NFT and cryptocurrencies. People who have never used cryptocurrencies before, never owned tokens or wallets, are suddenly interested in these projects and are delving into the industry. As for me, I believe the crypto industry is only going to expand in the next few years, which means that the developers behind such games are likely to have the same expectations for the future. 

In addition, the Play-to-Earn industry has started resonating with the main gaming industry, namely major giants such as Ubisoft, who have announced their plans to create a platform that allows players to earn and buy NFTs based on the Tezos blockchain. This is not surprising because well-known game developers simply can’t ignore the stunning success of P2E projects. 

Alongside the Play-to-Earn industry, metaverses are also developing and certainly, blockchain, cryptocurrency, and NFT all play a significant role in this type of project as well. There are many projects aiming to create metaverses in which all users can interact with each other and in-game assets can be moved between platforms, which can also serve as a powerful catalyst for the development of Play-to-Earn games. 

However, like everything in this world, Play-to-Earn has some drawbacks. The main one is the monotony of the gameplay. In general, many projects operate similarly to each other — you own in-game NFTs, pump them up and compete with other users. The main and only goal is to improve NFTs in order to win and earn. Plus, to the above list, we can also add poor graphics, especially when compared to modern games. 

For these reasons, blockchain games are mostly played by makers whose main goal, unlike traditional gamers, is to earn tokens and not to play the game for its own sake. In general, having high-level game mechanics is a must for a project's long-term sustainability and new audience engagement. 

Another issue with the Play-to-Earn industry is that it can cause a volatile economy. The economics of many P2E games is simple — the more NFTs it can sell, the greater its subsequent earnings will be. Projects have a strong dependence on player growth. As soon as players’ growth stops, the economy collapses.

In my opinion, to make the economy of P2E projects more stable, several principles should be implemented. The first is to stick to the balance of supply and demand. If supply outstrips demand, the price of a token will inevitably decrease. The second is to increase demand by adding new purchase incentives, not just enticing new users but appealing to existing ones too. 

Summing everything up, I would say that given the rapid growth of the P2E industry and despite its shortcomings and the unstable economy, one cannot deny the power and importance of Play-to-Earn games. 

Demand for the P2E industry will inevitably grow in parallel with the development of the DeFi industry and metaverse projects. In addition, ironing out its weaknesses and providing a real chance to earn through access to the internet will keep on attracting new users from all over the world, so GameFi is hands down sustainable and will remain so for a long time to come.