11 Factors Every Sustainable P2E Gaming Project Needs for Success

What every Blockchain game needs for longevity

There’s no denying that it was a challenging year for crypto markets. In early May, the Luna coin collapsed, and its sister coin, the Terra stablecoin. This had a chain reaction, and crypto markets across the world plummeted. Some were talking of a 2008-like crisis as even Bitcoin fell dramatically. In May and June 2022, cryptocurrencies worldwide lost approximately 1 trillion dollars. With this in mind, it is essential for blockchain gaming studios to embrace financial stability at the heart of their projects for their future success and longevity.

In this light, let’s look at 11 factors that make a Play to Earn (P2E) blockchain gaming project sustainable. Note: even if we’re developing Play&Earn games, for the sake of readers’ comfort, we’ll use the “P2E” term in the article.

1. Long-term Economic Sustainability

In a well-balanced game economy, NFTs and specific game tokens will possibly increase in value as the number of people joining the game increases, not just relying on an influx of new players. However, some in-game tokens are designed to be stable in value, e.g., $BGEM on the BoomLand platform. However, NFTs and $BOOM tokens within BoomLand can grow in value, and $BOOM tokens give governance power to the holders.

A blockchain game economy also needs the right amount of built-in services that facilitate the assets’ fluidity (i.e., the marketplace, exchanges, etc.) while keeping the core gaming experience as the central focus — we define this genre as Play & Earn.

What is a Ponzi in Gaming Terms?
If a game does not reach an equilibrium between the token and NFT earnings of existing and new players and has too much reliance on new players, it is like a Ponzi scheme (also called a ‘pyramid scheme’). A Ponzi is a fraudulent scheme where ‘existing investors are paid with funds collected from new investors’.

A Ponzi-like crypto game applies these mechanics and hides behind a basic gamification facade designed to build the highest possible pyramid. Unfortunately, investors, particularly new ones, often end up losing their money in this type of scheme.

2. Retention and Resilience

Player retention is important for every video game; neglect your community of players for profit or corporate decisions, or if the game design is not fun, they will leave. If players exit in numbers and not enough new players join, this will eventually devalue the NFT & token economy.

3. Community and Culture

Games with strong, organically grown communities can sustain growth in the long term. Engagement on social media also helps build the community. Ultimately, the community helps to keep a gaming project together, not just the financial aspect of a successful project.

The main purpose of new games must not be revenue first. Truly, they must be centered around a deeper cause and unite players around that goal. In this way, gaming studios can build meaningful titles that generate a source of stories from the players themselves.

Bungie’s Destiny became a poster boy for community building. It united millions of players and built a caring community of friendships, helping people find best friends and partners. Such was the community’s love; players wore the merchandise, influenced the creation of new content, and there were balancing updates using the power of their voice on the internet.

The parallel in blockchain gaming is the existence of DAOs and governance tokens which give the community an authentic voice concerning a game’s evolution. Empowering the community and cultivating a community’s love for the game should be the ultimate goal of a Web 3.0 game.

4. Reducing the Barriers to Entry

The Cost of NFTS

One major bone of contention for many traditional gamers is the cost of NFTs and the necessity to buy them to join a game (sometimes even before the game is launched). Firstly, not all gamers have the funds to buy NFTs. However, free-to-play games and NFT lending are practical solutions to this issue.

NFT Gaming Costs Compared

Take the example of Axie Infinity. In September 2021, the average price of an Axie NFT was $355. Now the lowest investment for a starting team of NFTs is about $100. However, those are ‘floor Axies’, and experienced Axie players recommend buying more expensive NFTs if you are serious about your progression in the game.

Considerably cheaper is the starting cost for the game Splinterlands, which is a mere $10. Ten bucks buy you a summoner book which incidentally is not an NFT.

5. NFTs — Similar To The Property Ladder

The intrinsic value of NFTs comes from a combination of expanding utility and scarcity in a growing player community. Higher-cost NFTs in blockchain games are not a massive barrier to joining, as long as there are also options for gamers on lower budgets to enter and climb the ladder. This is similar to the real estate market, i.e., people at the bottom of the rung renting offices and others purchasing higher properties. Renting an office allows you to earn money as a business, and later on, you can buy your property. NFTs operate in a similar fashion to this. You can read more in the BoomLand whitepaper.

6. Educate About P2E

A sustainable P2E project must educate its audience to understand the benefits of a player-owned economy. Education should be oriented toward asset ownership rather than revenue generation. Otherwise, the game driver will be revenue generation, and the real key behind P2E is great games that people love, not just money-making ventures.

Asset ownership in blockchain gaming differs from Web 2.0 games, where purchases are locked into the game. Once you stop playing the game or the game closes, you lose all of your investment. In blockchain games, you can transfer your assets from game to game, platform to platform, and sell them in the in-game and external marketplaces and exchanges.

6. Team

It is essential to have a team with a proven track record and experience in both game design and blockchain architecture. Also, the team needs to be well balanced with professionals from different fields e.g., crypto and tokenomics experts, game developers, digital marketing, etc. Finally, the team needs to be in the public domain with transparency and accountability to build trust.

7. Financials and Roadmap

A sustainable P2E project needs a detailed financial roadmap that is supported by strong financial backing in terms of investors and/or community-funded. The P2E project needs to form partnerships with reputable companies e.g., Binance, Avalanche, Polygon, etc.

Also, the volume of funding raised and the financial stability are both essential. Equally, a P2E project needs to communicate regularly and give updates about the progress. Transparently sharing financial data builds trust and engagement.

Finally, it is also crucial to look at the use of funds in the tokenomics section and analyze it to see if it makes sense, e.g., what percentage is kept by the team or how much is dedicated to the ecosystem.

A sustainable P2E game project ensures there is liquidity in the token economy to keep it afloat, and the percentage of tokens for the team will reflect their long-term commitment to the game.

8. Token Economics — Sinks and Faucets

The supply of crypto tokens and NFTs are called the faucet, and sinks are where game tokens are ‘burned’ in transactions. A sustainable game needs to have enough in-game activities to burn tokens naturally by playing. Game developers naturally create fun games with various engaging activities, advanced game meta, updates, events, content, rebalance, new burning mechanisms.

Burning a token can curse a project in the long term and sinks should reinject the tokens. The Circularisation of tokens is important from a sustainability perspective.

The Supply and Demand of Tokenomics

Like any economy, supply and demand are the basis of the blockchain gaming token economy. Properly designed and implemented tokenomics are crucial to the game’s longevity.

Token inflation can cause the game crypto to decrease and the token economy to crash. This can sometimes be due to an oversupply of tokens or a lack of demand, causing players to cash out their tokens. Both situations may cause a rapid fall in the token value. This volatility is symptomatic of cryptocurrency.

Token tanking in price can also occur in a globally unfavorable bear market. A bear market is a term that refers to a situation when a market undergoes prolonged price declines. In a bear market, prices will fall 20% or more after recent highs, with a negative outlook from investors and pessimism prevalent across the market.

9. A Liquidity Pool

“A liquidity pool is a crowdsourced pool of cryptocurrencies or tokens locked in a smart contract that is used to facilitate trades between the assets on a decentralized exchange (DEX).”

A well-managed game economy keeps the liquidity pool liquid, i.e., either encouraging players to spend or holding onto their tokens. If tokens keep leaving the liquidity pool without replenishment, the token value drops. Spending mechanics should encourage players to buy items, level-ups, and other purchases. Players need incentives in both ways, i.e., getting the token from the liquidity pool and exchanging it with one another.

Most importantly, there shouldn’t be any ‘pay to win’ mechanics in a blockchain game because it reduces the fun factor and hits player retention hard as players cash out. Therefore, it has a detrimental effect on the liquidity pool. However, a ‘skin in the game element can be justified.

10. A Level Playing Field for All Gamers

The rules and system should be clear so that everyone has an equal chance to play and earn regardless of finance, technical knowledge, gender, age, etc. However, in terms of purchasing power for NFTs and tokens, there will be a wide range of budgets depending on the spending power of individual players.

11. Overcoming the Uncertainty of NFT & Token Value

Players may keep hold of their NFTs, believing that they will gain value over time. Some players may prefer to earn tokens in different game modes. Speculation and uncertainty around the value of tokens and NFTs may put some people off joining. The key is to show UTILITY and keep communicating to the community the future utility their tokens and NFTs will have.

Poorly Designed P2E Game VS a Sustainable P2E Game

Poorly Designed P2E Game

The clear indicators of an unsustainable P2E game are:

• If a game is not fun, some games give high rewards to keep gamers playing, which damages the sustainability of the game economy.
• The token economy aims at locking tokens in so the pyramid remains solid, but it will eventually fail for other reasons.
• A burn mechanism is not needed to reduce the token supply, but you do need efficient sinks, which are likely to be absent in a poorly designed game.
• A flawed distribution model of tokens prioritizes private investors more than players.
• An absence of or limited vesting periods for private investors indicates that a project may be a ‘pump and dump scheme’.
• The end of the game or getting to the highest level is too easy, which causes players to cash out and destabilize the token economy.

Sustainable P2E Game Design

The keys to sustainability for P2E game design are:

• Assets-utility and transferable between games and platforms.
• Professional management of the funds and token economy.
• Great games with having fun as the focus and overall lasting appeal.
• Having a reward balance at all levels.
• Community engagement.
• Content renewal with regular updates.
• Players and developers have a voice in the project’s governance for a properly decentralized economy.

Final Thoughts

More than anything, P2E games require time and dedication from the development team, especially with game token liquidity and sustainability. Indeed, the token economy needs to be closely monitored and action is taken when necessary.

If history is anything to go by with innovative changes, it is only a matter of time before the billion dollar brands become flagships for blockchain game sustainability and the fear of ponzis becomes a distant voice of the past.

Read more about the Sustainability of BoomLand!

Author: @Gold_Viking