Play-To-Earn
What Is Play-To-Earn And Is It The Next Gaming Trend?
What happens when the crypto and gaming worlds merge.
The Gaming Landscape
Is it an exaggeration to say that gone are the days when you pay $60 for a boxed video game and get 20 hours of fun?
Today, the financialization of the gaming industry has created many monetization models. Instead of getting paid once, game developers have found many ways to maximize profits while minimizing the production of their games.
Crypto + Gaming
Introducing, Play-To-Earn(P2E): blockchain-based games where you can earn cryptocurrency and cash out for real-world currency. In this article, I’ll try to give a broad overview of Play-To-Earn and what it seeks to offer.
The Marketing Of P2E
The term Play-To-Earn implies that you get to earn money by playing. Not only do you play games for fun, but you can also earn money from it — that’s a win-win right?
P2E is marketed as an advancement from the current systems in the gaming industry.
So what are the common types of business models used in the gaming industry?
Pay-To-Play
Buying a game used to be simple — pay once and get to play the game. A simple way to see it is a one-time payment, or ‘Pay-To-Play’. This model is the most traditional and the simplest to understand. You buy the product, and you don’t pay for any additional or hidden costs.
Free-To-Play
Many games are free to play(F2P) — there’s no upfront cost required. The problem is, game makers still need a way to make money for developing their games.
Common monetization strategies fall under ‘micro-transactions’. It is usually buying additional content in small amounts, allowing players to exchange real-world currency for in-game assets, or premiums.
Skins
‘Skins’ are cosmetic changes in games that usually do not affect gameplay. They are sometimes sold as a way for players to customize how they look. The lines are then blurred when game developers sell content that affects gameplay, such as boosters, exclusive weapons, or characters.
Enter Pay-To-Win.
Pay-To-Win
In Pay-To-Win(P2W), players are given the option to exchange real-world currency for an edge over non-paying players.
This can range from boosters that allow players to level up quicker, to in-game assets that give you more power.
This creates a gaming ecosystem where it is based less on a player’s skill but on the amount they are willing to spend.
Loot Boxes
Loot boxes and gacha games fall into a category of micro-transaction strategy that game companies use to earn more from players.
To put it simply, players pay for a random chance to get in-game items or rewards.
But its lack of transparency and similarities to gambling and lottery has made it a controversial game mechanic.
Loot Boxes and Gaming Addiction
The odds for certain items were often very low, and not disclosed, to entice players to keep paying for more.
Because these games are available to all ages including children, it has been heavily criticized as predatory and unethical.
These types of monetization strategies are slowly being regulated in parts of the world, with some countries banning such games and game developers removing or disclosing the rewards.
No Loot Box, Nevermind
Game developers continue to innovate with new ways of monetization that are transparent and don’t fall into the category of gambling.
One of such is the Battle Pass, where players can buy a premium tier for more rewards than a non-paying player.
Milking The Cash Game Cow
The unethical line is crossed when game developers create an extensive mechanic that requires players to pay fortunes just to reach a finished state. They may also create systems where players are on an unequal playing field but powered by the money they spend. Such ways of monetization games have been heavily criticized by players. P2E is then marketed as the hero — the solution to traditional models in the gaming industry.
The Sell Of Play-To-Earn
The sales pitch of P2E is ownership, decentralization, and earning potential. They are in line with the narratives common to the crypto space, as P2E games are blockchain-based and tied heavily to cryptocurrency.
Ownership
Instead of paying for in-game assets that you don’t own — you get true ownership of your items because they are non-fungible tokens (NFTs), and are on the blockchain.
NFTs are one-of-a-kind tokenized digital assets on the blockchain, and their potential is still being explored. These NFTs can be used to tokenize in-game assets such as your characters, clothing, and weapons.
Most games restrict trading your in-game assets for real-world currency. But in P2E, you can now trade them freely in a secondary market, getting some resale value especially when you choose to stop playing.
Decentralization
Instead of a closed system within the game where game developers extract so much value from players, a decentralized game gives some power back to the players. It can also allow players to create and maintain ownership of the content in the games. Game developers of a P2E game are not creating a cash cow that exploits players’ psychological vulnerabilities.
Earning Potential
Instead of spending hours playing for pure enjoyment, you get to earn cryptocurrency that can be cashed out for real-world currency. Games have long been criticized as a waste of time. Now you can justify your fun as productive because it is a potential source of income.
The Great Divide
The game industry could be split here — people who believe Play-To-Earn is the future, and those who believe it is evil.
Some traditional games that retrofit a Play-To-Earn model face backlash from gamers because it offers none of the real benefits of blockchain, and continues to be more of a way to monetize from players.
Blockchain-based games are mostly adopted by the crypto-savvy community and are mostly ‘not that fun’ as one of the many flaws.
Many are still in development or the early stages of launch while having pre-sold billions worth of virtual assets even before the game is released.
Still Early In Play-To-Earn
The idea behind Play-To-Earn seems attractive, but it is still in its infancy. Is it an emerging technology or just a fad? It seems to give solutions to many problems in the gaming space, but it also seems to have many flaws.
I am skeptical but hope to explore this topic, such as the pros and cons, and if it is a viable model. Please feel free to give your views, or suggest any topics I should look at.
