P2E or P&E?!
The global gaming industry consists of 3 billion people worldwide with a market size of over $200 billion. And many people believe that games will act as a bridge for connecting the public to Web3 and the blockchain industry.
However, if you look at the P2E games currently out on the market, you may notice that most of them focus on profits rather than gaming. Making money is more important than enjoying the game, and there are many cases where both developers and players abandon the project after earning that money. The current P2E market is suffering from many problems, and let’s talk about the ways game companies can solve this problem in the long run.
What are P2E games?
P2E (Play-to-Earn) games are, simply put, games that you can make money with. It is a term that refers to games in which individuals can acquire tokens or NFTs while playing the game. Also, it is a system that can have a so-called Win-Win structure, where players earn profit just by playing the game and game companies take fees from token or NFT transactions.
So, the biggest difference between P2E games and traditional games depends on who owns the goods in the game. In traditional games, the game company directly manages the ownership of the goods in the game, whereas in P2E games, individuals can own the goods and items in their wallets by using the blockchain technology. Furthermore, players can freely trade and cash out goods (tokens) or items (NFTs) in their wallets with other users.
So what’s the problem?
The ease of cashing out, however, leads to a high chance of depreciation of the tokens and the departure of the users. This is because the value of the tokens will inevitably fall when there is no demand source in line with the continuous supply, and if there is no way to retain the users who have achieved their target profit, the possibility of churn increases.
In fact, most of the current P2E games are focused on “Earn” rather than “Play”, and there are many games where early entrants gain profits in a short period of time and later entrants suffer loss from the depreciation of the tokens or NFTs. If there are no new users to use the tokens, the value of the tokens will fall and users will leave, thus falling into a vicious circle. This is a major problem that has been going on since last year, creating distrust and antipathy towards the current P2E market.
A possible solution
Until now, the P2E market was Play to “EARN”. However, we should be focusing more on “Play” rather than “Earn” so that “PLAY” & Earn is possible in the future. In other words, the essence of a gaming is basically playing the game, so earning should be a feature that just follows along. If the game quality is good, users will continue to play the game, and the depreciation of the token due to user departure can be prevented.
To make P&E possible in the current P2E market, traditional game companies will need to participate more actively in this market. They could use existing IPs or create a whole new P&E game from scratch bottom. If decentralized elements such as governance tokens and NFTs are implemented into games produced by centralized game companies to ensure player ownership, building a sustainable P&E game that can attract the 3 billion gamers in the world would be possible in the near future.
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