Play-to-earn crypto games are one of the hottest trends in gaming right now. Gaming companies are seeing huge success as their games empower a few to earn significant amounts of money in the crypto economy.
In this blog, we are going to look at where the play-to-earn model started, how it rose to success and some examples of games that are executing it well.
Making money from video games has been around for a long time. But way back when, it was not eSports that dominated the culture.
eSports player is now recognised as a profession. However, before this was a legitimate way to make money from video games, game designers and players of popular PC games like ‘Diablo II’ or ‘Runescape’ used a play-to-earn model to create entire digital economies. These were virtual economies in which top players could make a living from playing the game.
This was all happening around 20 years ago. The play-to-earn model has come a long way since then, and so have video games.
Estimates show that by 2024 there will be 3 billion video game players worldwide. This huge boost in the popularity of video games has led to an entire infrastructure being built, that supports professional gaming.
Today, there are numerous opportunities for top players to make a living playing their favourite games, with the very best earning large sums of money.
The best of the best are considered athletes in the realm of eSports. They then become members of eSports teams and earn a salary like they would in any other job. On top of this, they will also share in prize money from tournaments and can build partnerships with sponsors.
Many top players also monetise their gaming by streaming on platforms such as Twitch and YouTube and making money from ad revenue.
Video games have now become a $336 billion industry. This calculation includes revenue from a wide range of sources such as software, hardware, and intellectual property.
However, there are some issues with the monetisation methods available in the gaming industry. Almost all game based economic activity is centralised. This means that developers and publishers have the rights to everything that happens in the games.
For game developers, the goal of this is to capture the money that is generated from their games. This then includes game content, digital items, and subscriptions. However, it also means that players of their games are limited in the ways they can share in the value of the game without becoming professional eSports athletes.
The model of ownership has persisted but the gaming industry is in a time of transformation. Play-to-earn games are becoming more and more popular and changing the way game developers operate.
A play-to-earn game allows the users to earn and own digital assets from the game, that they can then sell in the ‘real world’.
For players to put a lot of time, attention, and personal investments into a company's game they have to have trust in the durability of their digital goods. They must feel secure that they won't suddenly become worthless or disappear.
This trust is achievable through the blockchain. Using cryptocurrency, game developers can ensure digital trust and decentralised storage of value.
Play-to-earn games are built on blockchain technology. They often include rewards in the form of NFTs or crypto. Players earn or win the most valuable items in the game or crypto such as Ethereum, and are then able to exchange items or crypto for real-world money on their own terms.
Axie Infinity is a Pokémon-like mobile game. It is an exemplary example of how well the play-to-earn model can work. This popular gaming environment went from 4,000 to 2 million daily active users within a few months.
It is now one of the most popular mobile games around and its play-to-earn model keeps users coming back for more.
Players collect and raise numerous chibi animals that are linked to the blockchain and can be resold. It has become hugely popular in countries such as Venezuela and the Philippines because the cryptocurrency that players can earn eclipses the value of wages in their countries.
The transition to the play-to-earn model is just beginning. Games like Axie Infinity show how successful this model can be and we are likely to see more of it in future. It is a great way to incentivise users to come back and continue playing your game. It is a trend that every game developer should be keeping an eye on.
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