New games are experiencing a major boom in recent years, Play-to-Earn (P2E). These games that allow you to earn money according to your performance in the game could be a revolution in the gaming world. Let’s take a closer look at these new games and what they could change.
What is a Play-to-Earn (P2E)?
Became very popular during the 2021-2022 period, Play-to-Earn are games that use cryptocurrencies and more broadly blockchain technologies.
If we have to give a simple definition of a Play-to-Earn:
Players earn rewards in cryptos based on their participation, actions, and of course their results in a game.
Translated as ” Play to Win ” in French, a Play-to-Earn can win several things :
- cryptocurrencies, which can be traded, sold or used in a game;
- NFT (non-fungible token), which can be used in-game (equipment, characters, virtual terrain, etc.) or traded on specialized marketplaces.
Play to Earn is a way to democratize the use of cryptocurrencies and the Web3 Earn money while playing and having fun!
Not much chance of becoming a millionaire, but by testing some P2E early enough and getting heavily involved, it is possible to win a lot of cryptocurrencies and NFTs that could be worth a substantial amount in Ethers (ETH) or fiat currencies (€, $).
If we take Axie Infinity as an example, the two cryptocurrencies related to this game are SLP and AXS. The price of SLP went from $0.015 to $0.36 in a few months (from January to April 2021) and the price of AXS from $0.5 to more than $8 in the same period.
It’s not just the crypto-currencies related to this game that have seen their prices explode, the NFTs related to the game have also seen their prices jump from a few dollars to several thousand for the rarest ones.
👉 Track the price of the largest NFT collections.
How does a Play-to-Earn work?
- Register for the game via the website or by downloading a mobile app;
- Play the game (you may need to purchase one or more NFTs beforehand);
- Earn crypto or NFT rewards;
- Sell your rewards to get money like euros or reinvest your earnings to increase your chances of winning better rewards
P2E works much like a regular game. However, the rewards and items you earn while playing have real value and really belong to you. These rewards can be freely resold to other players outside the game, which is impossible for Web2 video games that operate in a closed ecosystem.
How to identify a promising Play-to-Earn?
For developers, it is complicated to make a Play-to-Earn that holds up on the long run because you have to anticipate many factors.
- A rapid increase in the number of players and thus demand for NFTs and the cryptocurrencies associated with the game. The more the game is played and used, the more the number of NFTs and tokens in circulation tends to increase;
- A drop in interest can occur very quickly as we have seen with STEPN. The immediate effect is a drop in the price of the tokens and NFTs associated with the game, as demand is no longer sufficient to support the price of these assets.
It is therefore necessary to find a balance to satisfy the largest number of players while avoiding making the game a “ponzi”.
Decentralization
The creators of a P2E game must not be able to unilaterally change the rules of the game. Let’s recall that it is following a modification of the characteristics of his character (taken without consultation with the players by Blizzard) on World of Warcraft that Vitalik Buterin launched Ethereum.
Players should have a say and be able to suggest improvements and changes via a governance forum. These proposals should then be discussed and voted on by the community (token and/or NFT holders).
Transferability
Objects in the game must be transferable and not “locked”.. Players must be able to trade them, sell them live, peer-to-peer (P2P) or via marketplaces, or use them in other games.
Relevant tokenomics
The creation, destruction and use of cryptocurrencies and NFTs must be relevant to the game. Developers should find real use cases and not just ride the NFT wave with their game. This is to avoid seeing the value of the cryptocurrency (tokens) and the NFTs used in the game collapse.
Using a certain amount of cryptocurrency (tokens) to upgrade equipment in the form of NFT or to open a lootbox to try to win rare equipment (again in the form of NFT) helps to make the supply in circulation scarce.
Tokenomics are certainly the most complex element that developers need to work on to make their P2E last over time.
Some accessibility
Ideally, the greatest number of people should be able to play it. So, to get characters, equipment and play the game it is better to be able to play it for free.
It is possible to offer options, quests, equipment, paid characters for example (buy an NFT to be able to play or own cryptocurrencies) to further gamify the game.
Have the possibility to play a free Play-to-Earn and earn rewards with no initial investment allows you to reach as many players as possible.
So we won’t talk about Free-to-Play or Pay-to-Win but a clever mix between the two. To take the example of Axie Infinity, we can consider the game as a Play-to-Earn because you have to invest money to play it.
The game must also be easily accessible via mobile so that as many people as possible can play it.
A gaming revolution?
While until now the revenues generated by amateur video game players have been monopolized by game publishers, this could change.
Thanks to Play-to-Earn, gamers benefit directly from the revenues they generate when they earn rewards, upgrade their equipment or characters which can then be resold.
In play-to-earn games players and game developers are partners. Each party has an interest in the proper development of the game.Each party has an interest in the game developing correctly so that the various assets in the game increase in value.
Play-to-Earn has become very popular, especially in poor and developing countries, because it allows people to earn money. Again using the example of the Axie Infinity game in the Philippines, people earned more than their monthly salary in one day playing. The average salary in the Philippines is around $300, so it was possible to play Axie Infinity for a period of time and earn more than that amount in a few days of play. Since then, due to the fall of the crypto and NFT market this has changed and the winnings have become much lower.
Platforms like Steam or Epic Games do not allow selling skins or other items between players without going through their own marketplaces. These marketplaces take commissions and decide what can and cannot be sold.
This does not mean that NFT marketplaces (based on blockchain technology) do not take commissions, but that players can switch from one marketplace to another if they are no longer satisfied with the terms of use. This is the case for Sorare, where you can trade and sell your soccer player cards on the official marketplace, but also on other marketplaces like OpenSea or LooksRare. You can dispose of your NFTs as you wish.
Play and collect cards in NFT format
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Another advantage of blockchain for video games is transparency. It is thus possible to see how many copies of each equipment exist in the game and if the game editor allows himself to create new ones without asking the players.
New use cases are continually emerging, such as the ability to lend and rent NFTs. Also in the Axie Infinity game, some people or entities with the financial means buy Axie NFTs for several thousand dollars and lend them to users to play and earn money (NFTs, cryptos). These players redistribute a portion of the winnings to the owners of the NFTs. Thus, the players are not ” than “tenants. This is also the case in the game Cometh.
Another use case that will certainly develop in the next few years is the interoperability of NFTs. Imagine being able to use a weapon won in Call of Duty on Fortnite or Counter Strike?
Cross play already allows you to play with different devices Playstation, Xbox, computers, smartphones, etc.
How to create a P2E?
To make a Play-to-Earn you have to think about the type of game : RPG, FPS, card game, strategy… But also and especially how to include cryptos, NFT and others, in a relevant way?
Different options exist:
- create new cryptocurrencies, new NFTs…
- use already existing crypto-assets like Ether or NFTs.
In any case, the assets must be usable in an application, preferably decentralized (DApp). Indeed, in a decentralized application, the operation is based on smart contracts. These contracts will specify how tokens, NFTs and other assets are created, distributed and used in the game. Will they be exchangeable, to whom, for what, how?
Everything is automated and when it is fully decentralized, developers cannot undo certain actionsThey can’t undo actions, go back, change the rules unilaterally.
Developers can choose to take a commission when an NFT is traded, this is called royalties.
It is however quite possible to switch an existing classic game to Play-to-Earn. It is enough to include cryptocurrencies or NFTs in a basic and centralized way as in a classic mobile game.
If we take the example of Crazy Defense Heroes you earn points in the game based on your performance. The more points you have, the higher your reward in $TOWER, the game’s crypto. Your $TOWER allow you to open crates (not necessarily in the form of NFT) which give you bonuses in the game.
Conclusion on Play to Earn
Play-to-Earn games are still in their infancy. The Tokenomics of these projects are not yet fully optimized and the users quickly desert these virtual worlds.
Developers will have to redouble their efforts to produce video games that live up to the expectations of today’s gamers, while implementing smart systems with cryptocurrencies and NFTs to produce value in the long run.
Regardless, Play to Earn represents a promising type of video game that is expected to grow in popularity over the next few years, thanks to the increased understanding of Tokenomicsbut also the arrival of important players in the gaming industry.
It’s no coincidence that many video game studios are getting into Web3 and cryptocurrencies. They see the huge potential of crypto-currencies and blockchain in gaming. We have seen Epic Games raise 2 billion dollars to build a metaverse or Ubisoft join the metaverse of The Sandbox.
👉 Learn more about The Sandbox metaverse
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A play-to-earn crypto is a type of cryptocurrency that enables players to earn rewards for playing games or participating in various activities within a blockchain-based ecosystem. These rewards can be in the form of tokens, coins, or other assets that can be traded or exchanged for other cryptocurrencies or traditional fiat currencies.
The play-to-earn model is based on the concept of “gamification,” which involves integrating game-like elements and mechanics into non-game contexts to encourage engagement and participation. In the context of cryptocurrencies, this model is being used to incentivize users to contribute to the network by playing games, completing tasks, or performing other activities that benefit the blockchain ecosystem.
Play-to-earn cryptocurrencies are typically built on blockchain platforms that use smart contracts to execute and enforce rules and transactions. This allows for transparent and secure tracking of rewards and transactions, as well as the creation of decentralized marketplaces where players can buy and sell their rewards.
Examples of play-to-earn cryptocurrencies include Axie Infinity (AXS), My Neighbor Alice (ALICE), and Sandbox (SAND).
P2E cryptocurrency stands for “Play-to-Earn cryptocurrency.” It is a type of digital asset that is designed to enable players to earn rewards by playing games or participating in various activities within a blockchain-based ecosystem. P2E cryptocurrencies typically use a gamification model to incentivize users to contribute to the network by performing certain tasks, such as completing missions or participating in social interactions.
The rewards earned in P2E ecosystems can be in the form of tokens, coins, or other digital assets that can be used within the ecosystem or traded on cryptocurrency exchanges. P2E cryptocurrencies are typically built on blockchain platforms that use smart contracts to execute and enforce rules and transactions, which ensures transparency and security for all users.
One of the most popular P2E cryptocurrencies is Axie Infinity (AXS), a blockchain-based game where players can earn rewards by battling, breeding, and trading digital creatures called Axies. Other examples of P2E cryptocurrencies include My Neighbor Alice (ALICE), The Sandbox (SAND), and Decentraland (MANA).
A play-to-earn game is a video game that enables players to earn rewards in the form of digital assets, such as tokens or coins, for playing the game or performing other activities within the game’s ecosystem. The rewards earned by players can be used within the game itself, traded on cryptocurrency exchanges, or exchanged for other cryptocurrencies or traditional fiat currencies.
The play-to-earn model is based on the concept of “gamification,” which involves integrating game-like elements and mechanics into non-game contexts to encourage engagement and participation. In the context of video games, this model is being used to incentivize players to spend more time playing games and participating in the community.
Play-to-earn games are typically built on blockchain platforms that use smart contracts to execute and enforce rules and transactions. This allows for transparent and secure tracking of rewards and transactions, as well as the creation of decentralized marketplaces where players can buy and sell their rewards.
Examples of play-to-earn games include Axie Infinity, a blockchain-based game where players can earn rewards by battling, breeding, and trading digital creatures called Axies, as well as My Neighbor Alice, The Sandbox, and Decentraland.
To earn on a play-to-earn (P2E) platform, you generally need to perform certain activities within the game or ecosystem. Here are some common ways to earn on a P2E platform:
Playing games: Many P2E platforms are games themselves, and players can earn rewards by performing tasks, completing missions, or participating in battles.
Collecting assets: In some P2E platforms, players can earn rewards by collecting and holding certain digital assets, such as tokens, coins, or other digital items.
Staking: Some P2E platforms allow users to “stake” their assets in the platform to help secure the network and earn rewards in return.
Providing liquidity: Some P2E platforms are decentralized exchanges, and users can earn rewards by providing liquidity to the exchange by depositing assets.
Referring others: Some P2E platforms offer referral programs, where users can earn rewards for referring others to the platform.
It’s important to note that the specific ways to earn on a P2E platform will depend on the platform itself. Additionally, while P2E platforms can offer the potential for earning rewards, there is also a risk of losing value, and it’s important to thoroughly research any platform and its associated risks before investing time or money.
The profitability of play-to-earn (P2E) platforms depends on several factors, including the platform’s popularity, the demand for the digital assets it offers as rewards, and the effort and time investment required to earn those rewards.
Some players have been able to earn significant profits from P2E platforms, especially those that have gained significant popularity and adoption. For example, some players of the popular P2E game Axie Infinity have earned enough rewards to generate significant income, sometimes earning more than the minimum wage in their home countries.
However, it’s important to note that not all P2E platforms are profitable, and there is always a risk of losing value. P2E platforms can be subject to market fluctuations, hacking, and other risks that can result in the loss of assets. Additionally, earning rewards on P2E platforms can require a significant investment of time and effort, and the profitability of a platform may decrease if too many players are competing for the same rewards.
In summary, while some P2E platforms can be profitable for some players, it’s important to thoroughly research any platform and its associated risks before investing time or money. It’s also important to keep in mind that the profitability of a platform can be subject to change over time.
While it is possible to earn cryptocurrency by playing games for free, the amount of cryptocurrency you can earn may be limited or may require a significant investment of time and effort.
Some play-to-earn (P2E) platforms may offer a free-to-play option, where players can earn rewards by completing certain tasks or missions. For example, in the popular P2E game Axie Infinity, players can earn Small Love Potions (SLP), which can be traded for cryptocurrency, by completing daily quests and winning battles.
However, the amount of SLP or other cryptocurrency that can be earned in this way may be limited, and it may require a significant investment of time and effort to earn a meaningful amount. Additionally, some P2E platforms may require an initial investment to get started, such as purchasing digital assets like NFTs or staking cryptocurrency.
It’s also important to keep in mind that the value of cryptocurrency can be subject to significant fluctuations, and there is always a risk of losing value when investing in cryptocurrency. It’s important to thoroughly research any P2E platform and its associated risks before investing time or money.
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