Over the last couple of years, the Play to Earn gaming (P2E) grew exponentially in terms of popularity and obviously in terms of money involved.
The growth of crypto gaming
NFTs growing popularity was boosted by crypto gaming, as its technology was soon incorporated into most, if not all the games, being a perfect fit, to tokenize in-game assets (items, characters, collectible cards, etc) and register everything on the blockchain.
More recently, the rise of the metaverse brought a lot of attention to the space with the rise of projects like SandBox or Decentraland or even the rebranding of Facebook to Meta (verse) with the aim of taking the crypto gaming to the next level, where players can create, build and develop within a the metaverse, bringing unlimited potential.
All this factors created the perfect conditions for the growth of P2E gaming, making it move several hundreds of millions of dollars in value per year.
The industry leader is definitely Axie Infinity, which according to Wikipedia, it “is a NFT based online (…) game developed by Vietnamese studio Sky Mavis” which is “a competitive game with an “idle battle” system (…). The game’s setting is filled with creatures called Axies that players can collect as pets. Players aim to battle, breed, collect, raise, and build kingdoms for their Axies”
Is it sustainable?
The success of P2E gaming was also due to one human characteristic as old as the times: greed.
Many P2E games’ rise were fuelled by greed, and great monetary rewards were the number one luring factor to bring new players to the space instead of the fun one would have playing the game. This factor created two problems in my view: wrong incentives to players (greed over fun) and wrong incentives to developers (focus more on making the game profitable for players instead of making the game fun to play). Many games’ success made people quit their day jobs and play games to pay their bills with rewards many times larger than their regular jobs, and again Axie Infinity were the number one game, again leading the industry, but also followed by others like Crypto Mines or Crypto Godz. At a certain point, the hype was so big that game projects (without even any graphics, video, or playable version) were valued millions and millions of dollars.
The greed of humans turned the “to earn” expression into a buzzword with many followers to the P2E models, with special highlight to the M2E – Move to Earn success of StepN.
P2E gaming was a victim of its own success due to the factors pointed above, as the alluring rewards to its players turned out to be unsustainable and when players and investors realized that as soon as new players stop joining the game, old player’s rewards will soon be worthless. This is no less than a Ponzi Scheme. As more and more people started to realize this, the space started to stall its boom, especially when compared with the broad crypto market. Many millions were lost by players and investors in the fall of P2E games.
Eventually, the bear market came and alongside the broader market, crypto gaming suffered massive losses. Many claimed that P2E gaming was dead.
P2E might be dead the way we knew it, but it’s well alive, maybe in another form. A more sustainable form. Again, the industry leader Axie Infinity seems to be leading the march towards a more sustainable economic model with recurrent reward reduction, specially on the PvE (player versus environment) part, where just for playing, anyone at a certain point could make over 20 dollars a day, which might not sound much, but imagine millions of players doing it on a daily basis! Which bears the question: “Where is this money coming from?”. The answer was already given above: new players. Meaning: Ponzi.
As a crypto enthusiast and gamer, I’m very happy to see steps towards a better and more sustainable crypto gaming scene, where successes of regular games should be followed with two major focus: fun and competitive play. Ideally allying both.
Everyone enjoys playing a game, either something as old as a card game or chess, or the latest version of successes like GTA, FIFA, Call of Duty or League of Legends. If the game is fun, there will always be players willing to play and pay to play the game.
On the other hand, there’s competitive play, which always had a great following ranging from the multi-billion dollar sport industry like Football (Soccer) or NBA to the rising success of E-Sports (Electronic Sports) which huge rise in demand, making the giant Amazon buying Twitch, a streaming platform, for almost one billion dollars. The ESports space is currently valued at over one billion dollars, and it’s expected to be worth over 5 billions by 2025.
P2E might be a great buzzword and marketing tool, but its sustainability is in check. Maybe it would make more sense to be C2E: Compete to Earn.
Either way, all of this comes to my point, that blockchain and NFT technology is a perfect fit for gaming, and I believe that there is a great growth and bright future ahead of the space as soon as the incentives are right for players with clear focus on fun and pleasing gaming experience allied with a strong competitive play scene.
If you missed our previous articles about NFTs, you can find them here.