When asked about play-to-earn and blockchain gaming, you probably think of a source of extra income and entertainment – that’s how P2E games are advertised and promoted to the world. What if I told you the reality isn't as sweet as they say?
We’re in the early days of play-to-earn, and just like other new concepts, it needs to maturate. Play-to-earn creators are still learning, making this model better and better each day. What we’re observing now is definitely not the final stage, but it's going to be evolution rather than revolution.
Surely, learning goes with beginner mistakes. What are the most common ones in the play-to-earn projects sphere? What can we do to prevent them? Let’s dive deep!
Play-to-earn: players vs. investors
Since the beginning of home video gaming, games have been a cut-off from hard days’ labor. Nothing has changed through all these years except the titles gamers have played. In the very beginning, people enjoyed Tetris and Mario Bros., then they switched from 2D to 3D games and high-tech games. We’ve witnessed the development of the gaming industry over the years that eventually brought us all the way to the newest, intriguing way of gaming: play-to-earn (or, as I prefer to call it, play-and-earn).
Play-to-earn is a new concept in the gaming world that has been the hottest trend throughout 2021, and it could be like that until the end of 2022, or even further as the world is still recognizing digital gaming and payments.
Why is P2E so exciting? Let me explain it with an example. Imagine you have a pet, and you’re getting paid whenever you feed it, go for a walk, or play with it. It works precisely the same with games: you do quests, simple daily tasks, or just play and, at the same time, earn money. Your income consists of cryptocurrencies and NFTs, but you can swap them for fiat currency later.
We can distinguish two kinds of players that love P2E:
- one that enjoys gameplay and generates revenue as a bonus,
- another one that has turned gaming into their main source of income; often includes people from countries with a difficult economic situation such as the Philippines or Venezuela.
While some P2E games are entirely free to play, others require an initial investment. However, the main concept is the same: you earn cryptocurrencies while being entertained in the metaverses and various blockchain-based worlds. Games’ earning potential depends mainly on the amount of time players spend on the game. The more you play and the better you get, the more rewarded you are as you develop the necessary skills.
Early mistakes of play-to-earn
Although most P2E projects offer the opportunity to both earn money and have fun, there are several problems with their economics and long-term sustainability.
Let’s focus on the three main issues: insufficient token use cases, unstable user base growth, and lack of fun.
- Not enough use cases for the generated tokens
At the beginning, back in 2021, gaming projects would utilize only one kind of token that served two purposes, i.e. governance and rewards. Nowadays, most blockchain games have a dual-token system with distinct governance and rewarding tokens.
However, it doesn’t really matter if the project has one or two tokens if these tokens don’t have enough use cases. The more purposes they serve, the more supply coverage they get. Unfortunately, most projects focus on the rewarding system instead of studying tokenomics. The gaps in a project's economy may lead to severe problems in its ecosystem, e.g. sudden price pumps and dumps when players decide to sell their tokens in the game.
- Unstable user base growth
Have you ever seen a huge red candle on a trading chart even though the game was doing great? That kind of selling pressure was probably caused by investors who decided to make profit from the earned tokens. It seems unfair, especially for new players who invest in the game and instantly lose their funds. Why does this happen?
The answer is simple: the project can’t handle growth in its user base. Of course, the token price could tank in a few days, weeks or months, but it eventually drops drastically. The best example is Axie Infinity, in which the user base suddenly surged, and the company recorded huge increases in its tokens’ prices. However, months passed, and the price of AXS and SLP started to shrink because players started selling the earned tokens. The project could become a lost cause if nothing changes.
- Lack of fun
Finally, we’ve reached the most important problem in P2E gaming: lack of entertainment. Why is it so important? Because games are meant to amuse and bring joy.
Although most play-to-earn titles are simple clickers or 2D adventure games, their gameplay might be insanely addictive. Unfortunately, many games are made by tokenomy experts, not game developers who can create a captivating game without advanced graphics or epic music. The result? Games produced by inexperienced creators are rather unsatisfactory and boring.
Do we play P2E because we love it, or do we just treat it as a source of income? As I already mentioned, there are two groups of players: one that loves P2E for gameplay, and another one that simply wants to earn money. However, the first one is not that big yet because many games are simply not fun.
The future of P2E
Despite many problems faced by current P2E titles, it is certainly an innovative solution that has the potential to attract more and more players. After all, who wouldn't want to get paid for doing what they love?
We can rest assured that the play-to-earn concept is going to improve over time, but we’ll have to wait patiently for it to evolve into Play-AND-Earn where entertainment and gameplay are as important as earning.
The future of P2E games looks promising, but the problems encountered so far must be resolved as soon as possible, so that blockchain gaming can move to another level. First, developers must take care of sustainability. It’s necessary to focus on tokenomics, find more use cases for the tokens and produce advanced games with addictive gameplay. Play-to-earn should be mainly entertaining, and the opportunity to get revenue should be a bonus. Most importantly, P2E games developers should follow one simple rule: gameplay first!