Due to the Covid-19 pandemic, an additional 33 million people were unemployed worldwide, and another 81 million people left the labor force. Household incomes and welfare were significantly affected, especially in developing economies.
These shrinking economies contributed to a situation where people explored other options to supplement lost incomes.
The stroke of the pandemic coincided with the release of Axie Infinity.
When players discovered they could earn $800 in income (in July 2021) by simply playing a game, word spread rapidly, and the Axie Infinity community exploded. Bloomberg reported 1 million daily active users in August 2021, up from just 30,000 two months prior. Axie Infinity represented a novel business model in the gaming industry where game developers could share their revenues with their players.
Whereas Play-to-Earn Gaming is surging in terms of adoption and popularity, the concept itself isn’t unique to blockchain. The concept is already present in traditional games; the only difference is that ownership isn’t feasible with conventional models.
Problems with Traditional Gaming
In traditional play-to-earn designs, earned rewards solely benefit the developer. In-app purchases so players can enhance their game experiences or advertisements placed during gameplay to improve monetization are examples of this authority.
Smash-hit Fortnite lets players purchase in-game, but the game creator makes it impossible for buyers to own, control, or even trade these assets with other players. World of Warcraft, a game by Activision Blizzard, imposes even stricter regulations on players.
In “Free to Play” games, players have several motivations for playing and contributing. Some prefer addictive gameplay, while the possibility of earning in-game currency and collecting limited digital assets motivates others.
Why Play-to-Earn is Becoming so Popular
Blockchain has made it so players on P2E games own all the assets they earn. Through an effort-incentivized income model, the more time gamers spend on a game, the more they earn.
Players can complete tasks, battle other players, or progress through different game levels to accumulate rewards, usually presented as native crypto tokens, cryptocurrencies, or NFTs.
Whichever asset you earn can be bartered on marketplaces or exchanged for real currency.
Governance tokens are at the core of the player-owned economy in play-to-earn games. The power to participate in game development and other important decisions, such as the allocation of funds, is delegated from governance tokens to owners.
The thrill of being in a community and the ability to own assets and earn real-world value while playing blockchain-based games is a big draw for people. And the numbers reflect this – fuelled by P2E, the NFT gaming industry made $2.3 billion in Q3 of 2021, with industry experts expecting this value to reach $36 billion by 2025.
NFTs are critical to the future of digital objects because they preserve individuality and real-world value. Because of their unique attributes, creators can capture the value of original designs, limited editions, and verified assets.
Blockchain technology has given us a unique vision of the future because it allows everyday gamers to play interactive games within the metaverse or earn a living through gameplay, community, or NFTs. With platforms providing players and creators with the opportunity to create and enjoy sustainable gaming economies powered by deep connectivity and excellent gaming titles, the future of play-to-earn gaming will only burn brighter.