What Is Play2Earn (Play to Earn)?
A play-to-earn game is one that allows players to earn any form of in-game asset that can be transferred to the real world as a valuable resource.
Since technology has become more accessible to the general public, video game business models have developed to a whole new level. In the past, games could only be played on arcade machines in specific gaming arenas. Quarters would be thrown into the sack and players would compete for the highest score. After the revolution in technology brought games to smartphones, home computers, and gaming consoles such as PS5 and Xbox, things changed drastically.
We are now seeing a new gaming model called play2earn, specifically in the blockchain world. It allows players to earn revenue by participating in games. Engaging in the in-game ecosystem allows gamers and developers to earn assets for their contributions. These digital assets could be anything from coins to accessories that have been tokenized on the blockchain. Therefore, play-to-earn business models complement blockchain games well.
Axie Infinity is a great example of a play2earn game. Animals called Axies are acquired, bred, and fought to earn rewards in this game. The Axie token is a non-fungible token (NFT), meaning it is a one-of-a-kind digital collectible. In the game, there is a whole economy (a world called Lunacia).
With Axie Infinity Shards (AXS) and Smooth Love Potion (SLP), users can buy land and breed Axies in Lunacia. The tokens have real-life applications as well.
Various play-to-earn games, like Axie Infinity (AXS), are already helping people around the world (especially in countries hit hard by the current pandemic) earn a handsome sum of money. People in the Philippines earn an estimated $1,500-$2,000 a month just by playing Axie Infinity as a hobby. In Vietnam, many people have also given up their full-time jobs because they are earning a handsome amount of money from these games.
What’s the Play-to-Earn Business Model?
Play-to-Earn business models are the latest development in the games industry. It’s a business model that promotes an open economy and provides financial benefits to all players who contribute value to the game’s world. The game is likely to introduce new game concepts and retention models not found in modern gaming.
As technology became more accessible to the audience, video game business models have evolved. In the late 1970s and early 1980s, we played games on arcade machines at local arcades. Gamers would compete to get the highest score with a pocket full of quarters.
When we’re in public transit or taking a break, we play games on our smartphones. We play games on our computers or home consoles when we are looking for a deeper experience. Regardless of the platform, there are business models for everyone.
The free-to-play model is the foundation
The right to play a premium game must be purchased by the consumer. The license is bought from a digital store, or a physical copy is purchased from an online or local retailer. There’s a steep financial commitment here, as it’s not uncommon to pay 60 dollars for a newly released game. Although this is still a large industry, the free-to-play business model has seen the most growth in recent years.
A free-to-play business model allows gamers to access a game for free without any financial obligation. Free-to-play or freemium games are always downloadable, but they provide consumers with a limited / constrained experience. If players want to speed up their progress or obtain special items, they’ll have to pay. Users may have to pay for in-game currencies, extra content or cosmetics for their characters.
Many of the biggest games on the market are actually free. Last year Fortnite alone was responsible for 1.8 billion dollars in revenue, even though the battle royale game is completely free. Offering cosmetic items allows players to further customize their appearance. Games like League of Legends and Hearthstone are among the most popular games available for free. Each developer has their own method of charging for additional content or cosmetics.
Free games have made billions of dollars in revenue, and there’s no stopping them. It just goes to show that the free-to-play business model has matured and that developers have learned how to monetize free-to-play games.
There are many similarities between the play-to-earn and free-to-play business models. Play-to-earn games often use mechanics that are also found in free-to-play games. Play-to-earn games, however, also allow gamers to earn money or valuable digital assets.
Play-to-earn business models give players ownership over in-game assets and allow them to increase their value by actively playing the game. By participating in the in-game economy, players create value for themselves and the developers. In exchange, players receive in-game assets. Tokenized digital assets can be anything from cryptocurrencies to in-game resources. Therefore, the play-to-earn business model goes very well with blockchain games.
The play-to-earn business model rewards players for putting time and effort into the game. Small Love Potions (SLP) are earned in Axie Infinity. The players can sell these tokens on the open market in order to breed new Axies. Other examples are the resources in League of Kingdoms, or the prizes players can earn in Sorare, a fantasy football game.
Acquire value to participate
Free-to-play games should also be play-to-earn games. Unfortunately, this isn’t always the case. Currently, gamers must first buy three Axies before they can enter Lunacia, the world of Axie Infinity. Moreover, players must invest money into player cards before they can earn cards in the weekly competitions. Despite free-to-play games like Chainz Arena and League of Kingdoms, idle gameplay mechanics and limitations actually compel players to invest some money into these games. Even though players earn something, they also have to pay for it.
The play-to-earn system changes this. All obtained items have a certain value. Thus, gamers will always be able to earn some money the moment they step away from a game.