Video games have traditionally been seen as just a hobby to pass time. They have had little connection with real life. As a gamer, all your achievements in a particular game stayed in the game, known only to you or your co-players. But whatever items you earned/collected like weapons or skins within a particular game eventually belonged to the game’s developers. There was little you could do with them outside the game.
So, if the developers chose to shut down the game or strip certain features that affect these in-game items you own, there would be no scope for recourse. You would simply lose access to all the items that you may have collected over a long period of time. That is precisely what the play-to-earn model (P2E) gaming model could change forever.
In the past year or so, cryptocurrencies, non-fungible tokens (NFTs) and their underlying technology blockchain has gained immense popularity. And being at the forefront of technological innovation, the gaming industry also incorporated some new technologies. The result was the birth of the P2E model.
In the play-to-earn model, all the digital assets you own within the game are empirically yours, and you can do whatever you want with them. The more time you spend playing a P2E game, the more items you can earn. You can then sell these in-game items for real currency in various marketplaces.
But this technology is in a nascent stage. There haven’t been any studies detailing the impact this gaming model could have on people, especially children. Let’s do a deep dive and weigh the potential pros and cons of the P2E model.
Opportunity to earn real money
The P2E model has the potential to revolutionize the gaming industry, according to industry experts. As stated above, in the early days of gaming, people would play games to relax or experience interactive storytelling. Gradually, social elements like multiplayer games came about, where players could play against each other or together with a shared goal. These multiplayer games also introduced in-game economies where players could buy and sell items. However, these in-game items were still not connected to real-world money or finance and continued to benefit the developers of the game.
The play-to-earn models now aim to provide an added incentive for players who want to spend more time in a virtual environment without worrying about losing what they earn in the game. The more they play, the more in-game items they can collect. These in-game items can then be traded for crypto or real currency. P2E gamers can earn money for doing what they love – playing video games.
Helps develop the gaming community
The latest P2E games have some of the most robust and active communities in the gaming landscape. According to DappRadar, a global app store for decentralized applications, Axie Infinity has a community of 106,000 daily active users and 302,000 weekly active users.
This is because, in P2E games, players can work together to tackle quests and missions and split the rewards between them. This helps foster a community of players willing to work together towards a common goal. The reward aspect of the P2E model will give existing gaming communities the extra boost to build and promote a social and inclusive environment.
May help greater adoption of blockchain technology
According to a Mordor Intelligence report, the gaming industry was valued at $173.70 billion in 2021, and experts predict it will reach $314.40 billion by 2027. Gaming is the most prominent form of entertainment right now. In contrast, blockchain technology is in its nascent stage. The gaming industry’s adoption of blockchain could trigger a chain reaction, getting other industries to dip their toes in the blockchain waters as well. In doing so, it would introduce millions of people to the power and innovation of blockchain and other related technologies.
May prove beneficial to both gamers and developers
P2E games help players earn real money through in-game assets and developers who create and maintain these games improve their income as the play-to-earn ecosystem grows slowly over time. While it is still too early today, the P2E model could attract several first-time gamers, expanding the customer base and improving sales, which may prove to be a win-win-win for game developers.
As with every technology, the good comes with the bad. Here are some cons that can present themselves in this gaming model.
Gaming mechanics built around earning, not fun
Critics have often cited this issue when talking about the problems of the P2E model. There is a belief that developers might concentrate more on the game's economic model than the aspects that make it fun. They could make it much harder to unlock an item in the game, making it an exhausting experience for a player and taking the fun out of earning that item. This would defeat the entire purpose of playing a game, having fun!
The high price of entry
In games like Axie Infinity, you have to shell out large sums of money to purchase the monsters required to complete quests and missions. Without these monsters, you cannot play the game. Several other P2E games require similar entry purchases, some of which can run into thousands of dollars. This high price of entry can be a deterrent to those looking to explore P2E games.
Potential for loss of money
Many P2E games require you to play for hours before you see any significant monetary returns. Sometimes, gamers spend weeks and months just trying to recover the initial investment to access the game. Further, while these games have decentralized items and marketplaces, at the end of the day, they are still controlled by a developer or publisher who can set limits on how much a player can earn in a certain period. So while they do offer the opportunity to earn, very few people actually understand the potential losses that they could incur. It’s therefore important to understand the rules of the game well before starting.
Lack of defined structure
Blockchain technology is still in its infancy. As such, there are still several niggles that need to be ironed out, including scalability, upfront costs, network infrastructure, and mainstream accessibility. Not to mention the volatility of crypto tokens and NFTs, whose prices seem to move up and down in mere hours, making them a risky asset to own.