What is Play-to-Earn (P2E)?

The article on Saakuru Academy about Play-to-Earn (P2E) gaming covers:

1. P2E games allowing players to earn real money through cryptocurrency tokens, NFTs, and other digital assets.
2. The rise of P2E games driven by blockchain and Web3 technologies.
3. How P2E games operate and are financed, highlighting community governance and external investments.
4. The growing popularity of P2E in emerging markets, offering income opportunities.
5. The connection between P2E games, NFTs, and the Metaverse.

The rise of cryptocurrencies, blockchain technology, and Web3 have enabled a whole new category of games that give players an opportunity to make real money while they play. A growing catalog of play-to-earn (P2E) titles reward users with cryptocurrency tokens, NFTs, and other digital assets that they can collect, trade, or exchange for traditional cash.

In this AAG Academy guide, we’ll explain what play-to-earn is, why it’s becoming so popular, and how P2E games are financed. We’ll also look at some of the biggest play-to-earn games on the market today, and cover how P2E titles are closely linked to NFTs and the Metaverse.

How does play-to-earn (P2E) work?

Wouldn’t it be great if you could earn a living playing your favorite games? You might think that sounds too good to be true, but thanks to the exciting play-to-earn movement, lots of gamers are already earning extra cash — or even a full income — simply by enjoying P2E titles in their spare time. So, how exactly do play-to-earn games work?

You’ll be familiar with the pay-to-play model the gaming industry has long used across consoles and PCs. This involves paying a fee to acquire a game either digitally or physically — then often paying additional fees later to unlock any new content that is added. We’ve also seen a rise in free-to-play games, especially on mobile devices, that let you access a title with no upfront cost.

In recent years, many free-to-play games, as well as some pay-to-play games, have also become services. They offer “battle passes” or some other kind of content pass, which provides access to things like cosmetics, new maps or levels, additional weapons or items, and more in return for a regular fee. With all of these models, however, there is no real reward for the player.

Any unlocked items remain stuck inside the game in which they were issued in almost all cases, so they’re essentially useless if you decide you no longer want to play that game. Play-to-earn solves that problem by rewarding players with digital assets, usually in the form of cryptocurrency tokens or NFTs, that can be exchanged or sold for traditional fiat currencies.

For instance, let’s say you play a game in which you collect and breed virtual pets that are issued as NFTs. If you decide you don’t need all those pets, or you no longer want to play the game, the NFTs can be traded for cryptocurrency or sold. Alternatively, some P2E games let you take your assets into another game or Web3 application.

Most P2E titles are decentralized, so they are managed or governed by their community, rather than a central entity or small group. Some even provide supporters with governance tokens, which give them the ability to vote on future changes or improvements, allowing decision-making to be a collaborative process.

Why is play-to-earn growing in popularity?

Many of us find all kinds of games entertaining, even when they use the pay-to-play or services model. However, the opportunity to essentially get paid to play makes P2E titles even more appealing for an ever-increasing number of gamers, particularly those in emerging markets where it can be difficult to obtain traditional employment or generous salaries.

The latest data from Verified Market Research (VMR) reveals that the NFT market is currently worth more than $11.3 billion, and that’s expected to grow 33.7% annually over the following eight years to a total of $231 billion by 2030. P2E gaming is one of the easiest — and most fun — ways to claim a small but potentially valuable slice of that pie.

In some regions, such as the Philippines and Vietnam, some have made P2E gaming their full-time job, and they are earning a sizable sum of money from it. Some estimates suggest that top players are collecting between $1,000 to $2,000 per month with as little as one hour of play every day. Of course, this can vary depending on the value of certain assets.

Furthermore, P2E games are becoming more accessible over time. In most cases, all you need is a capable device, like a smartphone or tablet that can play games, and an internet connection to get started with play-to-earn gaming. This has helped some of the most popular P2E games attract close to 1 million players, and again, usage is only expected to grow in the coming years.

How are play-to-earn games financed?

The rise in popularity of P2E games, as well as the wider GameFi industry in general, has been recognized by venture capitalists. In the year leading up to May 2022, more than $3.6 billion was invested into cryptocurrency projects focused on P2E gaming, taking the total value of the industry to well over $200 billion. But this isn’t the only way P2E games are financed.

Many receive a lot of their funding from those who enjoy them. Players and fans buy their tokens, or purchase assets themselves to gain an in-game advantage. Some P2E titles also require players to obtain certain assets before they can start playing. For example, to play Axie Infinity, one of the biggest P2E titles, you need at least three Axies (virtual pets) to get started.

These revenue streams not only ensure that game developers can maintain and update their titles, but they also allow P2E games to continue rewarding players for their efforts.

What are the most popular play-to-earn games?

Here are five of the biggest play-to-earn games on the market today:

Axie Infinity

A game in which players collect, breed, and battle virtual pets known as Axies. These can be turned into NFTs that can be traded or sold.

Decentraland

A virtual universe in which players can explore a variety of different environments, from space colonies to medieval settlements. Users can create their own adventures and worlds, play games with friends, and acquire virtual real estate.

The Sandbox

Like Decentraland, this is another virtual universe in which there are a wide range of environments and games to explore. Players can acquire land and monetize it, as well as collect and trade virtual assets that can be used to customize their space.

Genopets

A game that’s heavily focused on encouraging players to lead an active lifestyle by providing pets whose growth is based on real-life activity. The steps a player takes in the real world are tracked and power their journey through the Genoverse.

Vulcan Forged

An ecosystem of fantasy games that offer a variety of gameplay options, including role-playing adventures, deck builders, battle chess, and lots more.

Play-to-earn games and NFTs

As we touched on above, many play-to-earn games are built around NFTs, or non-fungible tokens. Rather than simply rewarding players with cryptocurrency tokens, which may not have that many use cases, they reward them with virtual items instead. These might include creatures or characters, outfits and accessories, weapons or abilities, and more.

These items can be used in-game to give the player an advantage of some kind, and in most cases, there are varying degrees of rarity and effectiveness for each one. For instance, a particularly rare item may allow a player to progress a lot faster, which in turn allows them to collect new rewards a lot quicker, or give them a strength advantage over others, for instance.

For many P2E gamers, however, it’s what you can do with those items outside of the game that’s really exciting. Many of these virtual rewards can be turned into NFTs, which can then be traded or sold for cryptocurrencies or traditional fiat currencies. Some can be very valuable, and if you collect enough of them, it’s possible to earn a decent sum of money from them.

Play-to-earn games and the Metaverse

Alternatively, you may have the option to take your NFTs into the Metaverse. With the rise of Web3, many developers are pushing for a much more open internet that allows assets earned inside one game to be used elsewhere. For instance, you might collect a virtual pet inside a battling game that you can then show off inside a virtual universe.

Very few titles offer this ability right now, but the hope is that that will change as the Metaverse becomes more mainstream and more companies recognize the value of an open internet.

References

• Nft statistics 2022
• Blockchain games user number
• What is play to earn
• Play2earn
• Axie-infinity