Within the blockchain space, NFTs have begun to drastically change many sectors already, such as the gaming industry. Inspiring new blockchain games such as Axie Infinity, Alien Worlds, Gods Unchained, Splinterlands, Upland have popped up. These games are adding a new dimension to the way people play games. More specifically, they have introduced NFTs and established a new business model known as Play to Earn (P2E) gaming. While those behind the aforementioned games will tell you that this model is changing the industry for good, there are also some potential downsides to this new model. We aim to provide a critical look at these claims things in the Snorfkingdom. In this article we will discuss the positive and negative aspects of the P2E gaming model and its potential. Without further ado, let’s dive in!
What is Play to Earn Gaming Exactly?
Besides being a catchy slogan, there is a lot behind the idea of Play to Earn (P2E). The concept is evolving as time goes on and games develop. In simple terms, P2E allows players to capitalize on in-game economies in a new way. Establishing things on the blockchain puts gamers in true “ownership” of their in-game currencies and assets. The main difference between this and non-blockchain games is that these currencies and assets are built and tokenized on a blockchain. This makes them easily transferrable from player to player, capable of gaining/losing value, and “earnable” through in game activities. This is also where the term “Play to Earn” originates.
This model existed in some form previously with online games. However, blockchain games empower players with true physical ownership and control over their in-game assets. As a result, many P2E games have obviously popped up in the media, especially when extremely large transactions taking place. Some examples are major purchases of land or other valuable NFTs which have in-game value. This has also attracted significant institutional investment in the blockchain gaming world. Also, P2E has sparked interest from existing gaming companies to dip their toes into the water of blockchain. Regardless, there areupsides and downsides to this model which should be understood before going “all-in” on P2E games.
Positive Aspects of Play to Earn
P2E’s innovative gaming business model provides numerous positive aspects which should be considered when thinking about gaming. Firstly, the P2E model provides gamers with the potential for their in-game assets and time investment to create and/or grow in value. In some cases this is used for other forms of return (such as currency generation by land tokens, staking rewards, etc.). This is revolutionary for many gamers, who previously have played games without any inherent potential for value creation other than the value of a good experience from gaming.
In addition, blockchain games have brought an additional level of power to gamers through the development of DAO governance systems. Decentralized Autonomous Organizations (DAOs) give P2E players influence on the way game development goes over time. In some cases this also has an impact on in-game activity through governance of lands or other game properties. The implementation of DAOs in the gaming space will change the way that gaming companies interact with their communities. This is not only due to the need to please the community, but also gives them additional power and influence.
Next to these positive aspects, an undervalued aspect of the P2E model is the gamification of blockchain technology. By gamifying a complex technology, P2E game developers can serve as a positive gateway for introducing cryptocurrencies, NFTs, and blockchain to a much wider audience. This may result in long-term growth in adoption around the world.
P2E: A new phenomenon
Alongside the benefits of potential return on gaming assets and activity and the positive aspects of game governance through DAOs, P2E games have also brought about an interesting phenomenon of empowerment for gamers, particularly in countries with less-developed economies.
Currently the most notable example of this is the game Axie Infinity, developed by Sky Mavis. Through the P2E gaming model, many players have been empowered to create so-called “scholarship” systems. They lend access to in-game assets and resources which other players may not be able to afford. This allows players to utilize these in exchange for a sharing agreement on the assets and/or currency generated. This has benefitted many individuals from around the world (particularly in Southeast Asia) through creating income from their gaming activities. The aforementioned “scholarships” play a big role in this shift.
Simultaneously, this has provided an interesting opportunity for gamers with sufficient capital to start and manage these programs. They are able to generate value both in-game and the real world with their scholarship programs. The merits of the P2E gaming model are genuinely exciting and have created a rapidly growing sector in the industry. However, there are some negative aspects of P2E which are frequently glossed over by blockchain game developers and their communities. In this article we will explore some criticisms and food for thought to give a more critical perspective of P2E.
Negative Aspects of Play to Earn
Blockchain technology has revolutionized many industries. But, due to the level of complexity of it, many newcomers to cryptocurrency, blockchain, and NFTs become victims of scams. By gamifying the blockchain, the P2E blockchain gaming model helps make blockchain relatively simple for new users. At the same time this leaves them susceptible to scams or loss of assets to malicious actors. This is probably the largest issue which blockchain games have been facing. Scams result in significant losses for gamers, and also turn them off to blockchain technology as a whole.
Alongside being a potential playground for scammers, P2E games so far tend to be limited in their gameplay. For example, many games focus a lot on in-game land(s), staking, “breeding,” or other blockchain transactions. This results in speculation on those assets and limits gameplay to many forms of competitive games. In these games users are forced to battle, craft new items or continuously mine limited resources for potential profit.
So far, there has been significantly limited range in the Blockchain gaming sector as a result. This in it of itself can be a limiting factor in the growth of the industry. Many gamers prefer a wide range game genres which up until now are not available on the blockchain. Perhaps it’s better it stayed that way, but only time will tell how this gaming model develops
Last but not least, the largest negative aspect of Blockchain gaming is the capitalization of gamers. More specifically, Blockchain games run the risk of overcapitalizing on the gaming experience in the name of profit at the expense of game content, gamers with low capital, and also at the expense of those unfamiliar with the blockchain. Many gamers already have gripes with microtransactions, play-to-win models of gaming. These are forms of income-generation which gaming companies have already utilized, so they are not new. The P2E model could unfortunately see a similar fate if it is not managed effectively! Many AAA gaming studios and institutional investors are begin to inject significant funding into many of the largest names in blockchain gaming. This may result in unnecessary stress for gamers, who prefer gaming as an escape rather than another chore or work.
In the end, P2E games are clearly here to stay. The business model of blockchain gaming is however, a double-edged sword which brings with it some inherently positive and negative traits. Although the introduction of DAOs, in-game asset ownership, gamification and empowerment continue to be touted as the undeniable proof that P2E gaming is the future, there are some significant, yet overlooked downsides which also must be factored into the assessment of blockchain games.
Notably, these games are at risk of scams and loss of assets, limitation on gameplay and game genres, and the overexploitation of gaming communities by developers and investors who see this new model only in terms of profit, thus putting money at the forefront of yet another gaming sector with limited emphasis on gameplay and content. Regardless of how you see P2E games, always be sure to do your research on a specific project before purchasing any gaming items or currencies, and keep a critical mindset as the games develop over time. Thank you very much for reading this article, and drop a comment below and let me know what you think about P2E gaming!