Gaming is an industry that has exploded over the last decade and continues to show no slowdown in adoption and maturation. Today, gaming has become the most prominent media category by revenue–standing larger than the global music, film, and on-demand entertainment sectors combined. However, the way gamers interact with games is changing; through recent innovations enabled by blockchain technology. Areas of gaming are transitioning to enable use case that goes far beyond just entertainment and social interaction, allowing you to thrive and earn in the form of cryptocurrency.
Looking to the future, as a gamer, you will be able to diversify your income by receiving real-world value from playing and interacting with your favorite games. Democratizing the gaming industry, rewarding gamers, and enabling them to thrive in ways previously not imagined.
Gamers being fairly rewarded for playing games could previously be perceived as an oxymoron; certainly a paradox of expectations, yet this system has remained since the inception of gaming.
I. How do Play-To-Earn Games work?
The main distinctive feature of play-to-earn (P2E) based games is that they are built on the blockchain, which facilitates a monetization system for gamers and developers, allowing for an in-game exchange of assets and rewards to be processed in digital currency. These in-game currencies and non-fungible tokens are redeemable or exchangeable for major cryptocurrencies, enabling you to exchange to fiat currency and withdraw as you desire. Thus presenting blockchai games as a popular and exciting opportunity to a broad audience of gamers, encompassing a variety of different backgrounds.
Video games may be transitioning from a pastime based on the predetermination of purely entertainment, to a new reality that generates real-world value.
Previously, the assets and rewards gamers collected within a game, such as coins or skins, ultimately belonged to the game’s creators. Where outside of this universe, these accumulated assets transferred a lack of value as utility and function were absent. The game developers have the right to update asset functionality or close down gaming features that could impact the in-game assets you own. You would inevitably lose access to all the goods you’d attained from time spent playing, which is often a shared frustration among gamers.
This highlights the value proposition of the P2E gaming concept, as well as demonstrates precisely why it has the potential to revolutionize the gaming industry. In the play-to-earn paradigm, all of the digital assets in possession are owned and controlled by gamers.
By and large, the play-to-earn gaming model facilitates the creation of a virtual trading market for in-game assets through non-fungible tokens and a token currency used as a universal medium of exchange within the ecosystem. This enables the gaming economy’s monetization for gamers, as well as the evolution of how developers and gaming studios operate financially.
II. Free-To-Play Gaming Model
Free-to-play (F2P) is a popular gaming standard across the industry and refers to an online gaming model in which the game developers do not charge for access to the game. As an alternative strategy, the revenue comes from advertisements or in-game sales–such as gaming items, upgrading access, and reward packs.
We’ve seen some hugely successful games in this format, from the quality of user experience to international awareness and adoption. Fortnite, for example, is a free-to-play game that has amassed a worldwide audience and passionate gaming community.
These games are dependent on users purchasing items or paying for access to elevated content once they become versed with the game mechanics.
This model has become prevalent as developers recognize the ability to produce increased revenue from continued in-game purchasing of items and content. Thus, enabling them to continually expand the gaming universe to provide more content and sellable items.
The drawback here is that revenue comes from predominantly one source, meaning once user interest fades and purchasing of in-game content drops–so does revenue. In contrast, the play-to-earn model provides developers with multiple revenue streams, made possible through blockchain technology.
III. Benefits of Play-To-Earn Games
Pertaining to the value presented by the play-to-earn gaming concept, a combination of real-world monetary value and interesting social concepts is enabled through innovative technology.
However, there are several other uniquely impactful implications to consider:
1) Real ownership of in-game assets
The use of Blockchain technology in play-to-earn games implements transparency over the assets owned by gamers, thus, securing the ownership of the in-game inventory and putting more control in the hands of the gamer. Comparatively, gaming is currently built on a standard server, where an item has the potential to be deleted or transferred.
Blockchain fundamentally means game developers cannot alter assets once under the user’s possession. This aspect is a significant advantage that play-to-earn models have over what we currently experience and is a consequential factor in why blockchain technology is increasingly gaining adoption.
2) Earning Potential
The foundational principle of play-to-earn allows users to earn real money while playing. In P2E models, gamers amass assets that have value outside the specific game ecosystem: ranging from in-game currency and cryptocurrency to non-fungible tokens that collectors can trade in select marketplaces.
At any point, a gamer can sell different assets on marketplaces for cryptocurrency, which is exchangeable for the fiat currency of choice.
This is game-changing for many gamers, who can now be rewarded financially for the significant time they spend on gaming. This is especially significant in third-world countries, where the US dollar is valued comparatively higher than local currencies, encouraging many to use play-to-earn games to earn an alternative income.
3) Gamer Friendly
What makes play-to-earn so unique is how it puts the user experience first. Developers are building engaging and socially interactive games which draw in gamers. User growth often encourages higher incentives for gamers, with fun and fair rewards being a factor in keeping users active.
For games to work efficiently, there needs to be a compelling gaming experience to retain users for reasons beyond predominantly the financial aspects. Therefore this has become a driver for developers when building.
4) Community
The implementation of play-to-earn models in games can assist in creating a passionate and loyal community. Established communities are built upon a shared enjoyment of the game and show increased growth and strength from the value creation gamers generate from regularly playing. We’ve already seen some strong communities come together during the past few years, such as Axie Infinity. Paving the way for future gaming companies to cultivate a similarly passionate community experience.
5) Creating Value
Gamers in play-to-earn games do not only create value for themselves; they create value for the game. Developers of the game get revenue, and the gamers own the assets acquired, all of which translate into tangible, real-world value. The way in which value creation is formed in gaming is changing, displaying benefits for both sides.
IV. Future of Gaming
Looking ahead, the play-to-earn model for gaming is still an evolving process that has a way to go to establish mainstream adoption. However, the foundations are being built to become the future of how gamers interact with games and the positive opportunities this creates.
Here at reNFT, we build infrastructure services aimed at helping gamers to benefit from this rapidly evolving industry–by providing onboarding services for gaming companies to integrate with our NFT rental protocol, enabling their gamers to use NFTs as rental services.
Opening up new opportunities for real-world financial benefits, as well as creating some of the most robust online communities; developed through innovative social gaming experiences. Services such as these significantly reduce the barrier to entry by allowing gamers to rent assets that one may need to access certain games or features.
With many companies in the space pushing innovation and development, the play-to-earn model is undoubtedly making significant steps forward. A solid digital economy and ecosystem are built around games, laying the foundation for a long-lasting industry.
The introduction of games that reward you for playing and participating, assuming gameplay and enjoyment are comparable to non-blockchain counterparts, will most likely become the superior option from the gamer’s viewpoint.
The founder of Reddit, Alexis Ohanian, predicts that 90 percent of the gaming market will be play-to-earn games within the next five years.
“90 percent of people will not play a video game unless they are properly valued for that time,” — Alexis Ohanian
In years to come, gamers will value their time accordingly; instead of being spammed with advertisements or spending money to buy in-game items with no ownership attached. Alternatively, gamers will be playing an on-chain equivalent that will be just as fun–where they will earn actual value.
The evolution of the concept will no doubt encompass new methods of generating income. Pushed through the adoption of large companies–selling digital products and experiences, renting land, or creating digital services. All brought to fruition through the creation of the Metaverse, whatever form it takes.
As of right now, the concept is in its infancy but is organically gaining adoption with an engaged audience that can now invest their money and time in something that rewards them accordingly — putting the power in the hands of the gamers.
The future of gaming is evolving for the better, enabling the users to thrive and rewarding them for everything they bring to the industry.
Thanks for reading!
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reNFT is the FIRST & ultimate NFT rental protocol for your #Web3 project. A multi-chain protocol and platform that can be white-labeled and integrated into any project to enable collateral-free in-house renting, lending, and scholarship automation!
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