The gaming industry is going through a massive growth phase, and the play-to-earn model opens new opportunities for blockchai
If you’re conversant with the cryptocurrency space and you keep tabs regularly on the happenings going on in the ecosystem, then you felt the excitement during Bitcoin’s (BTC) rally to $63,000 in mid-April. This excitement is currently being caused by the bullish mood crypto enthusiasts and stakeholders are in at the moment. And this bullish sentiment is a result of the gaming niche.
A lot of people say it’s decentralized finance (DeFi) season and I can’t even argue otherwise with them because the facts are there for all to see. DeFi-based nonfungible token (NFT) games are pumping to record highs and they continue to get a lot of people adopting and playing them which makes one wonder, what exactly is the motivating factor behind gamers and crypto enthusiasts flocking in the thousands and spending hours every day playing these games.
The answer is simple really. It is because these people not only have fun while playing, but they also earn rewards during game time. What’s more, these are not just in-game results, these rewards can be exchanged for fiat currencies and can be spent in real life. The video game industry is currently going through a massive growth phase. Today, the industry is valued at around $170 billion and it is expected to surge to $268 billion worldwide over the next five years.
The play-to-earn phenomenon
I think game developers have found a sweet spot here with the play-to-earn model of gaming. First of all, what is this about? Play-to-earn is simply giving gamers and gaming enthusiasts control and ownership over in-game assets, further allowing these gamers to increase the value of these assets by actively playing the game. Players in this business model create value for the game developers and other players by participating in the in-game economy. As a reward for their participation, they are given in-game assets. These assets range from in-game resources like gaming tools, weapons or cryptocurrencies, to other in-game assets that can be tokenized on the blockchain and even sold as NFTs. This is why the play-to-earn model of business has succeeded when being used with blockchain games. The play-to-earn game Axie Infinity’s total revenue closed toward $120 million in July. At the time of writing, the rest of the top ten apps on Token Terminal’s list totaled around $41 million combined, while Axie Infinity’s hits above $215 million.
When players play the Axie Infinity game, they earn the native token Small Love Potions (SLP), and these tokens are needed by the players to breed new Axies, which are charged by Axie. Axie also charges a 4.25% fee for buying and selling Axies on the platform. Players can also decide to sell SLP tokens to other players on an open marketplace if they decide to cash out these tokens.
Play-to-earn games and developing countries
It sounds shocking and maybe even funny, but this is the reality: An average player can earn around 4,500 SLP per month, which is around $1,200. As a result, people in countries like the Philippines and Vietnam are quitting their day jobs to dedicate themselves to playing Axie. The game is both time-consuming and strategic. Players are not only required to carefully breed their Axies to develop particular skills, but they also need to earn energy that allows them to play the game further by completing quests. Though, it is worth noting that there are workers in these countries who see this as a side hustle rather than a day job.
Axie states there are more than 350,000 daily active players on the platform. This might sound ridiculous to some people, especially non-gamers, but the beautiful thing about this is it has helped a lot of people through the financial struggles caused by the ongoing global COVID-19 pandemic.
Blockchain games, which started as a small cottage-like industry of individuals selling their online products, has rapidly transformed into a full-fledged industry that is offering employment to people in developing nations. For financial stability and regular paychecks, people in Venezuela have reportedly turned to farm gold in various games on the blockchain. They sell their digital assets to western gamers and this is, most often than not, their primary source of income.
In his commentary on the recent boom of the play-to-earn gaming model, especially by Axie Infinity, managing partner of Master Ventures Orion Depp said: “At first, a lot of people were not convinced that they could earn rewards that could affect their real-life finances until they tried it. It just goes on to show how life-changing and revolutionary crypto continues to be, this time in a fun and enjoyable way.”
I couldn’t agree more with Orion’s take. People are literally getting rewarded for putting their time and effort into a game while having fun in the process. It sounds so simple, but this is a model of gaming that is working and is changing a lot of lives. Some other examples of the play-to-earn model of games that are succeeding just like Axie Infinity are Splinterlands, GamyFi, Step Hero and CryptoBlades.
Some more examples
Splinterlands is a card trading game that is built on the blockchain where players go on to compete essentially for a limited number of Splinterlands’ native token Dark Energy Crystals (DEC) and rare NFTs. The game created in 2020 has managed to build a really strong following. Set in a fantasy world that is made up of six powerful kingdoms battling for the control of Splinterland, Game of Thrones fans would find this game very easy to fall in love with. Just like Game of Thrones, there’s a prophecy that predicts the coming of a common and more powerful enemy that forces the six kingdoms to come together and fight for their survival.
Splinterlands use of in-game collectibles and NFTs puts it in a very unique light, and because it is built with an algorithm on the blockchain that prevents the results of battles from being tampered with (not even the game creators can touch it), it is considered one of the best play-to-earn games out there at the moment.
The company recently concluded a private token sale that brought in about $3.6 million with leading industry players contributing to the token raise that was centered around the SPS token. Some of the crypto funds and players that contributed included Enjin, Polygon, Gate.io, Alpha Sigma Capital and Blockchain Founders Fund, for example.
Built on the Elrond blockchain, GamyFi is an e-sports gaming platform that incentivizes sports fans, gamers and crypto enthusiasts to use their skills and knowledge on the platform. These gamers are rewarded with exciting NFTs and in-game assets. The GamyFi platform uses blockchain technology to keep a fair-for-all platform while being fast and secure. The platform has the GFX token as its in-game currency that users are rewarded in and transactions are carried out with.
GamyFi currently has five applications running on it.
- Fantasy sports: Users can create their own fantasy sports team and players can earn points as they perform well in real-time. Fantasy sports on GamyFi are football, baseball, cricket and soccer, to name a few.
- Lottery: Users can buy lottery tickets using GFX and join the pool of other participants to win the mega prize.
- NFT marketplace and games: Here, users of GamyFi collect, play, buy, or sell NFTs and games.
- PVP multiplayer games: With this option, GamyFi users can synchronize with real-time multiplayer games and custom rooms that can be created. Users can play with their friends or against other GamyFi users.
- Prediction market: Here, GamyFi users can predict the results of events, sports matches and elections. If their predictions are correct, they can share in the winner’s pool.
Step Hero is the first NFT fantasy-themed RPG game on the Polygon network — which has extremely low fees and instant transactions — making it the perfect combination of DeFi and NFT gaming. The ecosystem enables its users to have fun playing the game while earning profits at the same time. The plot is set during a post-apocalyptic war between the Heroes led by archangel Gabriel and the army of Shadows led by Lucifer — the Demon Lord. Players play the hero roles, and their missions include fighting the villains in battles while building their energy by collecting in-game assets, earning money called STEP coins and upgrading their characters.
The entire Step Hero ecosystem is made up of the Step Hero RPG game, the NFT marketplace and the Heroes Farming. Step Hero also moves beyond its gaming boundaries with a strong community that helps players on the platform invest in activities that encourages them to earn money from the game.
Gamers can generate revenue in the following ways:
- They can sell in-game assets such as self-crafted weapons, healing potions and power-impulse-potions on the marketplace for money.
- They can earn prizes once they win in player versus player (PvP) battles.
- They can upgrade their characters and trade them later. Here, the more unique and powerful their characters are, the more profit they earn.
CryptoBlades is a play-to-earn game where players take on roles to battle monsters, participate in raids, craft unique weapons and trade their in-game assets on any open marketplace they wish. Players of CryptoBlades get rewarded with the SKILL token, depending on their level of skill and consistency. Created by game development company Riveted Games, CryptoBlades is elegantly designed to prevent bots. Weapons of high and low grades are listed on the marketplace, and the higher the value of a weapon, the more SKILL tokens users get as they claim victories. As of writing, CryptoBlades has over 300,000 active users and has led to over 100 million transactions on the Binance Smart Chain in under two months since launch — leading to mass adoption of blockchain protocols on levels that have never been seen before.
While the digital game knows no borders, it has really taken off in the Philippines, which has been hit hard by the global COVID-19 pandemic with a GDP decrease of 9.6% in 2020, the largest annual decline ever recorded since data collection began in 1946. Play-to-earn games on blockchain have allowed people to earn money while being locked down in their homes.
The game has received backing from significant names like Binance, IGN and Steam, as well as becoming a recipient of the Binance Most Valuable Builder II program. Moreover, the Cryptoblades team boasts of a completely decentralized system with over 50 developers and a GitHub open for participation from players, holding huge bounty rewards for finding bugs to improve the game.
Play-to-earn and the future of blockchain gaming
Play-to-earn games are the latest innovation in the blockchain gaming industry. It will revolutionize how people interact with the economies of their favorite games. It has ensured and embraced the concept of an open economy, making sure players who bring value to the gaming world are rewarded financially. This has, in turn, seen a domino effect of sorts on the crypto markets as a lot of people are trooping to these games (regardless of how gaming-oriented they are) to play and make money for themselves.
The markets are on an upward trajectory because these games are getting investments from both big institutions and retail investors alike. This really is the DeFi season, and I expect it to be so for a while as more and more games will keep on getting recognition and traffic. This would lead to more investment which ultimately depends on the market. The immediate future is green and you’d be wise to take part in these play-to-earn games.