Play-to-Earn (P2E) is a new term for video games where gamers can earn cryptocurrencies and NFT tokens through their gaming activities. The Play-to-earn trend has gained a lot of momentum in the past few months.
Gamification itself is a huge global market. There are more than 2.7 billion gamers in the world. And analysts expect the industry’s value to exceed $300 billion in the next few years. However, there are two major problems in the industry:
- Players don’t own their purchases in the full sense of the term. In-game items (equipment, weapons, power-ups, and so on) enhance player performance and enjoyment, but serve no other purpose. As a result, they fall into the category of entertainment expenses rather than investments;
- Lack of business model choice. 80% of total digital game revenue comes from free-to-play games. This kind of restricts developers and types of gameplay mechanics, as well as the development of the industry itself. However, as new business models for game developers emerge (e.g. commissions from NFT secondary sales), new forms of gameplay will emerge.
A new Play-to-Earn trend could change the landscape of the gaming industry. This trend covers development on multiple blockchains at once. The number of games has already exceeded 200, and they take up to 45% of the traffic of all decentralized applications. As a result, the trend is even being recognized as a separate area of GameFi (Game Finance).
The concept is very simple: users can earn real money or other rewards just by playing a game!
The easiest way to understand this is through a concrete example – Axie Infinity. Axie Infinity is an Ethereum-based blockchain game with fantasy characters that is a lot like the acclaimed CryptoKitties. The gameplay of the game consists of players growing, breeding and fighting their Axie characters. In doing so, players can earn money from breeding the critters or through victories on the battlefield.
In addition, each Axie is technically a non-fungible token (NFT). Therefore, each Axi has its own special characteristics that set it apart from other creatures. Axi can be crossbred. In this way, new animals appear in the game. Some of them are characterized by unique characteristics, thanks to which they can be sold profitably.
Importantly, the game will require startup capital to purchase Axie on the Axie Infinity Marketplace. The animals are sold both as adults and at the mature stage (in the egg). They will later grow into full grown Axies. From the egg stage to the emergence of the individual takes 5 days. Afterwards, pets (NFT) can be sold for Ethereum.
The goal of the game is to build as strong and unique army of Axi as possible. To do this, you can team up with other players. The formed army can be sent to war against other gamers or travel around the game world (Lunacia) in search of adventure.