The gaming industry is one of the most successful worldwide, with a market value that is estimated to reach 365 billion USD in 2023. Since the 1990s, when video games became a more mainstream source of entertainment, players have engaged with games that encourage them to progress through challenging levels. Now, a new type of game seeks to revolutionise the industry by combining gamification with the possibility to make a profit.
What are pay-to-earn games?
As their name suggests, pay-to-earn games (also known as crypto games), are online games that allow players to earn rewards—typically small amounts of cryptocurrency, skins, and virtual land. In order to get these rewards, a player must complete various tasks, join special events, battle other players, and progress through the game’s various levels.
Players can then sell and trade their rewards with their peers, which will help them rank higher on the live leaderboard and continue multiplying their earnings. It’s also possible to exchange the earned cryptocurrency with fiat money once its value increases over time or thanks to market trends.
Play-to-earn games benefit game creators as well. Every time the game is played, developers make a profit.
When it comes to developing a profitable play-to-earn game, developers can take two approaches. One of them is to create a game with its own native cryptocurrency in the form of tokens. While these tokens act similarly to the in-game currencies of traditional video games, they have real-world value. Another option is to rely on existing and familiar cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Dogecoin, etc.
What are NFT pay-to-earn games?
No discussion of pay-to-earn games is complete without mentioning NFTs. In short, NTFs (Non-Fungible Tokens), are digital tokens on the blockchain that represent a unique item, be it an image, music, or even a tweet. Because an NFT is “non-fungible”, it cannot be swapped identically for another token. For example, while you are able to trade 1 bitcoin for another bitcoin, this isn’t applicable to NFTs.
In NFT play-to-earn games, players can own characters or avatars, which are NFTs themselves. If the game were to shut down or cease to exist for whatever reason, that NFT will remain the player’s property.
Throughout these games like Axie Infinity, a player is progressively rewarded with tokens and a few NFTs on occasion. In games such as CryptoKitties, rather than collecting tokens, the player can earn NFTs that represent collectible items.
Can players make a profit?
Play-to-earn games have become popular ways to have fun while making a profit. However, the amount of money a player can earn will largely depend on the specific game mechanics and market demand, which all vary from game to game. In general, the money comes from other users who collect NFTs or use the cryptocurrency utilised in the game. To cash out, a player must sell the products on the market or trade them.
Of course, earning crypto tokens or NFTs isn’t as easy as it might seem. Similar to games such as Aviator, there’s an element of chance to them. The more players engage with a particular game, the more likely they are to get tokens or earn NFTs, which are more chance-based.
Popular pay-to-earn games
Axie Infinity occupies a spot in almost every pay-to-earn game ranking. Players can collect creatures known as “axies”. It’s possible to breed axies with other axies or make them battle each other to earn crypto tokens called “smooth love potions” or simply SLP.
Similarly to Axie Infinity, CryptoKitties allows players to deal with creatures—only it is cats with unique traits that distinguish them from the rest. This Ethereum-based blockchain game allows players to buy, collect, breed, and sell their virtual animals.
Yet another popular game is Decentraland, which gives players access to a 3D world where they can purchase virtual land. The land can be worked on, rented, or sold to other players in exchange for the MANA cryptocurrency.
To conclude
While most pay-to-earn games are in the early development stages, their popularity will likely continue soaring with the proliferation of cryptocurrency and NFTs. Axie Infinity, CryptoKitties, and Decentraland are some of the games that are providing both a source of entertainment and the opportunity of making a profit.