Gaming is already the most lucrative entertainment medium on the planet. The advent of web3 is offering new ways for game developers – and gamers themselves – to make money. So what is “play to win” (P2E) and why should experienced gaming marketers worry about it? Here’s what you need to know.
Blockchain technology and cryptocurrencies are creating a new variety of games that allow users (in theory) to win “money” while playing. They allow players to create or purchase in-game assets, linked to non-fungible tokens (NFTs). By gambling, the owners of these assets are increasing their value.
Resources, lands, and game items are effectively tokenized, which means they can be sold to anyone, anywhere in open peer markets. To put the value of some of those assets in perspective, an avatar of the Axie Infinity game was sold for 300 ETH, the equivalent of about $ 120,000.
That’s the basis of the economics of P2E games discussed, which turns the elements of the game into assets that players can own, increase in value, and ultimately sell to make money in the real world.
The developers of Axie Infinity – Sky Mavis – explains it in ambitious terms: “Axie has 100% real money savings owned by players. Instead of selling items or copies of the game, game developers focus on growing the economy from player to player. Market rates go into a community treasury whose use will be guided by AXS holders Developers monetize through their ownership of AXS tokens Players create axes using game resources and sell to other players.
“You can think of Axie as a nation with a real economy. The holders of the AXS token are the government that receives tax revenue.
Brands and celebrities are launching into space, attracted by the opportunity to take a share of any sale. Famous chef Gino D’Acampo has invested in Big Town Chef, a metaverse game that “allows players to cultivate, exchange virtual ingredients, and compete in cooking battles.” The chef avatars created by the players, including D’Acampo, are ultimately the investment that will be exchanged.
For brands like Nike, which have already been successful in developing their own metaverse spaces, the opportunity is to effectively use players to increase the value of their branded NFTs and reduce sales.
The interaction between real and virtual currencies in games takes years. World of Warcraft, one of the world’s largest online multiplayer games, has struggled to control its gold-plated population, in which the game’s currency was bought and sold illegally for real-world coins. Other multiplayer games, including EVE Online, with complex in-game savings, have seen some $ 378,000 worth of real-world assets being eliminated in individual in-game incidents.
Players have been accustomed to thinking that those game coins are real for years. But with the advent of NFT, which can be traded on the blockchain for cryptocurrencies, it has become very literal.
Since then, however, things have turned around. Axie Infinity has been the subject of the “biggest cryptocurrency theft of all time,” with about $ 600 million stolen. The lack of stability in the market was also highlighted as the official NFT Formula 1 game, F1 Delta Time, closed due to licensing issues, as the chips created by the players in that space are practically useless.
The challenge for NFT advocates in gaming is to understand how to attract an audience that is not impressed by the inclusion of NFT to date. There have been many more reactions against gaming audiences around NFT’s perceived intrusion into long-running franchises than successful executions.
Ubisoft is moving away from Ghost Recon Breakpoint, home of its first major NFT experiment https://t.co/R1qYt9VcJi
– Eurogamer (@eurogamer) April 6, 2022
Team17 was forced to drop out of their NFT plans after a fan riot. Ubisoft, the publisher of titles like Far Cry and Tom Clancy’s Ghost Recon series, has seen a similar reaction against their attempts to insert NFT into their games, both from their audience and their developers.
He also talks about the need to add value to the gaming environment in which NFTs are launched. That is not a marginal point of view – Reddit co – founder Alex Ohanian believes P2E will be the dominant form of play in a few years: “In five years, you’ll really value your time properly. in a chain that will be just as much fun, but in reality you will gain value and be the harvester ”.
It remains to be seen whether the NFT will enter the game space long enough for that to come true. The price of many NFTs dropped earlier this year, and there is still a huge reputation issue to be overcome by the general public. As the Axie Infinity and F1 Delta Time warning tales show, there are still safety concerns.
What is already clear, however, is that a major investment is already flooding the NFT gaming space. – but that brands have to be extremely careful not to add value to players.