Play-to-earn gaming has been one of the hottest sectors in the cryptocurrency market in 2021. Games like Axie Infinity, Splinterlands, My Neighbor Alice, and many more have proved to the world that this exciting new model is not only viable but also extremely popular, with hundreds of thousands of weekly active users across tons of projects, some of which have had explosive token prices to boot. And now, with traditional gaming companies such as Atari entering the space, the question still remains: what is a P2E game, exactly? In this piece, we aim to find out.
Play-to-earn games are fundamentally based around one concept: game theory. Blockchain-based play-to-earn games use game theory and economic incentives in the form of various tokenomics structures to drive user behavior. That can mean rewarding certain repetitive behaviors in the game, rewarding users who win competitions, or even just giving users a base rewards rate in exchange for the time they have put in. This turns the traditional model of pay-to-play completely on its head, and has been known to create extremely strong communities around each game. Indeed, users with an understanding of in-game economics stand to greatly benefit from play-to-earn gaming, as the tokens and resources that users are used to are coming out of the game and into their own wallet. Outside of the finely tuned economics and game theory of play-to-earn gaming, there is another important cornerstone of P2E: ownership of in-game assets via NFTs, or non-fungible tokens.
You see, gamers paying for in-game items isn’t new. Whether it is an exclusive new skin or camo, or an upgraded structure that will give benefits in-game, in-app purchases of in-game items have become extremely common ways for companies to drive more revenue and to give gaming enthusiasts the type of content that they want.
However, this practice has historically been a one-way transaction, with users only able to use the item inside of the game, and unable to recuperate any money afterwards if they would like to sell them.
There are some notable exceptions — such as CS:GO — all of these systems have required a degree of trust in order for users to transact — until P2E came around. By shifting the ownership of in-game assets to the users via the form of NFTs, blockchain-based P2E games give users greater control over their experience and more incentivization to interact with the game.
Play-to-earn gaming has exploded in popularity this year, but as anybody familiar with the cryptocurrency industry is aware, this industry never sleeps. Developers are constantly looking to launch the next best thing and users want to maximize their value and time when interacting with a cryptocurrency project. One common criticism and barrier of entry to P2E gaming is acquisition of in-game assets with the in-game token.
Oftentimes the price of the game’s native token will rise dramatically along with adoption by users, which is great for current players, but can leave new users with a little bit of sticker shock.
We believe that game designers and developers will address the needs of their users in unique ways without compromising the integrity of the economic systems that are being created. Another common criticism of play-to-earn gaming is that the games are not terribly immersive, and beyond the financial benefit of playing them, users would not otherwise enjoy them. That is where GamiFi comes in. GamiFi is a launchpad for metaverse, P2E, and blockchain-based games that leverages strategic partnerships with strong communities with the goal of creating blockchain-based games that are enjoyed by all.
