Play-to-earn games are the catalyst for
this bullish period in the markets
BY Evan Luthra
Short Summary
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.
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.
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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.
