Many people saw a revolutionary move when the play-to-earn concept was introduced in the gaming industry. The time players spend gaming was to be valued monetarily. Additionally, they now have a chance for direct ownership of in-game assets. Investors, too, were impressed with the idea and a lot of money poured into this sector. However, it is unexpected that this gaming niche is now drastically falling.
This article does not aim at belittling the impact of decentralization and direct ownership of in-game assets. However, it reconsiders the viability of games focused on rewarding players monetarily.
The majority of Play-to-Earn games are struggling or dying. Pegaxy’s VIS (PGX), a play-to-earn horse racing game, has recorded a 99.06% decline, trading at $0.22 from its All-Time High of $2.38 just six months ago. Axie Infinity (AXS) has fallen 88.45% from its All-Time High within seven months. Bombcrypto (BCOIN) has dropped by 99.18%, trading at $0.07196 from an All-Time High of $8.77. The last example in this long list is Unchained’s (GODS), which is currently selling at $0.7244, a 91.78% fall from the All-Time High of $8.83
Why is Play-to-Earn Dead?
- Focus on Earning
The title of this gaming niche itself, “play-to-earn”, denotes the massive shift in motivation that this gaming model brings to the industry. The focus of many community members in a play-to-earn gaming economy is on the Earn rather than the Play aspect.
Like crypto or NFT trading, play-to-earn has been seen as a get-rich-quick money-making scheme. However, the ecosystem is full of spendthrift whales and cryptocurrency millionaires ready to pump a lot of money into the industry. These investors will dump the project as soon as they reach their desired goal, which is profits. With many games available, this group of people can quickly jump from one game to another as soon as one game has become less profitable.
With most of the community still focusing on the Earn aspect, games will hardly be sustainable over the years. A growing and sustainable community play an essential role in the success of games. When games are too monetized and financially driven, it shifts the focus, and people see it more like a business
Scholarships have become one of the cheapest ways for paly-to-earn players to start earning. Often, there is a mismatch between those with time to play and the ones with the resources to buy in-game assets and tokens required to play the game. This is where scholarships and managers come in. Scholarships offer players (scholars) who wish to play the game yet lack resources. Scholars are funded by managers, players with required tokens, and in-game assets yet lack time to play.
While the idea of scholarships seems a win-win situation for the players and investors, it reinforces the EARN mindset among the community members.
Scholars lack any social attachment to the game. Their involvement is mostly business. With such a mindset, scholars have no reason to reinvest their capital into the game. First, they understand that the crypto industry is volatile. Additionally, the game may not be promising to give more returns. Therefore, once they have played the game and earned tokens, they cash out immediately for their weekly or monthly salaries.
Consequently, scholars cause a higher minting rate that leads to an oversupply of tokens on the open market. Additionally, their practice leads to an outflow of money from the game. They often jump from one game to another in search of greener pastures. Their movement from one ecosystem to another is even easier as they do not have any capital lock-up that ties them to any platform. Generally, the scholarship model may seem attractive and mutually beneficial to the participants. However, it speeds up the death of an already vulnerable game economy
Most Play-to-Earn tokens have low liquidity, which translates to higher volatility and susceptibility to manipulation. Coordinated pump and dumb events can quickly stabilize the market as they can cause tokens to fall. When the price of the token significantly falls, it becomes hard to revert to an equilibrium consistent with the prices of the in-game assets and the reward earned. Such a scenario causes a death spiral.
Does NFT Gaming have a Future?
The decentralization that NFT gaming brings to the industry is hard to ignore. The gaming niche has a future, only that it is not in the way it was imagined to be.
The most critical issue to solve is concentrating on the Earn aspects of the game. The industry needs to readjust and create an intrinsic motivation to play the game. Players should play for fun, pass the time, or take challenges. People should be willing to play the game whether there is earning or no earning. A crypto game built around this model ensures that earning is just incidental to a player enjoying the game.
Some NFT games such as Axie and Pegaxy are already shifting the focus toward skill-based game-play. However, such platforms still have the task of disengaging the dominant Earn aspect from the game. Sometimes it helps to think that the games we play have no real-world value and hence cannot spontaneously create a fortune for the player.
What Does the Future Hold for Scholars and Managers?
Managers and scholars seem to be at the center of this development in the play-to-earn gaming ecosystem. Their actions play a significant role in the fall of this niche. However, they are also the most affected by these developments. The fall of Play-to-earn crypto games will wipe out the whole idea of scholars and managers.
However, they can consider some alternatives:
Instead of investing in scholars, managers can invest in alternative projects. You can invest in initial game offering (IGO) through Launchpad platforms.
Some gaming projects already focus on building games that do not focus on the Earn aspect of the play-to-earn. Some of these projects have already sensed the market’s movement against the Earn perspective. However, some of these projects come from a culture of conventional gaming, where the focus is on enjoying the game rather than earning. However, such projects adopt the blockchain, crypto, and NFT innovations to improve the gaming experience. Bala.gg, for example, is transitioning from a gaming guild to an NFT gaming Launchpad, Balaweb3 Studios.
Investing in such projects proves more substantial with longevity.
Scholars should focus on alternative web 3.0 games that do not entirely focus on the earning aspect of play-to-earn. NFT games allow you to enjoy the game, create avatars, and even improve your in-game assets even as you enjoy playing. Taking such an approach will help you enjoy the game and earn incidentally.