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The global video gaming industry was estimated to be worth USD 178 billion in 2021. Gaming is no longer just a hobby for people. Blockchain technology is further changing the paradigm with a new generation of play-to-earn games enabling users to make real money through in-game activities and rewards.
Explosive Growth
Play-to-earn games have become one of the hottest phenomena in the crypto space. The total number of active blockchain games has doubled to 398, according to data from DappRadar. The number of daily unique wallets interacting with game-related smart contracts also skyrocketed 46x from just 28,000 at the end of 2020 to 1.3 million in 2021.
What makes the trend even more interesting is that there are hundreds of crypto games still under development. Amid the rising competition, developers are coming up with unique gaming experiences to keep users engaged.
Kawaii Islands, for instance, has positioned itself as the first-ever “Anime Metaverse.” It’s an anime-inspired NFT simulation game set on a fantasy floating island in the sky. Users get involved in the immersive experience of farming, crafting, styling, home designing, social networking, and of course, earning.
By gamifying DeFi mechanisms, Kawaii Islands created a new kind of mixed entertainment with low barriers to entry. Developers behind Kawaii Islands see a growing demand for simulation-based games in the crypto market.
In a recent episode of Where It Happens podcast, Reddit co-founder Alexis Ohanian said that, in the next five years, most people “will not play a game unless they are being properly valued for that time.” He added that instead of being harvested for ads or being lured to buy in-game items you don’t own, you’ll be playing a blockchain game that will be just as fun, but you’ll actually earn value and be the harvester. No wonder traditional gaming giants like EA Originals and Ubisoft have also jumped into the world of play-to-earn gaming.
What Are Play-To-Earn Games?
In traditional online games, you collect digital items to further your progress or to upgrade your weapons, avatars, etc. You earn them as rewards for completing challenges or by spending real money. But you cannot sell these items to other players for money because the gaming companies merely give you access, not ownership, to these items.
The play-to-earn (P2E) games leverage the immutability of blockchain to create in-game items and rewards as NFTs that are transferable and provably unique. You can export the coins to a crypto wallet and convert to fiat currencies such as the US dollar.
Many see play-to-earn (P2E) games as a way to give players true ownership over in-game assets. Most of the blockchain games including Axie Infinity and Decentralad have native tokens for in-game activities and for trading between players. If the community around a game keeps growing and the value of the native token rises, players benefit from the price appreciation as well.
Can I Make Money With p2e Games?
There’s no guarantee that all players will make money playing P2E games. It depends on multiple factors including the popularity of the game, how well you play, and the demand for the in-game assets or the underlying token.
Last year, the price of Axie Infinity’s AXS token shot up from just 54 cents to USD 94. It means users not only earn rewards in the game, but also speculate on the price of a game’s native token.
Players can rent out, lend, or trade their winnings. They can also deposit the in-game assets as collateral on platforms like Drops to borrow against them. You can use the borrowed coins for whatever purpose you want, including yield farming, speculation, or to take advantage of arbitrage opportunities. You can’t do that with avatars and other items you buy in traditional games.
How to Pick the Right Game for Yourself
You’ll be spending your time, attention, and a little bit of money in the game. So, you need to understand how play-to-earn games work before diving into any one or more of the hundreds of games out there.
Most play-to-earn games require users to buy a starter pack. For example, Axie Infinity requires new players to purchase at least three Axies from its Marketplace to get started. With many other games, you won’t need to buy a starter pack.
You have to evaluate how the rewards are paid out and whether you can easily trade the in-game assets to other cryptocurrencies or fiat money. Most of the P2E games are built on Ethereum, Binance Smart Chain, Polygon, and other popular chains, enabling you to easily convert your in-game assets to another coin. But in many cases, it’s not always easy.
More importantly, the game itself should be appealing to you. For instance, if you are riding the 8-bit nostalgia or if you enjoy live-action titles, you could look into games like CryptoTanks. It’s an improved version of the classic Tanks 8-bit game, using NFT tank models for the game characters, which players will either purchase or rent in order to play.
In CryptoTanks, each Tank NFT has its unique modification of armor, weapons, speed, and other aspects. Varying stats in the game lead to different gameplay styles for each player.
How Do I Manage My Identity and Privacy?
As people spend more and more of their attention in the virtual worlds, they begin to care more about the online pseudonyms than their names on identity documents. However, blockchain games need to act responsibly to ensure that little kids don’t get addicted or get exposed to content they are not supposed to encounter.
In many games, users may be required to verify their age or other details without revealing the personally identifiable information. How do you ensure whether the person behind the screen is eight or 18 years old? Photochromic is a blockchain protocol that allows users to do just that while maintaining full control over their data.
Photochromic aggregates biometric proof of life, government-backed identity verification, social media attestations, and unique personal attributes into a non-transferrable NFT, which lives in the user’s wallet just like any other NFT. It also includes a customizable generative artwork seeded by the user’s face. If you are a popular figure like a sportsperson, you could make the generative art identifiable. Privacy-conscious users could keep it unidentifiable.
The Photochromic NFT could be used for blockchain-based identity verification and Web3 applications. It will prove useful in verifying certain credentials such as age in the P2E gaming world.
Closing Thoughts
The play-to-earn games are disrupting the business model of traditional online games, thanks to blockchain technology. They combine the fun of immersive video games with the opportunity to win rewards for your time and attention. Crypto games can be profitable for users, but most of them require an initial investment and there’s a learning curve involved. Your returns may vary depending on the game and your skills.