Play-to-Earn Games - Are They Worth It?
Updated: Jan 31
Are NFTs and play-to-earn monetization models the future of gaming? Hopefully not.
Games are constantly changing, and with that, finding new ways to monetize. The newest monetization discovery in 2021 was the non-fungible token, or the NFT. The NFT has introduced the “play-to-earn” model, where acquired items become assets that can be sold for cryptocurrency to other users. Games like “The Sandbox” implement NFTs in a way that allows users to acquire ultra-rare cosmetics, some of which are available to only 10 users. However, play-to-earn games beg the question: will NFTs empower gamers with the ability to invest while they play, or is this simply another flash in the pan monetization scheme which will only serve to drain our wallets?
Non-Fungible Tokens
The first question on nearly everyone’s mind is: what exactly is an NFT? It’s nearly impossible to have been online in 2021 without hearing about them, but most people still don’t know exactly what they are. Essentially, NFTs are powered by the Ethereum blockchain. Ethereum is a cryptocurrency, a form of decentralized currency generated by computers. The blockchain is a database containing a series of digital ledgers for cryptocurrency transactions.
NFTs are based on technology that allows information to be stored on the Ethereum blockchain. This is the token, and the “non-fungible” part means that although these can be traded, no two are the same. This enables a new way to sell digital art. While anybody can look at or experience the art, only one person will hold the receipt saying that they own that piece of art. The information used to craft that receipt, though, is often just a hyperlink stored on the blockchain with a link to the file, so if the company hosting the link goes under, your NFT "receipt" will be lost to the void.
The most popular use for NFTs thus far is with randomly generated avatars, which are extremely controversial, and have been the subject of endless discussion on Twitter and similar social media platforms. NFT enthusiasts claim that these randomly generated profile pictures link the users together into a de facto community based on digital ownership. NFT detractors usually state the obvious, in that these profile pictures are usually incredibly ugly and not worth the thousands of dollars that they cost to acquire one. Regardless, countless celebrities like Eminem, Ellen DeGeneres, and Serena Williams have acquired NFTs of their own.
Play-to-Earn Games
Play-to-earn games are a new genre of game that implements NFTs that players can earn by playing the game or buying in-game assets. The idea is that players can support the game, and themselves, by earning NFTs and flipping them on the marketplace later. Typically, cosmetics in games are a one-time purchase, and are tied to an account. Play-to-earn seeks to change this by introducing a marketplace for items that can be traded for real-world currency.
Many games are already implementing this technology, most notably The Sandbox. The Sandbox is an MMO, like World of Warcraft, with the social elements of something like VRChat. It also features creative aspects similar to Minecraft. The Sandbox comes with a robust cosmetic marketplace with contributors like Deadmau5 and The Walking Dead. The items on the marketplace are NFTs, and because of this, they can be limited to a small group of players. The Sandbox is just one of many games implementing this technology, alongside Axie Infinity, Decentraland, and plenty of others.