PRYZ Educates — What is Play To Earn Gaming?
NFT-powered play-to-earn games are revolutionising the gaming world, with many gamers now earning a living playing titles like Axie Infinity and Thetan Arena. With Nova Creed looking to take a bit of the action…!
What are play-to-earn games?
Simply put, play-to-earn games are video games where the player can receive rewards with real-world value.
While people have been earning money from playing video games for many years through practices such as “gold farming” and unofficial marketplaces for in-game items, the emergence of blockchain technology and NFTs has, quite literally, changed the game.
NFTs, or non-fungible tokens, are cryptographically unique tokens that can be used to prove ownership of content such as images or music. In blockchain games, they enable users to take ownership of in-game items, such as virtual clothing or plots of land.
Unlike in regular games, where in-game items are held on walled-off data networks and owned by the companies that created the game, NFTs enable players to own the unique assets that they purchase. Moreover, once you own the NFT, you can freely sell it outside of the platform where it was created, something that’s not possible with regular games.
That means that NFTs representing in-game items can be traded and sold for fiat currency on any NFT marketplace. And because those NFTs have scarcity, they have real-world value.
With regular games, there’s no incentive to play other than pure enjoyment. The relationship is one-way: you pay for the game, and unless you’re a professional esports player or a streamer with a big following, you will never be able to monetise your playtime. By contrast, blockchain gaming offers players the opportunity to earn real money.
Because blockchain technology enables users to transact wherever they are, players can transfer value and be paid to play irrespective of who they are, or where they are in the world.
The rise of the play-to-earn model
The biggest play-to-earn game by far is Axie Infinity, a Pokémon-style monster-battling game launched in 2018 by indie studio Sky Mavis. The game sees players collecting cartoon creatures called Axies, represented by NFTs; each Axie has unique strengths and weaknesses, and players can adventure, battle, and breed their Axies as they play. Players earn Smooth Love Potion (SLP) crypto tokens as rewards for battling, while Axie Infinity Shard (AXS) tokens are used to vote on decisions regarding the game and its future development.
With 2.8m daily users and a total trading volume of $3.8 billion, Axie Infinity has become one of the dominant play-to-earn games — and in countries like the Phillipines and Indonesia, people are even playing Axie to support their families. “Axie scholarship” programs like that offered by Yield Guild Games have sprung up, too, enabling Axie owners to loan their NFTs out to other players.
Other play-to-earn projects are merging NFT gaming with elements of decentralised finance (DeFi). Aavegotchi, an experimental startup funded by DeFi money market Aave, enables players to stake Aave’s aTokens inside cartoon creatures represented by NFTs, meaning that each Aavegotchi generates yield on Aave.
The mainstream gaming industry has also been enticed by the prospect of NFTs and play-to-earn; French video game giant Ubisoft has already announced plans for Ubisoft Quartz, a platform that lets players earn and purchase NFTs based on the Tezos blockchain.