How to make play-to-earn sustainable?
Steps of creating a sustainable play-to-earn game model would be:
- Creating a game that is fun to play even though there are no financial incentives.
- Get people to play the game to spend money by creating game content that adds extra fun to the experience of paid players.
- Distribute a portion of the revenue back to players acquired from paid players to incentivize them financially. (This can be an even stronger convergence if financially incentivized players could add more to the experience of paid players, creating a positive feedback loop.)
Reasons for a player to become a paid player can vary. Paid players may have less skill to acquire something in the game and rather prefer to pay for it. Paid players may have less time relative to other players for acquiring in-game items, and they decide to outsource the time they have to spend to the money they are willing to pay for in-game items they want. Paid players may want to spend money to acquire a rare item that they have to be extremely lucky to get organically(Example: one in a ten thousand. Why not just pay to the person who was the lucky one?). Paid players may pay money for gear that doesn’t grant them any objective in-game advantage but improves the outlook of their characters, providing an appreciation for aesthetics or status to their in-game identity.
People who acquire what paid players pay for is called farming content. When you compare paid players to players who play the game for free; paid players farm “content” in the real world in exchange for fiat money and then spend it in the game; on the other hand, people who play the game for free and farm in-game content farms the content directly from the . It makes sense for a paid player to pay for in-game content if their hourly real-world work rate is higher than the content they may be able to farm in the game in an hour.
Active free players are a fun source for paid players. The advantages granted to paid players put them in a unique position where they can crush the players who refuse to pay anything to play the game, making them easy targets for people willing to pay to gain the upper hand.
How can you make a game play-to-earn with competitive elements?: Creating a play-to-earn tournament that is paying for itself
An example: Imagine a counter strike competitive team 5v5 game mode where players stake $1 each, and the winning team gets the prize when they win the game, a total of $10, but each player would be effectively earning $1. Creating real-world cost to the round makes it slightly more competitive relative to regular competitive game modes where there is no money on the line.
There can be a tournament-style mini-prize pool where there could be 16 teams of 5 people making the tournament prize $60 when each person pays $1. At the end of 4 rounds, a winning team would take the “grand prize” of $60. And each person gets $12. In exchange for playing four matches, each is 30 minutes. In this case, the game wouldn’t be about winning $12 each; however, the stakes would be infinitely higher than in previous models because, in regular modes of competitive team games, people earn $0. So the rate of return equates by 12/0 to infinity(mathematically).♾️
Logically, $12 is infinitely higher than $0. Consider playing poker with your friends using real money to make it much more fun than playing it with fake chips.
What doesn’t work with current play-to-earn games?
The expected return from playing games becomes volatile when the game rewards are paid in cryptocurrencies. Even unrealistic declarations suggest that sustainable income earned from play-to-earn games is practically incoherent because the price of cryptocurrencies is unpredictable. A sustainable game economy may not be enough to create vibrant in-game economics; the game economy should also factor in the speculative investors’ impact that is external to in-game economics but can affect the token price by involving financial tools of crypto financial markets. An example could be, shorting an in-game currency on crypto exchanges and directly impacting the in-game economics and the participants of in-game economics without being a part of that particular ecosystem.
Another problem is the deceiving demonstration of what play-to-earn games bring to the table. They are being advertised as when you build a game on Blockchain; it becomes magically revenue-generating, even more so profitable, so they are not only able to pay for the efforts of the building team of the game, they can pay out its players as well. Of course, this is not the game.
It should not be forgotten that Blockchain does not create money out of thin air. It is a better, more transparent, permissionless, programmable version of resource allocation. Gods do not airdrop value to blockchain applications FOMO-induced people do, and people who invested early in that application earn an extension on those who came after them.
This is why everybody who invested in Axie Infinity after November lost money because they were to last fools that lost themselves to the play-to-earn craze.
Here’s a revenue chart of Axie Infinify:
Well, there must be stuff on the rug before you pull it.