Play-to-earn (P2E) blockchain-based games caught the attention of investors in late 2021, with Axie Infinity leading the pack with more than 2 million active users. In P2E games, players gain tokens or non-fungible token assets (NFTs) as they progress through the game. These digital assets can be sold through marketplaces and cryptocurrency exchanges, generating revenue in a decentralized manner.
However, there is a major discrepancy between P2E and traditional PC and console gaming experiences. In that sense, crypto games are a few decades behind due to the restrictions imposed by blockchain technology.
Yes, most crypto games lack a decent user experience
While the promise of AAA-level crypto games will eventually develop, most launches so far have leaned toward digital trading card battles, decentralized finance disguised as role-playing games, and collectibles.
Unsurprisingly, crypto game critics have focused on the lack of fun, or a comparable user experience, to the traditional market, as noted by analyst Udi Wertheimer.
“ayyy what are you doing tonight, let’s play the new crypto game together!”
no one ever said
because crypto games are not fun
and also do not exist
— divers (@udiWertheimer) August 2, 2022
According to Anton Link, the CEO of NFT rental and lease protocol Unitbox Protocol:
Unlike most Web2 titles, fun isn’t the goal of gamers who play to earn. Their main goal is to make a profit and be the first to gain new valuable experience that they can use effectively as a member of a guild or cyber sports team to monetize their time.
In terms of adoption, the traditional game industry beats the movies and TV entertainment by a large margin. A recent report from Newzoo suggested that the video game market will reach $200 billion by 2022, up 5.4% year-on-year. In addition, the report states that the gaming segment entices 3 billion players, far more than the estimated 320 million crypto users worldwide.
Even if Wertheimer’s comments are correct, meaning that demand for crypto games will remain sluggish, capturing just 0.5% of this segment equates to 16 million users. Moreover, nothing prevents one from seeking some form of income in P2E and, separately, enjoying traditional games on consoles, PCs and mobile apps.
Regarding the potentially growing P2E user base, Anton Link, the CEO of Unitbox Protocol said:
I believe that NFT blockchain games and the GameFi sector will be the main drivers of the industry in the coming years – and also become a vehicle for the massive transition of new users into the crypto industry through new NFT-based DeFi products.
There is a significant difference between collectible NFTs and in-game avatars, armor, weapons, land and spaceships. It is likely that the bias against P2E games stems from the 67% drop in NFT trading volume from May 2021 to July 2021, according to data from DappRadar. Additionally, on March 29, Axie Infinity was ravaged by a massive $600 million Ronin bridge hack.
DeFi-focused games can generate revenue for many
There is a lot of justified criticism of the crypto gaming industry, and forcing users to buy items or tokens is at the top of this list of complaints. However, keep in mind that the multiple decentralized financial (DeFi) applications are disguised as games, such as “DeFi Kingdoms”, “Farmers World” and “Sunflower Land”. In these cases, it would be weird to expect a free fee without any initial investment.
Despite the challenges of onboarding users and creating sustainable in-game economies with adequate incentives, Link explained, “It will only be a matter of time before institutions start lending against NFTs.”
He worked out with:
Once the institutional credit infrastructure is in place, we expect the demand for NFTs to increase as well, as institutional money can flow into the country because of the additional utility that comes from securing their NFTs.
Perhaps in the near future, players will no longer need to purchase digital monsters and spaceships before embarking on an adventure in P2E. While there are legitimate criticisms of the crypto gaming industry, a 10x increase in active players to 16 million is not far-fetched. More importantly, this growth and the new models that support it do not require the same user experience provided by traditional games that do not require interaction with blockchains.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risks. You should do your own research when making a decision.
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